AI, 6G, and Satellites- What Really Mattered at Mobile World Congress

Full Transcript

Don Kellogg 0m10s

Hello, and welcome to the two hundred and eighty sixth episode of the week with Roger, a conversation between analysts about all things telecom, media, and technology by Recon Analytics. I'm Don Kellogg, and with me as always is Roger Entner. How are doing, Roger?

Roger Entner 0m23s

I'm great. How are you?

Don Kellogg 0m24s

I'm good. So it's Mobile World or it was Mobile World Congress last week by the time folks are listening to this. So we thought we could do a little bit of a update of what were the big news items out there, and maybe a little bit on, like, your thoughts on what's important, that sort of thing.

Roger Entner 0m41s

Yeah. No. Great. We had a team of three of our people on the ground there who met with a lot of folks, which then gave us the opportunity who the folks who were left behind to look at actually what happened in the news. And so a couple of things were really, really interesting.

Roger Entner 0m58s

Base Access had kind of a coming out party with Win Shotwell's keynote where they announced the Starling Mobile rebrand, mentioned a couple of their new partners. But most importantly, said like, we come in peace. We are cooperating with you. We're not here to kill you. I'm not sure if I trust the aliens.

Roger Entner 1m20s

Right? We'll come in peace. Yeah, but good. But also what we saw here is a bifurcation of the business model, with especially Deutsche Telekom being in the starting camp, and Vodafone Orange, Telefonica all in the AST camp. Guess they don't want to live in Elon's world either.

Roger Entner 1m40s

But what was also very interesting is subsequently, there was an interview, I think with Tom Hipkus, who said that the Starlink investment is relatively small and that he's open to work with others. So that was interesting. I think the big topic overall of the show was like AI, AI, AI. And it's the drive towards

Don Kellogg 2m2s

Well, that's like every show in every industry everywhere, right, over last year or two. Right?

Roger Entner 2m7s

So it's AI, AI, AI. But I think what's very interesting, and I wanna connect a couple of dots for the listeners, is that move to an AI RAN, where the compute is running on GPUs rather than on ASICs. Yes, ASICs are a lot more efficient, all of that, and ASICs are gonna be cheaper than an AI and a GPU run model. But Srinivopalan pointed that out in AI RAN world. What you can do is you can run a fallow compute model.

Roger Entner 2m38s

And then inefficiencies become actually virtuous. Because if you can run a fallow compute model, because the network is going to be dimensioned against the peak, that's when people are driving, that's when people are doing other things than AI workloads. In the night, during the day, when your traffic is much lower, you can resell the AI workloads that you are capable of doing to other providers. And you can run your own your own workloads. For example, T Mobile is doing their live translation.

Roger Entner 3m13s

That runs on their own base stations, on their own compute. Why buy it from somebody else? And then sell the data, right, or sell the parallel compute. We have been looking for a new brand new revenue stream for the telecom industry for now twenty years, and we haven't found one.

Don Kellogg 3m34s

Right. I mean, isn't this a rebirth of edge compute in some ways?

Roger Entner 3m37s

Yes. But in a smarter way. Yeah. Edge compute was looking to sell data center in this to end customer. The definition of edge becomes very interesting.

Roger Entner 3m48s

Right? Because a millisecond of distance with the speed of light is about 200 miles. So if you build an quote unquote edge compute center in between, say, New York and Boston, that's within a millisecond of traffic from both places. So that your edge now suddenly is still somewhere around Hartford. That's your edge for both Boston and and New York.

Roger Entner 4m13s

So it's not like in your neighborhood. But here, when you suddenly conclude it and sell it as AI token, By the way, Transal talks about kinetic tokens too. It's a much more fungible currency than compute for, you know, CVS or whoever. I think this is a very revolutionary trend where we have a new revenue stream coming.

Don Kellogg 4m39s

Well, everybody's trying to build out all this compute in the AI world. Right? And if there's, you know, something sitting on the network, maybe not at the scale in all one place, but collectively with scale, it could be really interesting.

Roger Entner 4m51s

It could be really interesting. On the other hand, it would make then the telcos compete with core Weaves and everybody else under the sun, you know, compete for more GPUs and TPUs. But it makes the integration of AI with telecom with AI much much tighter. And I think that's really exciting. What else do we see?

Roger Entner 5m14s

We saw more six g momentum. T Mobile, Deutsche Telekom launched the joint six g lab with Qualcomm, and they're aiming for prototypes in 2029, which will be a year earlier. By the way, the interesting thing here is, you know, the announcement coming out from T Mobile Deutsche Telekom, which just like reinforces how far ahead T Mobile is of of the others. Ten years ago, twenty years ago, it would have been Verizon who would have been here at the lead, and it's T Mobile. The other thing that's, by the way, what's really, really interesting is with the five g equipment cycle, T Mobile went into the five g equipment cycle before everybody else.

Roger Entner 5m58s

They're gonna be in the six g equipment cycle also five years earlier than everybody else, and that will give them an edge for you. The other thing which is really high on the European carriers, there's the sovereignty, and it's data sovereignty. They're all, like, paranoid about, oh my god, the Americans can then access our data and all of that stuff. They wanna have their own sovereign clouds and sovereign everything. Be careful what you wish for.

Roger Entner 6m27s

I think you're more protected under an American cloud, an American lawsuit, and an American court than you're protected under the whim. If it's a foreign cloud, if the president wants the NSA to break in, he can. Right? If it's the American courts that are protecting you, I think you have more protection than that. But go and knock yourself out, right?

Roger Entner 6m49s

And then we hear from, especially, Tim Hodges, again, the demand for more consolidation. There are smaller markets, especially they have competed away so much of their profitability that more than half of the European carriers' return is below their weighted average cost of capital. It's nuts. It is absolutely nuts. And the people who hear in this country scream like, oh, in Europe, it's so much cheaper.

Roger Entner 7m17s

Yeah. But you also have, like, really, really low investment. And the same number of people you know, Europe has, like, 500,000,000 population. The US is about three forty or so. The US is spending five, six times on CapEx than Europe.

Roger Entner 7m35s

As I always say, when I travel in Europe, I have more coverage holes than here, and I'm dropping back to edge. But then this technology that we phased out ten years ago is still my fallback.

Don Kellogg 7m46s

Well, and it's a more population dense area too. Right? So it should And it's more theoretically easier to cover. Yes. Exactly.

Don Kellogg 7m53s

More people with less towers. Right?

Roger Entner 7m55s

Yeah. And so be careful what you wish for. What else do we have? Broad is becoming a big topic. The GSMA affected at about $480,000,000,000 a year.

Roger Entner 8m7s

Several people were talking about it. I'm sure it will inevitably come up here as a topic. And then a number of exciting devices were introduced that we in The US will probably never see, like the Xiaomi 17 Ultra, the Honor Magic six, Leica, the Camry company has a partnership with Xiaomi. They launched one. So there's a boatload of exciting Chinese devices that will not come here.

Roger Entner 8m37s

Samsung came out with the s 26 a week ahead of time. So it made, like, several of our handset centric analysts or friends. We don't have handset analysts yet. Stay tuned, maybe next week. They had to travel to San Francisco just to turn around and then go to Barcelona.

Roger Entner 8m55s

It is what it is. But, yeah, that's the wrap up for MWC, what I thought was noteworthy. You know, next week, we will probably bring our the people who were on the ground to get us much more of the touch and feel than us here looking at it from a much more clinical perspective.

Don Kellogg 9m13s

Yeah. Our folks should be on a plane coming back here pretty soon. We'll sync back with them and maybe have some of them on too.

Roger Entner 9m19s

Exactly.

Don Kellogg 9m20s

Always a fun show. Always very busy. Always lots going on. We'll keep watching it for the next week or so.

Roger Entner 9m26s

Exactly.

Don Kellogg 9m27s

Alright. Thanks, Roger. Talk next week.