MWC 2023 Day 1 – Back in business

Floor report – China returns

• Mobile World Congress 2023 is finally pretty much back where we left it in 2019 and, although footfall and exhibitors are still clearly lower than before the pandemic, I think that this is more due to the state of the industry and the economy than MWC itself.
• The awful traffic, queues for the loos and hunting for chairs are all back in force but the most obvious change is that the Chinese have returned.
• Huawei was always going to be present as I think that it has a multiyear contract for its huge stand in Hall 1, but it has filled its stand with its wares and also manned it heavily with staff from China.
• Compare and contrast this with Intel whose stand has been stripped to the bone is a sign of the very difficult situation the company finds itself in at the moment.
• China Mobile, ZTE, Honor, as well as numerous router, access point, switch, robot, smart product and fibre optic equipment makers are all back this year and have sent people from China rather than anyone that they could scrape together from overseas.
• This is good news because China is a crucial part of the technology industry both from a manufacturing and a consumption standpoint.
• Finally, business can get back to normal, but the macroeconomy and higher interest rates are likely to mean that times remain difficult as the wild times of the pandemic now have to be paid for.
• MWC remains at a difficult point in the product cycle with 5G being standardized enough to be boring and 6G so far away that no one has anything to say about it.
• This is why OpenRAN is taking centre stage this year of which there is more below.

OpenRAN – History repeating?

• With 5G being too mature to be interesting and 6G too far away to know anything about, OpenRAN is filling the space in terms of subjects under discussion.
• OpenRAN is the idea that instead of buying all of one’s basetstation from one place, open and defined interfaces mean that one can pick and choose suppliers and build a base station like a jigsaw.
• This is threatening to the traditional business model where operators are locked into one manufacturer for each basetstation and where the real money for vendors is made on the basestation upgrades post installation.
• The problem with OpenRAN to date is that is beset with issues that mean that it struggles to compete with the traditional vendors which its proponents are all trying to fix.
• OpenRAN is not a new idea as Nokia and Co. proposed a standard like this in 2002 called OBSAI (Open Base Station Architecture Initiative) while Ericsson championed something similar called CPRI (Common Public Radio Interface).
• OpenRAN is essentially a rehash of these ideas but with more depth to it given how complicated networks have become as well as how important software now is in the network.
• The GSMA hosted a debate covering OpenRAN but unfortunately, it was not brave enough to invite any real sceptics to argue the challenges side of the argument.
• Instead, proponents of the technology discussed both sides and consequently, they did a pretty poor job of highlighting the challenges.
• Not surprisingly, the challenges of OpenRAN are not dissimilar to those faced by OBSAI and CPRI although the will to overcome them certainly appears to be greater this time around.
• The biggest issue is that creating a jigsaw of components will mean that the system is not well-optimised resulting in lower performance.
• While operators can pick and choose what components they want, the performance that they get per $ or Euro that they spend is meaningfully below that of the fully integrated systems of Nokia and Ericsson.
• Another issue is that operators like to have a single point of contact when something goes wrong as opposed to different vendors all blaming each other and not fixing the issue.
• Other issues include security which is more difficult to achieve with more bakers all contributing part of the cake as well as the system integration that will be required to get it all working together.
• The idea that this will just be plug-and-play is laughable given how complex these networks are and how idiosyncratic many of the mobile networks out there really are.
• The bottom line is that OpenRAN needs the operators to mandate it in order to really take off, and while many of them pay lip service to it, I do not detect much in the way of real commitment outside of green field entrants like Rakuten Mobile.
• Instead, most of them seem to use it to extract concessions out of the existing vendors which is pretty much what they did with OBSAI and CRPI.
• Consequently, until the operators really get behind it, history is likely to repeat itself once again.