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The Missing Connectivity at MWC LA 2019


Humanity thrives on communication and connection, so the promise of better, faster, and farther-reaching connectivity will undoubtedly grab the spotlight when it comes to mobility. With over 90% of US and European consumers having smartphones, and almost two-thirds of internet usage time taking place on those mobile devices, it’s an industry that will continue to grow.

5G Everywhere

Two simple characters stood out from every angle as we entered the doors of the convention - ‘5G.’ Nearly every booth in sight displayed enlarged 5G messaging; companies even showed off three-dimensional statues in the honor of the next-generation technology.

It is no surprise that 5G, with all the hype around its ultrafast speeds and minimized delays, was not only a buzzword, but a flagship banner for some of the biggest telco and OEM brands in attendance at this year’s LA-based Mobile World Congress. Connectivity service providers pioneering in IoT and satellite technology also grabbed up booths surrounding the big telcos and OEMs. Enhanced connectivity through technology unanimously won out as the central theme at the conference.

But with all the monotonous hype each year around better network coverage, connection speeds, and incremental device features, it’s getting easier to ask, “Is this all the consumer will ever get?”

When consumers buy the newest device or sign on with the top provider, they get a temporary and quickly-aging access to today’s best connectivity. But that soon leaves them behind, forcing them to spend more on adopting the next big thing in just a few years.

The mobile network operator juggernauts at the convention especially leaned into capabilities around “intelligent” connectivity as key differentiators. Only 20% of their top-line revenues come from non-connectivity services, so it makes sense that their focus remains in increasing connectivity offerings and capturing new subscribers with special plans and bundles.

The Missing Link?

Unfortunately, both pricing competition amongst the carriers and trends toward slower device upgrade cycles for the OEMs (as a result of smartphone design stagnation and reduced carrier subsidy opportunities) are taking a big dent in the status quo. Something has to change in the mobile device industries – connectivity can’t carry the carriers forever.

With all the focus at the MWC convention on connectivity, it’s surprising that one of the most elemental aspects of “connectivity” was completely missing from everyone’s sales collateral and marketing messaging – the connectivity of the company to the customer. Customer acquisition was took centre-stage with better connectivity features, as most of the companies in attendance still ignoring the after-sales service and support ecosystem. This is part of the biggest missed opportunity for service providers and device manufacturers – value-added services. According to GSMA’s research, it’s a top phrase in operator CEO rhetoric today concerning future growth opportunities, but it clearly has not materialized.

“Operators have long sought a revenue stream beyond connectivity to offset subscriber saturation and competitive pricing pressures,” GSMA’s Mobility Trends Report assents.

But a switch from the safer (for now) and heavily-invested legacy business to profitable value-added services has proven to be difficult. After-sales services, such second-hand device re-commerce or damage protection warranty plan offerings, are massively under-leveraged by the biggest OEMs and telcos. The apprehension is that they take significant infrastructure and support networks to succeed, and unfortunately the service providers are fragmented with varying levels of quality at each stage. Even more risk enters the equation with the inability to control fraud or inaccuracies in device valuation.

Winning in a 5G World

This fog of war around one of the most basic aspects of the mobility business (or any consumer business, for that matter) represents the biggest opportunity for mobile device players looking to increase their revenues from non-connectivity services and play the long game. The key is connectivity – but not over spectrum or radio frequencies. It’s connectivity between the business and the consumer.

As these manufacturers and service providers are starting to realize, new players are developing ways for them to offer valuable services to their consumers without impacting their current investments in IT. Providers like Servify are leading the charge in this space and are making it possible for the big providers to stitch together new offerings and build more connectivity (and brand loyalty) for their consumers.

5G and faster connectivity might be an opportunity to gain, but it’s also one to lose if it becomes their only focus. Operators and device manufacturers should ensure their future operations don’t rely on this kind of connectivity forever, because the technology and connectivity saturation is almost at the point where it won’t be a differentiator anymore.

There’s not much land left to grab in the connectivity space. It’s time for the focus to shift to the connectivity between the company and the consumer -- because that’s where the real value will be.

- Kyle Strickland 

Global Growth & Strategic Initiatives, Founder's Office

Research and statistics:

GSMA Global Mobile Trends 2020 Report