The organizers of the Mobile World Congress (MWC), a leading tech innovation showcase held annually in Barcelona, announced on Wednesday that the event is being cancelled after a number of major exhibitors pulled out due to concerns over the novel coronavirus from China, officially named Covid-19 by the World Health Organization (WHO).
The board of GSMA, the industry lobby behind the MWC, was scheduled to meet to discuss the next steps on Friday, but called an emergency meeting on Wednesday afternoon after learning that Deutsche Telekom, Orange, BT Group and Nokia were also dropping out of the yearly event. After six hours, the GSMA board decided that the trade fair should not go ahead.
“With due regard to the safe and healthy environment in Barcelona and the host country today, the GSMA has cancelled MWC Barcelona 2020 because the global concern regarding the coronavirus outbreak, travel concern and other circumstances, make it impossible for the GSMA to hold the event,” said a statement posted on the MWC website.
The financial consequences of the decision will run into the millions of euros for a trade fair that was expecting to attract more than 100,000 people from 2,800 companies (see bottom box).
A legal battle is also opening up to see who will foot the cancellation bill: participating companies or the GSMA. Insurance companies do not cover contingencies such as epidemics, particularly when no official health alert has been declared in Spain. While exhibitors who voluntarily dropped out will have to deal with their own losses, it is unclear whether the GSMA could be legally forced to pay damages to those that did not.
Resisting to the end
Up until Wednesday evening, the GSMA had maintained that the MWC would go ahead despite the constant trickle of exhibitor cancellations from major tech companies including Japan’s Sony and NTT DoCoMo, US-based Intel, as well as Amazon, LG, Nvidia and Ericsson. On Tuesday, Cisco, AT&T, Sprint, Facebook and McAfee also announced they would not be coming. The Chinese cellphone brand Vivo also joined the cancellations, as did Taiwanese firm Mediatek, which makes processors for 5G networks, as well as the Canadian company Accedian.
The cancellations have been prompted by the global health alert over what has been termed the Covid-19 acute respiratory disease, which was first detected in the Chinese city of Wuhan. The death toll in mainland China from the new virus, which is a member of the coronavirus family and a close cousin to the SARS and MERS viruses that have caused outbreaks in the past, had reached more than a thousand people by Wednesday.
Authorities in Spain – ranging from the Health Ministry and the Catalan regional government, to Barcelona city officials – have been insisting that measures are in place to ensure people’s safety. So far in Spain, there have been two reported cases of the Wuhan coronavirus.
Organizers of the MWC estimate that the trade fair brings around €492 million to the city of Barcelona through hotel reservations, restaurant meals, taxi rides, event staff and more. Last year, the MWC created 13,000 temporary jobs.
One of the most expensive things about the MWC is renting out the exhibition space: a square meter at the Fira de Barcelona facility costs around €1,200. Just Ericsson and Facebook, two leading companies that dropped out of the event, had reserved a combined 7,200 square meters. For Fira de Barcelona, the MWC event represents 30% of its annual turnover.
Meanwhile, event passes were selling for anywhere between €799 and €4,999. And public subsidies will also be lost: the Spanish Economy Ministry contributes an annual sum of €5 million.
English version by Simon Hunter.