BARCELONA — Mobile World Congress (MWC) — The world’s largest mobile technology show is chock-full of gadgets, mobile operators, and buzzwords: Network Functions Virtualization (NFV), Software-Defined Networking (SDN), small cells, and IoT (Internet of Things).
I must confess, most of what I’ve been thinking about this week is how much data is on the mobile network. My attempt to pick the right global data plan before I left home did not work — within three hours of landing in Barcelona I was receiving stress-inducing texts from Verizon informing me that I’d incurred a $150 surcharge for downloading my email (even though I thought I had made the right switch before I left).
This set up on ongoing obsession. Use Google Maps? More data. Twitter? Email? Tons of data. The data roaming was turned off (while I could still talk on voice for $1 a minute), something I never think about at home. It’s a practical reminder of the voracious bit-chomping of today’s networks: Mobile data use has skyrocketed. Mobile apps and the convenience of having all possible information in the palm of your hand has been a source of shifting technological and economic powers.
This power struggle remains central to the dynamic among service providers, handset manufacturers, and Internet content providers. Global operators enable it all by building the pipes — but grouse that Apple and Facebook founder and CEO Mark Zuckerberg get all the glory.
Apple now has a $700 billion market cap, Facebook is $220B, and Verizon is a mere $205B. The value has accrued to the content and software providers. The global operators aren’t exactly poor — Verizon will earn close to $4 a share in profit this year. But this power struggle is still fresh. It was at the heart of the debate about the FCC’s recent Title II decision.
This was a topic of discussion among professionals at the party I attended Monday night, after Zuckerberg’s keynote speech. Zuckerberg was criticized after last year’s MWC speech when he was seen as ungrateful for the massive infrastructure provided by the global service providers, which enabled his social-networking money machine. One of Facebook’s initiatives, Internet.org, teams global operators with Facebook to build out affordable mobile services across the world. The big question that operators have a year after Facebook announced the project is: What’s in it for them? This was a big topic of discussion in the keynote panel.
This year, Zuck struck a conciliatory note, going out of his way to thank the service providers, which have provided the core infrastructure for your Facebook posts. Although several global operators said the project has provided more benefits than costs, there is still plenty of complaining.
Telenor CEO Jon Fredrik Baksaas said his company is still considering whether to join Internet.org. “There is a financial balance,” he said. And there’s still another core issue of contention with many service providers: Facebook’s $22 billion purchase of WhatsApp, which provides over-the-top voice and messaging services around the world — mostly for free. Operators discussing Monday’s keynote still had issues with that, as well.
This is what business among the big boys is about: share of the revenue and the consumer wallet. As the mobile world has generated huge amounts of growth, profits, and value, much of it has flowed to the content providers, social networks, and Apple — while operators continue to be burdened by the cost of data transport. For example, Apple takes 89% of handset profits worldwide.
Can we find a way to better balance this industry? I hope so. At times, the wacky economics of the mobile industry seem unfair. And the consumer hasn’t exactly fared well in the big-data party, either. Mobile bills continue to skyrocket.
The data beat me this week. I had to keep my mobile phone turned off, to avoid my mobile costs exceeding my plane fare.