Walking down the main avenue here at Mobile World Congress I watched some gulls having an arial battle, oblivious to the crowds below who all work for companies fighting it out in the turbulent mobile industry. The pace of change in mobile was a theme running throughout the keynote/panel with John Chambers, CEO of Cisco, René Obermann, CEO of Deutsche Telecom, and Ben Verwaayan, CEO of Alcatel-Lucent. The topic was ostensibly mobile cloud, but the discussion touched on subjects that affect all of the mobile industry, primarily from carrier and network infrastructure standpoints.
Oberman on how telecoms need to get away from the ghosts of their monopolistic, slow-moving pasts: “We have a hard time as an industry to cannibalize ourselves. We need to think differently in the future.”
Verwaayen on the changing role of telecom service providers: “Telecoms will no longer be verticals, but will be a horizontal in other people’s businesses.”
Chambers on the improvements in performance and service that companies must provide: “Average is over. And being above average will only be good enough for the next 3-5 years.”
Lots of statistics flew around as well: 26x increase in mobile traffic from 2010 to 2015; 50 billion connected devices by 2020 (machine-to-machine or Internet of Things); in 2011, mobile traffic exceeded internet traffic by 8x.
But Verwaayen was refreshingly frank: “We’re doing very well as an industry. But there’s one number we’ve always struggled with, and continue to do so: One.” That is, the individual consumer. The industry still doesn’t understand how to provide real service, and has an outmoded, authoritarian view of the customer.
“Customers don’t use the same terminology we do in this room to describe their needs from mobile services.” Like the gulls I saw with their own separate existences above the throngs of attendees, customers sometimes seem to live in a parallel universe compared to the jargon and extreme complexity of the mobile industry. (Saturday Night Live recently spoofed this with a satirical Verizon 4G/LTE commercial.)
Obermann joked that in telco, “Customer friendliness has meant that the customer must be friendly!” He argued that telcos must truly start thinking of themselves first and foremost as service companies, rather than as infrastructure and technology companies. This is the way out of the dumb-pipe problem where their services are commoditized, and they lose money on the enormous capital expenditures of deploying new networks while over-the-top players reap the rewards.
Verwaayen also highlighted the changing nature of the consumer. No longer are they head of household, but they are 14 years old, and female. (This to a room that was, approximately, 98% male, like most of the 60,000+ people at the show, though there seem to be more women here than last year.
Staying innovative was of course a major topic. “Talent has no passport,” said Verwaayen, going on to talk about how innovation can come from anywhere, and that emerging markets are at least as likely to be sources of innovation as the West. He talked about how Alcatel-Lucent is for the first time collaborating with its customers – carriers – on new product development, rather than only showing it after the product has been designed. This has been an uncomfortable process but a valuable one, especially as roles of who does what in the mobile ecosystem continue to blur.
Obermann recently took on oversight of Deutsche Telecom’s innovation efforts, because “the CEO has to lead or it won’t happen.” Chambers concurred: “As CEOs we are trying to lead our organizations to change, and we have to lead by example.”