The mobile market has an activity peak every spring, when 3GSM and CTIA, the two largest tradeshows, take place. 3GSM has abandoned its former home in Cannes for Barcelona (good upgrade) and CTIA took place in Las Vegas – crazy and crowded as ever. The shows attracted a combined 100,000 people, a clear sign of a growing and healthy industry. Another sign of wellbeing was the marketing spend by the big players; Motorola covered Barcelona with their new image and Samsung and LG had a serious spending duel in Vegas. Below are some of our main observations for this year.
Convergence and 3G are coming strong!
Convergence might have been the single most used word at both 3GSM and CTIA, but the theme includes several trends. FMC (Fixed–Mobile Convergence) is the creation of a single telecom foundation. This disruptive movement is creating significant business opportunities. Another FMC activity is the emergence of mobile handsets that can be used on multiple networks (e.g. GSM and WiFi/fixedline).
FMC is a global phenomenon but more visible at CTIA. At 3GSM, convergence was more about 3G and IMS. Over one hundred 3G networks have been deployed globally, with about 50 million subscribers signed up. Half of the users are in Japan, and about 10 million in Italy – the second largest 3G market today! With 3G becoming reality, both 3GSM and CTIA exhibitors were more focused on enhancements to the infrastructure, which will allow always-on and personalized services.
Hot subjects discussed by vendors and in conference sessions include IMS, which will allow for a converged, Internet-like experience on the mobile phone. The new accelerator for this, HSDPA, was a popular topic specifically at the 3GSM show.
It’s all about applications and services
Applications and services were prominent at both shows, as this is where much of the future business will be. This year's theme was "everything video". Mobile TV demos were displayed en masse. Most agree that mobile TV will be huge, even if standards and business models are far from established. Many operators are already trialing services on their networks. Communities, blogs and different interest sharing activities were everywhere at the shows (many of them using video), following the Internet success of user-generated content.
Both events showed the next generation of professional content that will grow the already successful markets for ring tones, wallpaper and sports. Adult content was also present as a large, established category. Early deployments of mobile search are showing encouraging results but no clear winner has emerged yet.
3GSM vs. CTIA
One hot trend at CTIA was Mobile Virtual Network Operators, where established brands launch mobile services with proprietary content on an incumbent operator's infrastructure. This trend was almost not visible at 3GSM due to the fact that the European MVNOs are focused on low-cost voice, and they do not have a high profile in Europe. Notable was also that Microsoft had a very strong presence at CTIA, but was barely present at 3GSM this year.
A healthy industry
In general, both events were very active and upbeat, and left people feeling that they are part of a strongly growing, but also maturing industry. The amount of start-up companies present at both events was very positive after a few slower years. Our conclusion is that the global leadership in the telecom universe will be exercised in North America, Europe and Asia – each with its particular twists – for a long time to come, and providing an excellent investment environment.
Artturi Tarjanne
General Partner
Nexit Ventures
artturi.tarjanne@nexitventures.com
Michel Wendell
General Partner General Partner
Nexit Ventures Nexit Ventures
michel.wendell@nexitventures.com
