The risk reward profile for attending MWC 2020 is deteriorating by the day

Intel is among the latest major exhibitors to pull out of MWC as rapidly diminishing attendance makes the risk of coronavirus infection increasingly hard to justify.

Many of the most recent cancellation announcements have come from US companies or ones with a major US presence. A major reason for this will be how vigorously litigious the Americans are and thus the massive legal risk companies put themselves in if they knowingly put their employees in harm’s way.

“The safety and wellbeing of all our employees and partners is our top priority, and we have withdrawn from this year’s Mobile World Congress out of an abundance of caution,” said the Intel statement. “We are grateful to the GSMA for their understanding and look forward to attending and supporting future Mobile World Congress events.”

US telecoms R&D company Interdigital is another to have thrown the towel in today and our conversations around the industry indicate a lot of other US companies have made the decision not to attend, but haven’t formally announced it yet. On top of that Chinese attendance will be massively diminished, in part due to the impracticality of self-quarantining for two weeks prior to the show, but again many formal announcements are being delayed.

One reason for this could be the game of financial cat and mouse show organiser GSMA will now be having to play with its exhibitors and attendees. We asked the GSMA what the cancellation conditions are but have yet to hear back from them. The MWC site offers the following cancellation terms for attendees, but the exhibitor terms don’t seem to be published.

Whether or not those gratuitous block capitals have been inserted recently we can’t tell, but it looks like the GSMA is determined not to be out of pocket, and you can see why. A few years ago Light Reading looked into the cash the GSMA makes from MWC and came to the conclusion it trousered over $35 million in profit in 2014. Since the show has grown dramatically since then, a figure closer to 50 mil doesn’t seem at all inconceivable.

The GSMA is a non-profit, so it’s safe to assume a lot of what it makes from MWC is accounted for by staff costs. Such a huge, unexpected hole in its balance sheet is bound to have profound organisational implications. So not only is the GSMA is a very difficult moral position over the prospect of creating a giant human petri dish in Barcelona, the financial implications of cancelling, after which it would presumably be obliged to refund exhibitors and attendees, are colossal.

If not before, it looks like some kind of further decision will be made this Friday, with a couple of big Spanishpapers reporting the major operators that actually own the mobile trade association are getting together to make a call one way or the other. Those papers presumably have sources within the venue and it also seems safe to assume there is regular dialogue between the Fira and the GSMA about how much the latter has to pay the former in the case of a delay or outright cancellation.

As ever with things like legal liability and insurance, it all comes down to blame. Right now it still seems to be down to the discretion of the individual or company whether or not they’re willing to take the risk of contracting coronavirus in Barcelona, but that could change. The GSMA likes to refer to the World Health Organisation for the latest on the coronavirus situation and if the WHO officially upgrades it to a ‘pandemic’, that could shift a lot more of the financial liability over to insurers.

That in turn would probably precipitate the outright cancellation of MWC 2020 as, even if the GSMA still wanted to go ahead, what little financial incentive people have to risk attending will have been removed. But even if the WHO never makes that move, the risk reward profile for exhibitors and attendees is getting worse by the day.

Even if you leave aside concerns about coronavirus, MWC is an operator show and most people attend to get precious face time with operator execs and try to flog them stuff. If those execs aren’t there, then what’s the point in making the effort? Every single cancellation announcement makes further ones more likely because, even if none of their upfront costs are refunded, people will increasingly conclude there’s no point in throwing good money after bad.

UPDATE – here are the MWC exhibitor Ts and Cs: https://www.mwcbarcelona.com/wp-content/uploads/2020/01/Exhibition_Terms_MWC2020.pdf