 Live from Silicon Valley, it's theCUBE. Covering Mobile World Congress 2017, brought to you by Intel. Okay, welcome back everyone. We're here live in Palo Alto, California for Silicon Angles Media's theCUBE. Coverage of two days of Walter Walsh, 8 a.m. Pacific time to six both days yesterday, Monday, today, Tuesday, breaking down the news, getting the analysis, sharing our commentary and getting reaction from here inside the studio for folks in Silicon Valley who couldn't make it to Barcelona, but also covering what's happening on the ground. And of course, we'd love to phone in and get commentary directly from Barcelona. And we have on the line, Peter Jarrett, who's the chief analyst at Global Data, formerly a current analysis. Peter, thanks for taking the time. I know it's getting late there. It's close to bedtime for the people who are burnt out and for the people who are gonna go party. They're just going out. Thanks for taking- No, unfortunately, I mean unfortunately it's the same. So when dinner starts at nine o'clock, it's still early, late night, early morning, but no worries, glad to talk to you guys. So obviously the show at Mobile World Congress this year, it's kind of bipolar as always. You have the device people making their big announcements on Saturday and Sunday on the weekend, leading up to the show, LG, Huawei, everyone else, but the big phones, all the screens. That's the glam and sizzle, but behind the second half of the show is about the telcos, right? The transformation going on in the wireless world, the telco world, the service provider world, where the new network architecture seems to be the top story, a new network transformation, IoT, internet of things with cars, autonomous vehicles, smart cities, and certainly 5G has been at the center of all the action really since yesterday and today. So I want to get your take. Is that actually what's happening? Are we reading that the tea leaves on the grid properly? Is 5G the top story, or what's your take on the top stories out there right now? Yeah, no, I mean clearly as far as the buzz, where the buzz is, 5G is sucking a lot of the energy out of the, excuse me, out of the show. I think it's interesting, I mean that's, the show is sort of like a proverbial blind manual. Excuse me, I mean there's so much going on, that depending upon where you want to focus, you could come away with any take away, but you could focus on the devices, you could focus on IoT, you could literally come away with anything, but 5G has been the one piece of news that sort of in the background of anything. I think it's in the background of everything because in part, the definition of 5G is so broad, right? There's the radio access side, there's the core network side, IoT is a big part of 5G reaching out to digital industry, vertical industries is a big part of it. So as operators start talking about 5G, it's easy enough for every vendor to sort of attach themselves in some way. And I think that's what we're seeing here this year. It really is, you know, the question of how do we get to 5G, are we ready for 5G? We saw on Sunday, the big news was acceleration, how are we accelerating towards that? Dan Jim and one of the big industry organizations out on a panel's day with CEOs from, you know, a number of major mobile operators and they're talking about, you know, how we're going to get there. That's really from the transformation side of things, completely right. That's the big question I would like. Is 5G ready? Obviously it seems to be, you know, hyped up big time, you know, as we said in one of our blog posts, hug the hype because 5G, people want it, all go there. But is that the real meaty story or is it's kind of like AI in my mind? AI is obviously relevant, but, you know, where's the real AI? We're seeing more IoT conversations in the back channel around service provider impact to IoT. So I'd love to get your thoughts on, you know, the impact of IoT to the business model and architecture of the service providers. Yeah, it's interesting. IoT, I mean, I think if we look at IoT versus 5G, right, one is clearly still in that theoretical stage. One is, you know, we kind of understand IoT and I think a number of times I've heard people talk about, you know, IoT is the way that service providers will, you know, figure out how to grow their top line, not just improve the bottom line, right? I mean, there's like last year and the year before that there's a lot of discussion around network transformation that will be OPEC-reduced and it'll be CAP-reduced and then someone will save them money. But we know that, you know, they also struggle to grow their revenues, improve their top line. I think a lot of folks are looking at IoT. The question I think is still out there, that I'm not necessarily seeing the best here is how, right, because a lot of that focuses on how do they move beyond just being an access provider? And we know that, yes, we're going to be talking about building the devices that they'll be low band with many of them and so the connectivity revenues from those may not be where they need to be to really help grow those revenues. And so the question is how do the service providers move beyond that or how do they make sure that they move into industries deep enough so that connectivity, you know, they'll be reaching enough industries, reaching enough connections that the connectivity revenue will be significant. And I don't know that we've got an answer for that. I mean, everyone's talking about vertical industries, right, everyone. And the operators, I think it was interesting, it was like those from both operators and vendors that we don't know them all enough. What's the key enabler, what? Running a panel, I was running a panel with CTOs from Ericsson, Nokia, and Huawei. And they all said at the end, you know one of the biggest concerns for 5G is that we pin the hopes of 5G to some extent on helping enable these vertical industries, right? How do we reach out to mining and utilities and smart cities and how do we make 5G, you know, pervasive and employ not just consumers, but the need of those markets so that there's no certainty that we actually understand what they need. And that's why we can go out and service them successfully. And so there's some nice examples of automotive that we're beginning to see progress on, but a lot of them I think are still in that sort of, we don't know enough to know how it'll help us. That's great. And now, so we have Peter on the phone here, an analyst breaking down the commentary. Question for you, you know, as an analyst, you have a good approach on this. And I wanna get some commentary on you around for the folks that are trying to keep up with the turbulence. I mean, there's so much going on. You got wireless, which has its own set of things. Is it more bandwidth or more mobility? What's the trade off? Is it this G, this spectrum, unlicensed all this craziness, radios, core network you mentioned, a lot of moving parts. Question is, how do you figure out the tell signs of success? And what are red flags? So what do you need, what are you looking for that is proof points that things are going in the right direction for the industry and proof points that there's red flags? What's your key indicators for benchmarking this opportunity around 5G and network transformation to make all this stuff work? Smart cities, autonomous vehicles, et cetera. It's a great question. I mean, I think in a lot of the conversations here coming down to the focus on business versus technology. And I'm not too worried. I mean, we need to continue to watch technology and make sure the technology gets rolled out. But we need to make sure that what we're hoping to do with 5G that we can do that. And we're seeing it, right? You know, the idea of what we saw on Sunday with the move, the plea, if you will, from a lot of industry participants to accelerate to this kind of sort, great. And I've got no doubt that we can solve the technology issues, whether that's supporting on my suspect or my shared specs from the CVRS and a millimeter wave or whatever it is. No doubt that we can make this work. I think where I look to make sure that things are okay is, you know this will really matter if it's just, you know, 5G is no different than what we saw with 3G to 4G. And one way to think about it is when we moved from 1G to 2G and 2G to 3G and 3 to 4, it was always a fairly one-dimensional move, right? 1G to 2G was really that one-voiced task. 2G to 3G was, you know, really moving to do basic data. 3G to 4G was about more data, meaning we took IT networks. But, you know, what we see with 5G is that it can't just be about more data. It can't just be about faster, right? Is that, you know, we've seen, in fact, just look at the US, right? Where the pricing is and the price war. So just throwing more bandwidth at this isn't gonna help the operators. What we need to do is to figure out how they leverage these new technologies to tap new markets and grow the revenues, right? Grow their business. And I think that's why we're hearing so many people talk about all these different industries. Do I know that automotive is the best example now? You know, I think automotive is sexy. It's eye candy. It's total eye candy for the rally around it. But, you know, whether it's public safety or automotive or utilities, or industrial automation or retail or whatever, in that, seeing operators build those relationships. Manage to serve them. Figure out how to serve them and show them some success that I'm looking for. Otherwise, it's just gonna be no different than the other G. And it'll be sort of a race as well. Yeah, I agree. I think another thing too. And, you know, when you look at it, even when wireless was exploding, you know, the question for the carriers and the operators was can they move past managing subscribers and truck rolls and billing our competencies to being much more comprehensive through their operations? I think now more than ever, that's the big pressure point. I mean, isn't it? They have to go outside of their core competencies traditionally and get down and dirty. Yeah, and, you know, and I'm always encouraged when I see the interesting new business models, right? You know, so when you saw AT&T move, it's just a live product, you know, and try to take that internationally or what you've seen derived and do this week. You know, it's interesting for the business models. You look at telephonic, it's doing data platforms. You know, I think those types of innovation are great, but whether or not they work, I'm not too, you know, I'm not too much in the industry or whether or not those, what I am more concerned about, again, is how do we reach past that consumer and just basically, you know, business user use case because, well, it looks like, I mean, you can talk about IoT, and I think IoT and IoT get linked again, but every IoT, except for consumer IoT, which again will be addressed, those industrial IoT use cases are all vertical specific. And so, you're not gonna get to address that. So if others won't, unless they come to understand that and make sure that they can actually reach out to those, they're gonna get you through. Peter, Chair, Chief Analyst at Global Data, formerly current analysis, great to chat with you, calling in from Barcelona. Thanks for taking the time. Final question for you. What's the bumper sticker on the show this year? You know, as you look at the formations of what's been announced and where it's going on the trajectory, you know, wraps up, you know, next day and a half, what's gonna be the bumper sticker for this year's Mobile World Congress? Yeah, you know, honestly, I think, you know, what's probably surprising is, so the bumper sticker will probably be LTE before 5G. And what I mean is that as much as we're talking about 5G and it's really, you know, a big set pre-topic, what you're seeing is so many operators talking about how they see, at least in the near term, going into the long term, LTE supporting them, especially with Gigabit LTE speeds. Right, you've got Qualcomm talking about what they can do delivering Gigabit LTE speeds on a 20 megahertz LTE carrier than you'd even like to expect. You hear T-Mobile, who came up in the first morning at a presentation, there was a session, a media event with Eric. As much as Eric was talking about 5G, no way some people will have to talk about how excited they are about the LTE network, right? And I think there is this recognition that yes, 5G is coming, but we need to be able to. All right, Peter, we just lost you there. Quick, quick, I lost my battery on my phone here, or the speaker. Thanks so much for your commentary, really appreciate it. No, no worries. All right, we have a great time in Barcelona. Get some sleep or go out and hit the nightclubs. As always, going on the ground, getting to our friends and colleagues out, doing the work, pounding the pavement. That's Peter, he's got the great commentary we'll have that on replay as well, and it'll be up on YouTube as well. So that's theCUBE with more coverage from Mobile World Congress after this short break.