Central Agency in Telecommunications

Mobile network operators (MNO) have long been the engine at the heart of the modern communications industry. With operating licenses and obligations set by government, MNOs’ reach stretched from the shaping of technology standards in 3GPP to deciding what communications services consumers would get.

From the 2000s, however, internet era dynamics lessened the revenues dominance of voice communication; messaging, data, and media services filled the gap, beginning with the hype around 3G. That is when the MNO cog started to lose some of its motive force as the communications industry began to resemble an increasingly intricate machine.

A $300bn Market for Telco-APIs

How much of the opportunity will mobile network operators capture? 

The business opportunity to access mobile network capabilities via application programming interfaces (APIs was one of the top stories at MWC 2024. Valued at $300 billion by McKinsey, the management consultancy, the scale of opportunity positions APIs as a vehicle to move the industry’s revenue dial materially.

However, the opportunity will be complex to realize. From this GSMA webinar, it was evident that business model and monetization frameworks are a work in progress. In addition, market realization depends on a multi-party service delivery chain; critical elements to the telco API ecosystem reside outside of mobile network operators’ (MNOs) control. Finally, the mobile industry’s focus on API monetization and revenues puts the sector at risk of overlooking wider considerations and key market-development levers. 

Cluster Competitiveness in 6G Ecosystems

Finland’s academic, commercial and government connections can inspire other 6G clusters

3GPP’s December 2023 announcement, committing to develop the specifications for 6G, resolved one market uncertainty about 6G. 3GPP offers a proven governance framework for open, consensual and international technical standardization. It is also a globally recognized institution due to its track record and regional standardization partners.

There are, however, other technical and socio-technical aspects of 6G that are likely to alter 3GPP standardization. For example, there will be new frontiers to address as the scope of mobile networks extends to distributed communications and computing systems. In the socio-economic arena too, new expectations are taking shape. These touch on resource sustainability, capabilities to ensure resilience and trust, and socio-technical issues arising from digital world applications that go beyond purely human and machine communications.

2023 in Review: Connectivity Dominates but IoT-system Gaps Remain

Two investment themes bookended 2023. In January, the European Union backed a $100m venture capital fund, managed by Momenta Partners. In December, Softbank announced its EUR473m ($514m) investment for a 51% stake in Cubic Telecom. This development more than drew the eye as
exemplified by the analyst commentary around the high (16x) revenue to implied enterprise value multiple. 

In between, the level of corporate activity in the IoT sector continued at roughly the same pace in prior years, albeit down on the years of heightened activity going back five or so years ago. There were several developments among the vendor and network operator communities, but less so among the IoT platform providers. Governments became more active with an emphasis on security and protections for the consumer sector. 

Against the backdrop of 5G developments and 6G pathfinding, IoT is becoming a part of the fabric of enterprise operations and national infrastructure. Established players continue to emphasize connectivity, a relatively small portion of IoT value chains, while enterprises focus on quick-to-market solutions enabled by cloud providers and systems integrators. Both approaches risk leaving ‘system of systems’ issues for later consideration. 

Shifting Paradigms Set to Shape 6G

How is North America affecting policy change and industry competition?

The participation of White House and Congressional speakers at 6G World’s recent symposium shine a light on the strategic prioritization of next generation communications systems. Political participation matters in the context of 6G leadership ambitions, the practicalities of which I outlined in this three-part article series for 6G World - 1: Leadership, 2: Purpose, 3: Leverage. 

The event was equally important for shedding light on how industry stakeholders are approaching emerging 6G topics and market development activities. The mix of discussions spanned academic research, commercial and operational implications of 6G, industry competition, long-term Federal funding programs, policy priorities, standardization, and vertical-industry requirements. Rather than summarize each panel discussion chronologically, here are several threads that ran through the different sessions, beginning with the need to learn from the past.