It seems difficult at this point to find someone who says 100% that it is a good idea to keep the Mobile World Congress celebration. The defection for fear of the coronavirus is so profound that the organizers of the technological event have succumbed to their resistance and will address the next day 14 the possible cancellation of the event in a meeting. Rakuten, the Japanese e-commerce giant, Deutsche Telekom, the largest European operator, and Nokia, the Finnish telecommunications network company, joined the company casualties on Wednesday.
The abandonment of Nokia after the withdrawal of Ericsson, leaves Huawei as the only telecommunications network firm, in a congress in which the 5G repeated as one of the great protagonists. Meanwhile, the ‘no’ of the German operator means the loss of one of the most important companies for the fair due to political issues and size of its facilities. These marches could be the drop that fills the glass so that the GSMA finally decides to cancel or officially postpone the event.
More than twenty companies from around the world have already canceled their attendance at the next edition of the Mobile World Congress that takes place in less than two weeks in Barcelona due to the risk of infection of the coronavirus, now remains to be seen what will it cost for these companies to say goodbye to the mobile technology fair most important of the year and who covers these expenses in case of global cancellation.
Everything will depend, according to the experts consulted, on whether the Government changes its warning about the coronavirus, since otherwise the organization (GSMA) will have to face millionaire compensation for the reserves that more than 2,000 companies made (and at a high price ) for the reservation of the stands in the pavilions of the Fira de Barcelona, which is also paid one year in advance. However, if it is a State decision, the GSMA could escape this obligation.
“The legal is above the economic, if the closure is declared by force majeure, there will be no lawsuits against the organization, but the insurers will have to pay compensation depending on the type of contract,” academic sources explain to this newspaper. Thus, the key is in the contracts signed between the GSMA with the Fira and with the exhibitors, since although the insurance has sections based on natural or terrorist disasters before the event, they do not cover a health alert.
For now, the Government’s position is the opposite of that desired by the GSMA, if one takes into account who carries the costs. The Minister of Health, Salvador Illa, meets Wednesday with the Minister of Health of the Generalitat, Alba Vergès, but said that “there are no public health reasons that advise the cancellation of Mobile,” although he added that in case you have to Take additional measures, it will be done. So, for the moment, they leave the responsibility of canceling the event in the hands of the GSMA.
Although the final resolution will not be known until Friday, Fira sources indicate that for now all orders and contracts have been paralyzed. In previous editions of the MWC, more than 1,000 waiters and chefs were hired from among the 12,000 jobs generated annually by the congress. The same sources assure that the expenses in these personnel will be null in case of cancellation, because the contracts would be annulled.
The compensation will be directed, in any case, to companies that have not previously canceled their assistance, but those that are forced to do so because the organization suspends the event. Therefore, it could happen that many are waiting for the official resolution on Friday to make a decision on their positioning, even knowing that they will not finally attend the meeting.
And is that the costs of assistance are enormous, hardly compensable now that it seems that the information focus will be more in if there is a real risk of infection among the attendees than in the technological developments that arise. Although companies usually book hotels up to one year in advance, rooms in Barcelona increase in price up to 2,500 euros per night in case of standard accommodations, sources in the sector confirm. And today, the AVE tickets Madrid-Barcelona to travel between Monday 24 and Thursday 27 February have a price that exceeds 200 euros.
The price of the stands is also exorbitant. They vary depending on the size of the exhibitor and the area where they are located, but the approximately square meter is rented for about 25,000 euros. That is, if a company with a medium stand such as Sony (40 m2) could be paying up to one million euros for four days of the fair only in relation to the exhibitor. Apart from transportation expenses, employee allowances, trips between the Fira and the center of Barcelona, hotels, etc. That is why some smaller technology companies, such as Spain’s BQ, made the decision two years ago to stop attending the event.
But there is an intermediate solution. That instead of canceling, the event is postponed. A much more economically profitable way for the organization and companies. The problem would be to look for an alternative date because the Fira Gran Vía site has a very tight schedule in the coming months, with very large fairs that apart from its celebration, involve previous and subsequent weeks of assembly of the exhibitors. Fira sources indicate that due to calendar reasons, it is most likely to be postponed at the end of June or beginning of July, which entails the problem of overlapping with the Mobile World Congress in Shanghai, much less in importance, but also important for the GSMA.