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Mobile World Congress Canceled Due to Coronavirus Concerns

Nate Lanxon

(Bloomberg) -- The wireless industry scrapped its biggest annual showcase after the coronavirus outbreak sparked an exodus of participants, roiling telecom companies just as they’re preparing to roll out new 5G services.

It’s the first time in MWC Barcelona’s 33-year history that organizers have called off the event, which draws more than 100,000 participants from across the world to check out the latest innovations, pitch to investors and do deals.

“The global concern regarding the coronavirus outbreak, travel concern and other circumstances, make it impossible” to hold the event, John Hoffman, chief executive officer of conference organizer GSMA, said in a statement to Bloomberg News.

The list of big-name attendees started to crumble on Feb. 7, when Swedish wireless equipment maker Ericsson AB pulled out, saying it couldn’t ensure the safety of staff and customers. As others pulled the plug -- from Sony Corp. to Nokia Oyj, Vodafone Group Plc and Deutsche Telekom AG -- it became harder for those remaining to justify their presence.

Bloomberg News reported earlier that GSMA could announce the cancellation as soon as Wednesday, after a meeting of members. As of Tuesday, the death toll in China from the virus rose to 1,113, and confirmed cases on the mainland have reached 44,653.

MWC was due to run from Feb. 24 to Feb. 27. GSMA had stepped up sanitary precautions to reassure visitors -- advising against handshakes, introducing body temperature scanners and a protocol for changing microphones, and restricting entry to recent arrivals from China.​ Some delegations had replaced Chinese staff with colleagues from other countries or sent their China representatives ahead of time to avoid being barred.

Who’ll Pay?

Every year, telecom heavyweights use MWC and the oceans of publicity that come with it to generate marketing buzz around their latest wares. A big focus this year was going to be fifth-generation mobile services, and now several companies will need to reschedule launch events. Chipmaking giant Intel had planned to announce products for 5G networks and will hold an unveiling another time, according to a person familiar with its plans. Motorola was gearing up to showcase new 5G phones.

The smartphone industry is trying to fire up stalled growth with the promise of higher data speeds and faster responsiveness. Smartphone shipments have been declining since 2016.

The decision to scrap MWC entirely was a difficult one, and it’s not clear who will shoulder the costs -- the participants or GSMA. The industry’s biggest players often spend tens of millions of dollars to exhibit at the show. Ericsson’s absence alone left a gap bigger than a standard American football field in the conference halls.

GSMA funds much of its budget from the event, charging 799 euros ($872) for a basic admissions pass.

Barcelona

MWC is also important to the city of Barcelona, Spain’s second-largest city, as well as to many of the smaller companies that wouldn’t otherwise have access to such a large audience of mobile carriers and consumers. Large national contingents from Turkey to South Korea take to the show to encourage deal-making and inward investment.

The regional government of Catalonia had been in touch with the conference organizers and said it saw no need to cancel events like MWC, Alba Verges, head of the Catalan government health department, said at a press conference in Barcelona.

South Korea’s LG Electronics Inc. was among the first to rethink its participation, pointing out last week that most health experts had advised against “needlessly” exposing hundreds of employees to international travel.

The global spread of the coronavirus has decimated other conferences, like Singapore’s annual airshow, which lost scores of corporate attendees but went ahead as planned on a smaller scale. Formula One confirmed it is postponing this year’s Chinese Grand Prix racing event due to the coronavirus outbreak, the Liberty Media Corp.-owned firm said in a Twitter post on Wednesday.

(Updates with information on abandoned product launches by Intel and Motorola in seventh paragraph.)

--With assistance from Thomas Seal, Niveditha Ravi, Saritha Rai, Debby Wu, Ian King, Gao Yuan, Mark Gurman, Scott Moritz, Rodrigo Orihuela, Angelina Rascouet and Loni Prinsloo.

To contact the reporter on this story: Nate Lanxon in London at nlanxon@bloomberg.net

To contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net, Rob Golum

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