This week, Mobile World Congress (MWC) took place in Barcelona. The event theme was “Intelligent Connectivity.” This theme captured well what is happening in the market. At the same time, the event was overshadowed by geopolitical squabbles over network security as well as greater scrutiny of financial viability regarding emerging technology investments — such as 5G, the dominating theme at the event. My subjective takeaways from MWC19 are:

  • 5G, AI, and IoT form a new trinity. Rather than discussing 5G as a standalone technology, as in 2018, the 5G debate has matured in 2019. This year, 5G was discussed in combination with AI and IoT. At MWC19, the AI hype evaporated further than at MWC18 and morphed from a sexy story into an important tool to manage networks more efficiently and autonomously via machine learning. IoT was primarily discussed at MWC19 from a “connected sensor” perspective. All this makes perfect sense given the broader implication of 5G on network management, use cases, and financial considerations.
  • Key building blocks for the 5G, AI, and IoT trinity were presented. Several — supposedly — 5G-capable handsets were announced (e.g., LG V50 ThinQ, Huawei Mate X, and Samsung Galaxy S10 5G), 5G base stations were shown, and intelligent network management solutions (e.g., Telefónica’s Kite IoT platform) were demonstrated. Yes, demos at MWC19 also made clear that 5G handsets and base stations still struggle with smooth performance, power consumption, and battery life challenges, but these issues will be overcome as 5G matures.
  • The 5G, AI, and IoT trinity promises miracles for telcos, consumers, and businesses alike. The potential use cases for 5G that were shown at MWC19 are plentiful. Vendors of all shapes were tirelessly highlighting the potential of 5G as the new panacea for business and societal salvation. MWC19 made clear that 5G gives rise to completely new concepts for connected devices and assets. The combination of software-defined networking (SDN), network-function virtualization (NFV), and 5G trigger shifts beyond traditional technology rollout scenarios.
  • The 5G, AI, and IoT trinity gospel is not — yet — finding many converts. The skepticism among most MWC attendees regarding the financial benefits from the 5G, AI, and IoT trinity was as high as the vendors’ fervor in favor of the 5G, AI, and IoT trinity. The financial return from investments in the 5G, AI, and IoT trinity was viewed with great caution by most business user attendees we spoke to. For consumers, 5G handset pricing — and size — could be a turnoff. Convincing ROI scenarios based on paying customers remain scarce.

As in the case of 3G and 4G, the hype created by vendors concerning 5G is in some way putting the cart before the horse: The old “build it and they will come” approach is unlikely to work with 5G. Too many supposed 5G use cases can either be realized with a combination of existing connectivity solutions or are financial wishful thinking — in other words, often not economically viable today.

Ironically, the 5G skepticism by potential 5G users is likely to help 5G in the medium-to-longer term: The lower the expectations regarding 5G, the easier it will be to exceed them. I expect the 5G rollout scenario to follow approximately the depreciation cycle of 4G and other “legacy” standards. In other words, 5G will be gradually introduced into the network infrastructure as 4G capex is gradually replaced with 5G capex.

Then, 5G will unfold its potential to enhance employee and customer engagement through super-fast mobile broadband; support IoT solutions with massive machine-type communications; and open new business opportunities with ultra-reliable and low-latency communications. Hence, MWC was an important milestone to prepare the path for 5G — despite the hype that it created around 5G.