Financial Crisis and SARS Survived... MWC Abruptly Canceled After 33 Years (Comprehensive Report 2)

Cancellation Decided as Companies Withdraw Amid COVID-19 Spread
"Huge Losses in Industry, Innovation, and 5G" Concerns Also Rise

On the 12th (local time), on-site staff are collecting the welcome banner posted in front of the exhibition hall at Fira Barcelona Montju?c in Barcelona, Spain, where the 'Mobile World Congress (MWC) 2020' was scheduled to be held. [Image source=EPA Yonhap News]

[Asia Economy Reporter Seulgina Cho] The Mobile World Congress (MWC), with a 33-year tradition, has abruptly decided to cancel the event due to fears over COVID-19. The "mobile communication festival," which had withstood the global financial crisis, the European debt crisis, and even the Severe Acute Respiratory Syndrome (SARS) outbreak in 2003 that occurred just weeks before the event, has now bowed to the China-originated COVID-19. Considering the significant participation of Chinese companies and Chinese visitors at MWC, this was an unavoidable choice, analysts say.

The Global System for Mobile Communications Association (GSMA), which organizes MWC, officially announced on the 12th (local time) that MWC2020, scheduled to be held from the 24th to the 27th in Barcelona, Spain, has been canceled. GSMA Chairman John Hoffman explained the background, stating, "Due to the COVID-19 outbreak and the resulting global concerns and travel warnings, it has become impossible to hold the event."

This is the first time in the 33-year history of MWC, the world's largest telecommunications and mobile exhibition, that the event has been canceled. In 2003, although SARS spread in early February just before MWC's opening, it did not significantly affect the event overall. Even during the European financial crisis and the global financial crisis, MWC was held on a large scale with about 2,000 companies participating.

◆ Increasing number of companies withdrawing after LG Electronics = This unprecedented decision came after major technology companies such as Ericsson, Nokia, Nvidia, Facebook, and Intel announced their withdrawal policies one after another, starting with LG Electronics earlier this month. These companies judged that virus spread would be inevitable at MWC, which attracts more than 100,000 visitors. The fact that many Chinese companies such as Huawei attend and that 5,000 to 6,000 Chinese people attend MWC annually also contributed to the decision.

The industry has expressed both relief and regret. Some companies that had not announced their withdrawal policies earlier for fear of alienating the organizers now say it is fortunate. However, concerns remain as opportunities to overview the latest technology trends and meet telecommunications and equipment industry officials from around the world in succession are rare. Domestic companies, including SK Telecom, have also canceled or postponed dozens of business meetings originally scheduled.

Ben Wood, research director at CCS Insight, said in a statement that day, "MWC is the highlight of the telecommunications industry," adding, "The impact on companies that have invested budgets and time should not be underestimated." Saskia Sagan, a mobile analyst at PCMag.com, also emphasized, "The cancellation of MWC is a huge loss not only for the industry and innovation but also for 5G," and highlighted that "MWC's true function is as a marketplace where small companies can meet all telecommunications carriers and infrastructure providers worldwide."

◆ Concerns over contraction of the global telecommunications market = The costs already invested will inevitably be lost. GSMA had requested the Spanish authorities to declare a health emergency but was reportedly rejected. In this case, losses from the event cancellation cannot be covered by insurance. An industry insider said, "Hundreds of millions have already been spent," adding, "Small and medium-sized enterprises likely spent a significant portion of their annual budgets." The economic impact of MWC is estimated to create 14,100 jobs and generate 492 million euros in Barcelona alone.

The China-originated COVID-19, which has alarmed the world, is also directly hitting the global smartphone market in the first quarter, centered on Apple and Huawei. According to a report by analysis firm TrendForce, global smartphone shipments in the first quarter (January to March) are estimated to decline by 12% year-on-year to 275 million units. By company, Apple and Huawei, which have a high production ratio in China, are expected to drop by 10% and 15%, respectively.

Market research firm Counterpoint also estimated that it will take more than two months for production facilities in China to normalize due to COVID-19 and lowered its first-quarter smartphone shipment forecast for China by about 30% compared to previous estimates. Especially for offline sales only, the decline is estimated to reach 70%. Huawei, targeted by the U.S. trade war, is expected to suffer the most significant impact due to its relatively higher dependence on the Chinese market. CNN pointed out, "The IT technology industry is particularly centered on production facilities in China, making it prone to disruptions," and noted, "The uncertainty of COVID-19 is significant."

This content was produced with the assistance of AI translation services.