Sify-Banner1

International Trade wars Threaten to Spark a 5G Arms Race – but is Europe Even in the Running?

5G is rarely out of the headlines, but this week a visit to Huawei’s 5G roadshow in London and the news that Ericsson had secured a €250 million 5G finance package, helped bring it back into the spotlight.

Operators in Europe are making the right noises about 5G and are quick to emphasise the transformational potential of fifth generation mobile networks, but appear split over whether it is better to be first to market, or keep your powder dry until the technology is fully refined and tested.

BT has committed to have a fully commercialised 5G product in the market by 2019, while O2 (and its parent company Telefonica) has taken the opportunity to claim that any 5G launch made prior to 2020 will essentially be nothing more than “5G-Lite”. If BT does succeed in launching 5G in Q4 2019, it would make Britain one of the first nations in Europe to launch the next generation mobile technology.

Europe lags behind

This week, a new industry report shows that Europe could be slipping further behind the US and Asia in the race to rollout fifth generation mobile technology.

This in itself is not new information, with analysts long predicting that Europe was playing second fiddle to its neighbours to the East and West in 5G R&D.

Regardless of how quickly The UK can launch 5G, the general consensus is that Europe will struggle to bring 5G to market before the latter half of 2020 or even 2021.

“5G it will be a phased introduction. It will begin in 2020 and then over the next 7 years or so it will reach more comprehensive population coverage,” said Bengt Nordstrom, CEO of Northstream.

“The introduction of 5G will vary from region to region. China and the US are investing more – they don’t have better business cases than we do, it is just that in the US they have greater faith in the ability of technology to solve problems. It’s in their culture to go ahead with it [5G].

“In China it will be fuelled by the potential industry impact – how the Chinese ICT industry will be impacted and how they will benefit from that. It’s a governmental directive to launch early over there.

“Now, the two find themselves in something of an arms race and therefore they will push each other to launch earlier and earlier,” he added.

Northstream’s 5G analysis report identifies Japan and South Korea as the two nations who are most likely to be “first for 5G”. 5G trials have been underway in both countries since 2017 and both countries expect to start rolling out 5G on a nationwide basis in 2019.

The US will see regional rollout as early as Q4 2018, according to the report.

“From the US government’s point of view, 5G is right at the top of Trump’s agenda,” said Nordstrom.

So why are European operators lagging behind their Oriental and Occidental cousins when it comes to 5G? One of the main reasons is scale.

“In the US, operators will launch 5G in a single market of 350 million consumers whilst in China that market will contain over a billion people. In Europe we launch on an individual operator basis in medium sized countries. We do not have the same scale.

“The key difference here is that in Europe we have very consumer focused policies. The European regulators have the mind-set that Europe is a perfect market [for consumers] – we have very low prices for mobile broadband, we have competition between the key players, prices continue to fall – what more could you want?

“There is a flip side to that though because consumers in this country do not have access to particularly good quality broadband.

A missed opportunity

Lagging behind on 5G will mean that Europe loses out on far more than mere bragging rights. 5G will underpin the evolution of digital economies around the world and will ultimately lead to a huge upswing in workplace efficiency and profitability. This upswing will be built on the foundation of ubiquitous connectivity – namely as many fibre to the home (FTTH) connections and as deep 5G mobile coverage as possible.

“When you have those things in place, then you can dramatically accelerate your drive towards digitalisation. If you don’t have those things, you can’t deliver.

“That is what Europe will be missing out on and, in my opinion, that is a huge mistake. The most likely scenario today is that with the investments that we are seeing in China and the US, they will have a significant 5G footprint when we come to 2021-2022 – We in Europe will not have that. That will give us really different levels of digitalisation.

Nordstrom warns that Europe’s regulators will need to grasp this point to stop the region slipping into a state of digital lethargy.

“I try to mention this to European regulators, but it doesn’t seem to get through. They seem to think that 5G will just happen anyway.

“The idea that Europe needs to try and keep pace with The US or China [in terms of 5G investment] doesn’t seem to occur to them – at least for the ones I speak to.

“Europe historically has been the region where the foundations of global standards took place with the establishment of GSM. 30 years ago, we worked together in Europe, across national borders and we agreed on what the standards should be. When we look at the state of play now – its like we don’t remember that legacy,” he concluded.  – Total Telecom

Share this:

Leave a Reply

Your email address will not be published. Required fields are marked *

Stay Updated on Enterprise Network and Carriers Industry.
Receive our Daily Newsletter.