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2014-03-04 06:45:08
Feb 27th 2014, 10:05 by P.L. | BARCELONA
THE best advice for a first-time visitor to Mobile World Congress (MWC) is: wear comfy shoes. It takes an age to walk from one end of the event to the other. There is plenty to detain you in the eight halls, packed with the stands of mobile operators, device-makers, network-equipment vendors and others, some of them the size of small villages. In the several auditoriums, earnest public discussions take place. Elsewhere, many private talks are under way. Deals are struck, disagreements aired.
MWC is the mobile industry s annual jamboree in Barcelona, organised by the GSMA, the network operators trade association. Held this year from February 24th to 27th, it has sprawled far beyond its enormous main site. Samsung, for example, presented its newest flagship smartphone, the Galaxy S5, its new smart watch and a wristband in a conference centre on the other side of town. An auxiliary show for startups took place about 3km away. Your correspondent has often wished he could have been in two places at the same time. (Once, to his embarrassment, he had agreed to be.)
For years, the latest smartphones have captured people s attention. This time seemed different. Demand at the top end of the market is decelerating. That has brought a shift in focus to three other areas. The first is cheaper smartphones, for which demand has taken off. Mozilla, a foundation best known for its Firefox browser, presented a device using its own mobile operating system, Firefox OS, that may cost as little as $25. The second is the narrowing gap in quality between the leading brands and phones made by a vast array of Chinese companies. Some, such as Huawei, are well known outside China; others, such as Gionee or Oppo, are not. That may cause further discomfort for Samsung, which has dominated the market for phones using Google s Android, by far the most widely used operating system. Its earnings fell in the most recent quarter.
The third shift is away from the phone, to wearable devices and other gadgets connected to it, such as that Samsung watch and wristband, and wristbands from both Sony and Huawei that were also on show. Around these there was an air of suppressed excitement rather than outright enthusiasm because bands, like Samsung s Gear Fit, that measure your heart rate, steps taken, calories burned off and so forth, are just the beginning of no one knows what. Simon Segars, the chief executive of ARM, a British company whose technology underlies the chips in almost every smartphone, thinks that the phone is becoming a hub from which other connected gadgets will be controlled. Around the show were plenty of examples of what is coming, from connected cars to smart homes. The potential of the wider internet of things , with uses in industry, utilities and smart cities as well as homes, is greater still.
But devices are only a part of the whole. Operators and network-equipment vendors spent much of their time at MWC looking ahead to how networks will cope with ever-rising demand for data flowing to and from myriad devices. Enhancements to even the fastest LTE, or fourth-generation (4G) networks are already on the way for example in the form of carrier aggregation , which combines separated, narrow parts of spectrum to create greater bandwidth. And vendors and operators have started to look ahead to the next round, 5G, due in around 2020. No one can yet define it, but the work on setting standards has to start now. Neelie Kroes, the European Commissioner, enthused at MWC about what superfast networks might do not just for Europe s telecoms industry but also for its whole economy. Having been ahead of the game in 3G, Europe fell behind America and much of Asia in rolling out 4G. Ms Kroes sees opportunity ahead.
Europe s operators may wonder where they will find the wherewithal. Their troubles were summed up by the presence in Barcelona of a prominent guest: Mark Zuckerberg, of Facebook, who spoke to a packed hall on February 24th. Fortuitously Jan Koum, of WhatsApp, the messaging service for which Facebook is paying $19 billion was also at MWC. Messaging apps have gutted operators of the revenue they once enjoyed from SMS messaging: rather than pay for an SMS, users spend a bit of their data allowances instead. WhatsApp, with over 450m members and ambitions for 1 billion, is the biggest and fastest growing. It said this week that it would, like other services, start offering calls as well as messages.
Operators have struggled either to respond with services of their own the industry s joint efforts have been too slow to get off the ground or to find new sources of revenue. Meanwhile, European operators complain that their own markets, divided along national lines, usually with four operators in each country, are too fragmented. Thanks to national and European regulation, for instance, they find it much less easy to merge than Facebook and WhatsApp. As the Financial Times reported on February 26th, the European Commission this week presented its objections to the purchase by Spain s Telef nica of e-Plus, the German subsidiary of KPN, a Dutch operator, which would reduce the number of operators in Germany to three. Telef nica reported falling revenues on February 27th, having announced cost cuts the day before. That merely emphasises the sector s difficulties.