Mobile 360 LATAM: region is ripe for 5G disruption

Google’s plans for RCS hint at how a deconstructed 5G network could shake up the incumbents which dominate Latin America

The GSMA has been holding the Latin America leg of its Mobile 360 series of conferences this week in Mexico City. The focus was, predictably, on 5G, with the large vendors reiterating their usual messages about new business models and the need for security and massive connectivity.

It is too early in the 5G process for there to be any particularly regional skews on the overall technologies and business models under discussion, but undoubtedly these will emerge as operators start to plan for the next generation. Latin America is a huge and diverse region, containing some of the largest mobile economies, such as Mexico and Brazil, as well as some of the smallest.

It has often been plagued by regulatory quagmires, though a growing ability to take big decisions on spectrum and follow them through was glimpsed when the region adopted the Asia-Pacific band plan for 700 MHz, rather than following the US as usual. This certainly laid better groundwork for cost-effective ecosystems and fast roll-out, but progress has been mixed.

As well as regulations, most Latin American countries suffer from lack of competition, since the region is so dominated by the two giants, America Movil and Telefonica. Government moves to increase competition are having some effect, as seen in Mexico where AT&T has entered the fray and America Movil has been forced to divest some holdings. But this is still a long way from an open and innovative environment, and if that is not enabled, 5G will struggle to fulfil its promises.

Unless, of course, 5G is used to bypass the incumbent players altogether and enable a new set of providers. Many Latin American countries, with their large populations heavily mobile-first, would be strong bases for the kind of services which can be launched by a small player with a subnet made up of small cells or WiFi hotspots and homespots, and a local service platform supported by Mobile Edge Computing. All that would be required of the incumbent MNO would be a limited MVNO arrangement to use the wide area network (which could be 4G) as an anchor.

This is the real disruptive potential of 5G – the deconstruction of the network to allow small and localized service providers to participate without massive capex investment, allowing cellular to follow a more open, WiFi-like approach.

Such radical change may actually occur more quickly in markets where consumer choice is frustrated by entrenched operators and regulations. That made a presentation by Google’s Todd Parker, business development manager for messaging, at the Mexico City event, particularly interesting. It focused on RCS (Rich Communications Services), a GSMA platform designed to help mobile operators add value to their voice and messaging services in order to compete with over-the-top alternatives.

But RCS could also enable new players to provide superior services based around all kinds of messaging, from voice to video to social media. Google signalled its interest when it acquired RCS developer and services provider Jibe Mobile last year, and then unveiled a new RCS platform at Mobile World Congress in February.

This put a technology which was supposed to empower MNOs against Skype under the effective direction of one of the biggest OTT messaging players. Parker said: “In the future, we will be introducing three new pieces of the puzzle, which we think will start helping the carriers take it to the next level, helping them monetize, helping messaging start making more money.”

Google is emulating the moves of OTT messaging providers like WeChat by promising to add plug-ins, chatbots and other enhancements to RCS. So far, RCS is positioned as Android’s messaging app, but it is not tightly integrated and does not require a download. That enables Google to offer constant enhancements as the OTT players do. “You have to iterate that product every two weeks. WhatsApp is doing it, Line is doing it. Everyone is doing it, so you have to be right there with them with a very high velocity rate for features,” said Parker.

The question is whether such an approach really will bear fruit among operators, which are still often poorly adjusted to web behaviors like constant updates, or whether, with the democratization of the mobile network which could come with 5G, other providers, including Google itself, will take advantage and seek to curb the growing power of Facebook/WhatsApp in emerging economies. RCS, along with VoLTE and VoWiFi, requires an IMS (IP Multimedia Subsystem), a major piece of infrastructure which is a barrier to smaller operators. However, in a 5G world where the RAN itself is likely to be hosted and sliced, offering as-required access to large numbers of service providers and enterprises, the same is likely to happen for a cloud-based IMS. Regions like Latin America are ripe for mobile disruption.

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