The GSM Association (GSMA) has offered a compensation deal to exhibitors at its annual Mobile World Congress (MWC) after the outbreak of COVID-19 led to the cancellation of this year's event.
But the offer discriminates against those companies, such as Ericsson, that pulled out of the show before it was officially called off. Those companies that did not cancel, including Huawei and ZTE, can choose between credit or a partial cash refund.
The trade association, which derives most of its income from the Barcelona-based MWC and spinoff shows, has unveiled several options for exhibitors as it tries to secure the future of what has become the industry's most important event: For those that did not cancel ahead of the show officially being called off on February 12, there is a cash refund option, but for those that pulled out of the event, only credits are available.
Companies that spent up to £5,000 ($5,856) on the 2020 show have been offered either a full cash refund or a "fees credit" equal to 125% of what they paid this year. This would entitle them to a discount equivalent to 65% of their 2020 spend towards next year's show costs, 35% in 2022 and 25% in 2023.
Organizations that spent more than £5,000 can opt for a cash refund equal to 50% of their 2020 fees, up to a cap of £150,000 ($175,685), or the same three-year discount package offered to smaller exhibitors.
But the GSMA notes: "Eligibility for a cash component to the financial package is for those exhibitors who did not cancel their attendance at MWC Barcelona 2020." So for the likes of Ericsson, Nokia, Amdocs, Ciena and many more that quit the event as the coronavirus spread, their only option is to apply for credit towards the cost of participating in MWC for the next three years.
Following criticism about the high fees it charges, the GSMA has also promised to roll back its rates next year to those applied in 2019 (only slightly less eye-watering than this year's). Non-exhibiting attendees, moreover, will be offered a full refund on the cost of their tickets.
"The GSMA values the loyalty and support of our members and partners in the mobile ecosystem worldwide," said John Hoffman, CEO of GSMA Ltd. (the offshoot of the industry association that runs the event), in a statement published today. "We are grateful to have the full support from our operator board of directors and already have formal exhibition support for MWC Barcelona 2021 from NTT DoCoMo, Orange, Telefónica and Vodafone."
The organization said its offer demonstrates "genuine goodwill" and that it would also ensure "the longevity and sustainability of the GSMA and MWC series of events."
Certainly, the offer has been structured in such a way that show floor exhibitors and those that spent a small fortune on meeting rooms will be out of pocket unless they commit to participating, and financially supporting, the MWC show for the next three years.
But at least those companies are being offered something. The compensation offer means the GSMA will take a major financial hit and could lead to cutbacks at the organization, originally set up as a lobby group for mobile operators: Less generous terms would have risked upsetting the companies whose participation in future events is vital if MWC is to thrive. Those that canceled, though, might find themselves in a frosty relationship with the GSMA as they are effectively being penalized for considering the well-being of their staff before all else.
Ericsson – one of the first to pull out – previously told Light Reading it was not expecting to get its money back. "Part of it might be recoverable and part of it not," said Fredrik Jejdling, Ericsson's head of networks. "When we took the decision, we didn't look at cost but at responsibility toward personnel." Now the Swedish vendor knows that only a credit slip is on offer, but it's hard to imagine that Ericsson would not have been turning up.
One company that withdrew from MWC ahead of its official cancellation was InterDigital. Patrick Van de Wille, the company's chief communications officer, isn't bothered about being ineligible for the cashback option. "Three years is fine – when we saw the two options, it was the one we preferred anyway," he noted in an emailed response to questions.
The GSMA's move comes weeks after it was forced into a last-minute cancellation of MWC Barcelona by an exodus of exhibitors worried about COVID-19. Organizers were criticized by some attendees for not canceling the show until most of its major exhibitors had already backed out.
While that cancellation has subsequently been overshadowed by the wider economic disruption the virus has caused, the latest update shows the GSMA is still fighting to save its business.
Before the outbreak of the virus, MWC was seen as the industry's most critical event, providing an opportunity for telecom equipment makers to meet customers and show off their latest wares. Ericsson, Nokia and other vendors that withdrew before the event's cancellation said they hoped to mitigate the impact this year through a series of smaller events held closer to important customer premises.
But other events have now been scrapped or delayed by the worsening pandemic and the question is whether even next year's MWC will be able to proceed. Although some medical experts think conditions may improve in the summer, others have warned that relaxing the tough restrictions currently in place could trigger another wave of infections until a vaccine is found.
Despite fast-tracking of research into COVID-19, most experts do not think a vaccine will become available for at least 18 months. Even if there is an improvement in the summer, the virus will probably not disappear entirely, and its resurgence next winter could be a threat to MWC in 2021.
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— Iain Morris, International Editor, Light Reading