Mobile World Congress (MWC) came back to Barcelona on February 28, 2022 with more than 60,000 live attendees. This report provides a summary of the most impactful announcements made at MWC and how they will shape the industry in 2022.


Omdia view

Summary

Mobile World Congress (MWC) came back to Barcelona on February 28, 2022 and successfully attracted more than 60,000 live attendees. While the event was significantly smaller than in its prepandemic glory, it was as impactful if not more so. The attendance was of very high quality, with CEOs from around the world from companies such as Amazon AWS, Axiata, BT, Millicom, Nokia, Qualcomm, Rakuten, Safaricom, Sotheby’s, Turkcell, Telecom Argentina, Telefónica, Telia, Telenor, Telstra, and Vodafone taking part in person. Operators took to the stage and the exhibition floor to showcase their latest innovations, specifically looking at 5G use cases, sustainability efforts, and open RAN. This report provides a summary of the most impactful announcements made at MWC and how they will shape the industry in 2022.

European operators continue push for open RAN

William Hare, Practice Leader, Europe Service Provider Markets

Open RAN was a major theme at this year’s MWC, with a number of announcements from the major European service provider groups. Telefónica has been one of the leading voices pushing for open RAN adoption and reaffirmed its commitment to the concept. Initial deployments are underway, and it expects to commence large-scale rollout from 2023, with up to 50% of new RANs using open RAN standards by 2025. Vodafone has also been at the forefront of open RAN development and announced at MWC that 30% of its network will use the technology by 2030. Meanwhile, Orange highlighted its commitment to purchasing only hardware that will support open RAN from 2025 onward and its intent to shut down all its 2G and 3G networks in Europe by 2030. Deutsche Telekom’s “O-RAN town” pilot in Neubrandenburg has demonstrated the concept, in partnership with Mavenir, Nokia, and others.

There are clear benefits for European service providers in establishing an open RAN ecosystem. Several Western countries have banned the use of Huawei’s 5G equipment, citing security concerns, which has further restricted the already limited choice of vendors for traditional single-vendor networks. Open RAN allows a much broader range of suppliers to enter the market, spurring competition and innovation, reducing costs, and facilitating new features and services such as network slicing. But the technology also brings challenges, particularly around interoperability with existing infrastructure, security, and operation and maintenance.

Service providers showcase 5G gadgets

William Hare, Practice Leader, Europe Service Provider Markets

As is traditional, the major service providers were contending to present the most innovative 5G use cases at MWC 2022. Telefónica’s 5G bartender was perhaps the most eye catching, using edge computing to power various features such as facial recognition (to allow personalized customer service), multiple-language voice control, and sophisticated monitoring of usage, crowd control, and so on. Orange showcased a virtual reality (VR) reconstruction of Notre-Dame de Paris, designed to demonstrate the potential of VR for educational purposes. The demo moved the data processing into the cloud, allowing a smoother user experience and reduced device cost but dependent on the low-latency connectivity provided by 5G. Meanwhile, Deutsche Telekom demonstrated a proof of concept for automated valet parking in partnership with BMW and Valeo.

Almost all European countries have launched 5G services over the last two years, but the existing nonstandalone deployments provide little that is new for consumers and certainly nothing that might be deemed a “killer app.” It is in the core network where the real 5G innovation lies, and the new products and services demonstrated at MWC will depend on standalone 5G networks to deliver in the real world. For ordinary smartphone users, which provide the bulk of service providers’ revenue, it will be business as usual, with 5G take-up driven more by the device replacement cycle than by any real demand for the new technology. Nevertheless, Omdia forecasts strong growth of 5G subscriptions in Europe to reach 591 million by the end of 2026.

China announced 1.4 million 5G base stations, targeting 2million by end-2022

Ramona Zhao, Research Manager, Asia Pacific Service Provider Markets

At MWC 2022, China Mobile said it has built more than 700,000 5G base stations, with 500,000 base stations on 2.6GHz and 200,000 base stations on 700MHz, together accounting for about 30% of the world’s 5G base stations. China Mobile’s 5G network has a population coverage of 1 billion people, 71% of China’s population. China Mobile expects to end 2022 with 1 million 5G base stations. China Telecom also disclosed at MWC that the number of its co-built, co-shared 5G base stations with China Unicom has reached 700,000, making the two operators’ 5G network the largest 5G co-shared 5G network in the world. Meanwhile, on the same day as MWC Day 1 (February 28), the Chinese government announced a goal to deploy more than  600,000 5G base stations this year, which will increase the total number of 5G base stations in China to 2 million by end-2022.

China is currently leading the world with the largest number of 5G base stations deployed. Omdia thinks there are several success factors that have contributed to China’s fast 5G deployment. One is timely allocation of the valuable mid-band 5G spectrum. Specifically, instead of conducting an auction, the Chinese government awarded the 5G spectrum to service providers at no cost, which spared service providers a potential financial burden. Another factor is co-sharing 5G infrastructure. Given that China has now established a 2V2 competitive landscape in terms of 5G deployment, network co-sharing has helped service providers in China enjoy a wider 5G infrastructure resource at a lower cost. Besides this, a recent trend we have seen from China is more lower 5G spectrum available: in 2021, China Mobile and CBN started 5G deployment on 700MHz, while China Telecom and China Unicom also started 5G deployment leveraging 2.1GHz, lower in comparison with their 3.5GHz 5G deployments in 2019 and 2020. Omdia believes more lower-spectrum band deployment will further help improve 5G coverage, particularly in remote areas.

SK Telecom plans to launch Ifland metaverse service in 80 countries in 2022

Matthew Reed, Chief Analyst, Service Provider Markets

SK Telecom (SKT) plans to launch its metaverse service Ifland in 80 countries by the end of 2022, CEO Ryu Young-Sang told a press conference at MWC. SKT also unveiled the global and head-mounted display versions of Ifland at MWC, allowing visitors to the company’s exhibition stand to tour digital art galleries and attend a K-pop concert in the metaverse. In South Korea, where SKT launched Ifland in July 2021, the service had 1.13 million active users in January, who spent an average of 61 minutes on the service, the company said when it reported its end-2021 results shortly before MWC.

The metaverse is a new field in which SKT already has a good claim to be a major player. Given the user numbers for Ifland in South Korea, SKT’s plan for a major international expansion of its metaverse offering will strengthen the company’s prominence in this nascent market. But other service providers don’t necessarily need to rush to launch their own metaverse services. Instead, SKT’s plans could represent a partnership opportunity: SKT might be looking for local operators that it can work with to launch Ifland in new markets. More broadly, SKT’s position as a leader in a range of advanced digital service areas, as well as in the deployment of 5G and use of artificial intelligence (AI), make the company a reference point for other service providers around the world looking to transform and diversify their businesses.

Telefónica announces the expansion of its partnership with Microsoft

Sonia Agnese, Senior Principal Analyst, Americas Service Provider Markets

Telefónica announced the expansion of its global strategic relationship with Microsoft to focus on accelerating the creation of joint initiatives in the consumer market in areas such as gaming (Xbox consoles and passes), connectivity, communications, secure access to data, and new Living Apps (integration with Aura) among others. Previously, the partnership was mainly focused on confidential computing initiatives for the business and public sector segment, digital transformation, and connectivity. Telefónica is also looking to extend the offer of Microsoft 365 to other markets where it has a presence, following last year’s agreement between Microsoft and Vivo in Brazil to offer a monthly subscription for Microsoft 365.

Telefónica is demonstrating that it is open for different types of partnerships, the one with Microsoft being a key one. AT&T outsourcing its core network division to Microsoft in mid-2021 has set the scene for new announcements by hyperscalers and telcos. Telefónica, like the rest of the telcos, is working on a private network strategy, and with the AWS Private 5G announcement calling attention to the opportunity of private networks, all competitors will accelerate their plans and strategies. It’s clearer than ever that for traditional telcos, cloud providers are the suitors they dare not ignore and, equally, the competitors they should fear. “Co-opetition” is the name of the game.

Etisalat UAE and Huawei are partnering to launch the first 5G edge box in the Middle East

Srushti Ghisad, Research Manager, Middle East & Africa Service Provider Markets

Etisalat UAE and Huawei Technologies announced they will be extending their partnership to deliver the region’s first 5G edge box. Etisalat UAE’s chief technology and information officer has said the success of the cloud-centric 5G edge computing platform testing is the first step toward enabling Etisalat and Huawei to support the UAE in its digital transformation journey.

This strategic move is geared toward meeting changing customer demands in a digital-first economy and creating sustainable growth in the B2B market. According to Omdia, the enterprise market is set to see a growth rate of 18.2% in service revenue between 2022 and 2026 in the Middle East and Africa. Once the new product has launched successfully in the UAE, Huawei and Etisalat Group (now e&) will be able to leverage this technology to deliver high revenue growth on the B2B side across e& operations through the newly announced e& enterprise division of the group.

Millicom financial services arm reached $50m in revenue in Latin America

Ari Lopes, Sr Research Manager, Americas Service Provider Markets

Millicom CEO Mauricio Ramos announced during his speech at MWC that Tigo Money, the company’s digital wallet, reached $50m in revenue in 2021. The service saw transactions of up to $4bn over the same period and has 5 million active users. Mauricio Ramos highlighted the significance of these results by stating that, on average, 50% of the population in the area Millicom operates in do not have access to traditional banking services; however, 90% have access to mobile services, mainly prepaid. Millicom operates under the Tigo brand in the following countries: Guatemala, Honduras, Panama, El Salvador, Colombia, Bolivia, and Paraguay.

Tigo Money is a rare case of a successful service-provider-led mobile money initiative in Latin America. Several other operators, including regional leaders América Móvil and Telefónica, have tried to develop solutions but were not successful in the first attempt focused on mobile payments. They are now going for a second try focused on lending solutions. Tigo Money results show that Millicom has been operating a solid financial services vertical in line with its strategy to diversify business.

Ooredoo showcases its new esports digital venture

Srushti Ghisad, Research Manager, Middle East and Africa Service Provider Markets

The gaming industry is growing at a rapid rate, and Omdia predicts that digital gaming presents the second-biggest opportunity for telcos globally in the next three years with a value of $19bn.

Ooredoo used its platform at MWC 2022 to set out its plans and initiatives for its newly launched esports product, Ooredoo Nation – Gamer’s Land, which first came out in July 2021. Ooredoo partnered with Quest to create an esports tournament in the region that welcomed thousands of participants. Ooredoo Qatar highlighted that the aim of this venture was to broaden Ooredoo’s offerings through the provision of new digital experiences to customers and establish areas of growth in the e-gaming industry.

Ooredoo has been successful so far: its PUBG Mobile and Fortnite tournaments surpassed expected numbers and were classed as the most-watched event in January 2022. Ooredoo set out its plans to continue investing in new products and services in the industry and will build on its current partnership with Dell to expand on these offerings. Omdia believes that the potential for growth in the e-gaming segment in the Gulf Cooperation Council (GCC) countries is above the global average, supported by the fast-paced transformation of telcos to techcos coupled with support from the local governments.

Rakuten Symphony agreed to acquire cloud technology company Robin.io

Maosen Xia, Research Analyst, Asia Pacific Service Provider Markets

Rakuten Symphony announced an agreement to acquire Robin.io, a cloud technology startup company based in Silicon Valley. Rakuten invested in Robin.io in June 2021 with a total $38m Series C round of funding led by Rakuten Capital and now acquires the company for its own digital portfolio. Rakuten already has a strong relationship in its services with Robin.io. Rakuten Mobile adopted and deployed the network-oriented Kubernetes platform from Robin.io for its open-RAN-based, fully virtualized 5G network to support the functions such as running radio access network, core network, edge services, and other cloud-native applications. Once the acquisition deal completes, Robin.io will become a part of Rakuten Symphony’s end-to-end cloud-native network portfolio and deliver higher-value service internally and externally.

The acquisition is an important phase of the ecosystem for Rakuten Symphony and its parent Rakuten Group in delivering the convergence of IT and telecom networks and offering a modern, industrial-scale automation platform for telecoms. The cloud capability and synergies of cloud technology innovations from Robin.io will allow Rakuten Symphony to accelerate cloud-native transformation for its customers and provide competitive infrastructure solutions and global scale of services. Following the trend of digitalization, cloudification, and the path of 5G network deployment, the deal will facilitate Rakuten to serve the increasing demand in providing key technology elements to other network operators when helping customers in digital transformation, and also utilizing Rakuten Symphony’s network automation and orchestration solutions when deploying its next-generation open-RAN-based 5G network.

Safaricom Ethiopia chooses VMware as its official telco cloud partner

Danson Njue, Senior Analyst, Middle East and Africa Service Provider Markets

VMware announced at MWC 2022 that it will be providing Safaricom Ethiopia with a suite of cloud services for all its applications as the telco’s chosen cloud partner. Safaricom Telecommunications Ethiopia PLC has launched its commercial activities in 2022 with a focus mainly on 4G and other digital services including financial technology, digital content and Internet of Things (IoT). The partnership with VMware is part of Safaricom’s wider strategy to contribute to Ethiopia’s digital transformation.

Safaricom Ethiopia outlined the importance of network building in unlocking Ethiopia’s economic potential. VMware services will provide a platform for the deployment of cloud-native network functions at scale that Safaricom can leverage across its telco network and IT environments.

This new partnership between Safaricom and VMware could accelerate the growth in LTE’s share of total mobile subscriptions. Safaricom has also announced that it is in negotiations with Ethio telecom on infrastructure-sharing agreements that could also contribute positively to wider broadband penetration. According to Omdia, LTE subscriptions are set to grow by almost five times between 2022 and 2026 because of network investments in 4G by the two mobile operators in the country.


Appendix

Further reading

MWC 2022: What To Expect (February 2022)

5G Service Provider Tracker – 4Q21 (January 2022)

2022 Trends to Watch: Superthemes in Service Provider Markets (September 2021)

Author

Ronan de Renesse, Research Director, Service Provider Markets

Matthew Reed, Chief Analyst, Service Provider Markets

William Hare, Practice Leader, Europe Service Provider Markets

Ari Lopes, Sr Research Manager, Americas Service Provider Markets

Srushti Ghisad, Research Manager, Middle East & Africa Service Provider Markets

Ramona Zhao, Research Manager, Asia Pacific Service Provider Markets

Sonia Agnese, Senior Principal Analyst, Americas Service Provider Markets

Danson Njue, Senior Analyst, Middle East and Africa Service Provider Markets

Maosen Xia, Research Analyst, Asia Pacific Service Provider Markets

askananalyst@omdia.com