Fifteen years ago, the mobile world was very simple. You had specific vendors that made equipment for mobile phone networks and a value chain that was linear and predictable. Fast-forward to today and the value chain is far more diversified, which presents both a challenge and an opportunity to MNOs and their supplier partners.
The exhibitor figures at Mobile World Congress demonstrate this trend perfectly: in the past decade or so, the number of organisations participating has more than doubled, from 1,100 in 2007, to 2,400 in 2019. A key driver for this diversification of the mobile value chain is the pace of innovation required; technical solutions are becoming much more diverse and increasingly cloud-based, which has encouraged more businesses to enter the industry.
Another factor has been the change in physical network infrastructure and its location – for example, in the radio layer we have seen expansion from just towers and rooftop locations down to street level and inside buildings – which has also accelerated the growth in the number of industry participants.
As more and more organisations enter the tech ecosystem, end-to-end delivery from a small handful of big vendors is firmly in decline. What does this mean for MNOs? The recent explosion in innovative companies involved in the roll-out of networks means that MNOs will continue to need to step out of their comfort zone (working with a set list of traditional vendors) and establish a partnership-based model of diverse expert suppliers. The next evolution of networks is going to involve a wide diversity of solutions and will require cross-collaboration from organisations acting as partners to deliver.
Steep learning curve
MNOs will need a broader set of skills and expertise to leverage a more diverse supplier ecosystem, requiring them to adapt, both technically and culturally. Creating future-proof networks in a post-pandemic and increasingly tech-enabled world now revolves around being able to orchestrate a range of partners. Lots of organisations that have never worked together before will have to learn how to collaborate on projects – and it is going to be something of a learning curve.
Across the mobile industry, organisations will need a broader set of skills to manage this non-linear approach to business. They will need to invest in skills and partnerships and integrate their working practices with others. As more innovators enter the market, this ability to adapt and be flexible is only going to become more important.
Who is leading in mobile value chain diversity?
As the mobile network ecosystem has morphed beyond the “tower and data centre” into streets, buildings and the cloud, this shift has brought a whole other range of partners into the equation. We first started to see more diversification in the mobile value chain in the US around a five years ago. Leading MNOs started working with suppliers (e.g. software companies) and asset providers (e.g. local authorities) who were outside their traditional list to bring new features, functionality and enhanced network performance to market much faster.
Outside the US, there are some great examples of multi-vendor partnerships delivering incredible mobile network outcomes across Latin America and Africa, where stakeholders work closely together on everything from technological solutions to policy issues. In Europe, where there are around 100 MNOs, those MNOs and their supply chains are starting to work in a more collaborative manner. At Cellnex UK, we see a lot of interesting collaboration now starting to take place in the market – for example, highly diverse partners coming together to develop and trial new 5G use case projects.
Collaboration and diversity of solutions are key to success
The trend towards mobile value chain diversification will get stronger. To succeed in the next evolution of mobile networks, stakeholders will have to learn how to work together and with those that facilitate strong partnerships. The organisations that succeed will be those who manage their diverse value chain most effectively. It all starts with an evolution in operating ethos. Organisations that can create the mindset and conditions for a flexible, inclusive and diverse approach will realise the full potential of a broader, more advanced set of solutions that deliver their strategic ambitions.
