“It is of great importance to the GSMA to continue to convene the industry at this critical time where connectivity is on the cusp of a new industrial revolution.”
That’s what the GSMA, the mobile industry association that runs and organizes Mobile World Congress, or MWC 2020, says about the current state of the show. The group is clearly fearful for the mobile blockbuster event, which is set to begin on February 24, since attendance is being roiled by the coronavirus outbreak around the world. Is it still so important to convene the more than 100,000 people who attend annually, at a time when there are fears the show may become a hotbed of new infections?
Several major companies say no, and have responded by pulling out of the show. As MWC 2020 draws closer, will any of this prompt the GSMA to cancel or postpone MWC 2020? With the help of analysts, experts, and the major manufacturers themselves, we look at why this is highly unlikely to happen.
First, let’s talk about which companies have decided not to go to Spain for MWC 2020. LG was the first big name to cancel its plans for MWC 2020 over coronavirus fears. It was joined almost simultaneously by ZTE, which decided to attend the show itself but not hold its already announced press conference. Ericsson became the next on the list, and while it does not make phones, it has a massive presence at the show and dominates one of the halls; with 5G a major focus for MWC, the announcement was an enormous surprise.
On February 7, MWC sponsor Nvidia said it will no longer be sending any staff to the show this year. The company’s reason is the same as the others. It writes: “We’ve informed GSMA, the organizers of MWC Barcelona, that we won’t be sending our employees to this year’s event. Given public health risks around the coronavirus, ensuring the safety of our colleagues, partners, and customers is our highest concern.”
On February 9, Amazon also withdrew, citing exactly the same concerns, saying it would not be exhibiting or participating at MWC 2020. On February 10, Sony announced it would completely withdraw from MWC, and was soon followed by TCL, which will still maintain a booth at the show, but has canceled its press conference.
It’s not just MWC that’s facing chaos either. The Hong Kong Marathon in February was canceled, exhibitors have canceled attendance at the Singapore Airshow and fewer public tickets are being made available, Swatch has canceled its Time to Move event in Zurich, and even K-pop stars are canceling events in Asia over the coronavirus.
Is it an overreaction? As of February 10, 910 people have died from the coronavirus, and there are more than 40,000 confirmed cases around the world. Cities with millions of residents in the Hubei province in China, including Wuhan, the center of the outbreak, are quarantined, while strict travel and social gathering rules are being enforced in other major Chinese cities. Add in airlines canceling flights to and from China, quarantined cruise ships around the world, an increasing number of infections outside China, plus details about the virus itself still being discovered, and there’s obvious reason for concern.
Where does that leave the other 2,800 companies attending MWC 2020? In an incredibly difficult position. Ray le Maistre, editor-in-chief of lightreading.com, makes an excellent point on optics in a story about Ericsson’s withdrawal, which it says is based on guaranteeing the health and safety of its employees and booth visitors. “Which company is going to risk looking like they don’t share that view? If a company continues to say ‘We are still going to MWC,’ what does that say about it as an employer?” he wrote.
Unfortunately, death tolls and infection rates are not the only numbers being closely examined here as decisions about MWC 2020 are made. The other numbers have big, fat dollar signs in front of them.
Like any trade show, Mobile World Congress is a massive, heaving cash cow. It’s not just the return-on-investment through marketing or the deals made there by companies, but the getting there and getting organized in the first place as well. CCS Insight’s mobile analyst Ben Wood told Digital Trends:
“For big companies, there are clearly huge sums of money involved in terms of stand builds, staff, flights, accommodation and more, but they can probably weather it financially better than smaller businesses because of their large financial resources. For little companies, the impact could be far more significant given MWC often represents one of their biggest investments of the year.”
A 50% deposit is apparently required by the GSMA for MWC, and that amount is not refundable, according to this Spanish report. Anyone under the impression insurance policies will mitigate loses, this article indicates they would have needed to tick the box marked, “communicable disease coverage,” to get anything back. Not a common occurrence apparently, and it’s not usually included in standard policies. This put firms in a troubling predicament.
MWC is also hugely valuable to the GSMA and to the city of Barcelona, too. Mobile World Congress is one of the GSMA’s flagship industry events, and company tracker Owler puts the GSMA’s revenue as $283 million annually. The more MWC 2020 is affected by the coronavirus, the more that number drops. It’s estimated Ericsson’s giant, now-empty booth space was worth $6.5 million alone. Additionally, money talks outside the show. MWC 2019 earned the local economy approximately $517 million and created 14,000 part-time jobs.
Fortuitously for those people banking (literally) on the show, including Barcelona and the GSMA, the time may have passed for many other big names to cancel attending. An executive who regularly organizes a team at MWC, who preferred to remain anonymous, spoke to Digital Trends about the show, the costs involved, and the timeframe that makes postponement now unlikely.
“I think they [the attending companies] have no choice but to go forward,” we were told, and the prime reason comes down to logistics. Several weeks out from the show, companies can cancel and potentially only lose the cost of the event space rental, but the closer the date gets, the less likely this is.
“A small space can still cost half a million dollars,” our source said, but added this is only a third of the overall cost of attending.
“Even if you get none of that back,” our source continued, “you could still save on the shipping of sets and products, and hotels and flights.” For those companies that have started shipping, cancelation may no longer be a financially viable option. Our source’s conclusion at this point? “Maybe you have to put on a mask and just get through it.”
If major companies are already deep into MWC preparation, both logistically and financially, does that mean no others will pull out between now and the start of the show? Some are deciding not to attend, ostensibly for reasons other than the coronavirus. For example, Asus told Spanish media it will not have a booth at MWC 2020, but that the decision is not directly connected to health and safety regarding the virus. Executives may also simply decide not to attend at all, without striking the company off the MWC list. This appears to be the approach being taken by Samsung.
What about Chinese firms attending MWC? Huawei is planning to quarantine all staff attending MWC for 14 days ahead of the show, and do so outside China, in an effort to minimize the chance of spreading infection. And there may still be cancelations to come. Global PR and marketing expert Sean Upton-McLaughlin, who specializes in working with Chinese companies and is currently in the Chinese tech-hub city of Shenzhen, told Digital Trends:
“I think many decisions on whether to attend from here in Shenzhen will likely be made this coming week [February 9 onwards] at the latest, if they have not already been made. Internally at Chinese tech firms there is usually so much work and tasks packed together, things often feel like a rush or that they are being done at the last minute. I wouldn’t be surprised if they were still waiting to see how attendance plans settle down before making a final decision.”
The extended Lunar New Year holiday — put in place in China to slow the spread of the virus — officially ends on February 9, meaning many will return to work, and new announcements regarding the show may be made following this date.
This is extremely hard to answer. A great deal of publicly available information surrounding the coronavirus is often unreliable, due to it being tainted with misinformation, anti-China rhetoric, unfounded fears, and official data that many do not accept as being accurate. Other news is tabloid fear-mongering, whether it’s from tabloids themselves or individuals with an agenda. Add in the financial stresses on all committed to MWC laid out above, and you have the perfect recipe for legitimate worry — and an overload of constantly changing, sketchy information that helps no-one.
Case in point? Doctors speaking to Business Insider Spain say the show will “not be particularly dangerous,” that there will be health checks in place at airports, the virus requires very close contact to spread, and that washing your hands will be the most effective defense against catching anything. Reassuring stuff. On February 8, however, Chinese state media Xinhua said: “routes of the novel coronavirus infection include transmission via aerosol and respiratory droplets.” At the press conference where this was revealed, it was recommended that social gatherings be canceled, and windows opened regularly to maintain air circulation. Good luck doing that in the middle of Hall 4.
The GSMA is taking concerns very seriously. On February 9, the GSMA’s CEO John Hoffman sent an email to all attendees saying the event is moving ahead as planned and listing all the preventative measures in place. These include not allowing anyone from the Hubei province into the show, and all Chinese visitors needing proof they had been outside China for 14 days, plus temperature screening for everyone and a mass of public health advice and facilities on site. The mayor of Barcelona says we should listen to expert scientific advice, and that MWC 2020 “can be developed with absolute peace of mind and confidence.”
What about the World Health Organization? Its advice is simple: Do not travel to the Hubei province at all, and make only essential trips to the rest of China. Visit the U.S. Department of State’s site and it has a Level 4: Do Not Travel advisory against China as a whole. What about travel to Spain? The Foreign & Commonwealth Office in the U.K. is “not advising against travel to any other country/territory as a result of coronavirus risks.”
Unless you’re going to China, the general assumption is you should be free from most worries about the coronavirus. But how does that change for an event like MWC?
It’s a trade show with more than 100,000 people from all over the world, in close quarters with each other, for almost a week. Anyone who has already been to MWC knows how easy it is to catch a cold or flu at the event. All it will take to introduce mass panic at MWC 2020 is for one case of even suspected coronavirus infection to be discovered, and the exhibition halls will clear out faster than the doors will allow.
Digital Trends asked the World Health Organization for clarification on the spread of the coronavirus at large events like MWC and will update here when we hear back.
No individual wants to catch the coronavirus. No company wants to be responsible for an employee who catches it. The GSMA doesn’t want its own event to become the center of Spain’s coronavirus outbreak, and likely neither do Barcelona’s residents. Everything will be done to make sure MWC 2020 is a safe event.
Equally though, few will want to stand up and say they aren’t going, because fear is viewed as weak, and many laugh off the risks as being overblown. While the healthy will likely be fine in the event of catching the coronavirus, the potential of passing it on to someone who may not be able to cope with it in the same way is high. Personal responsibility is as important as corporate responsibility, and we suspect those who work for companies that have taken the decision to not attend, are likely very relieved they will not have to be concerned with any of this.
Yet here we are, talking about why MWC 2020 will almost certainly still go ahead. The only thing that’s likely to stop the show now is if the situation alters once again and a travel ban is enforced by the Spanish authorities. The question now is, how many will attend — and will any end up regretting it?
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