If the EU misses out on 5G it could lead to a drain of world leading tech companies in Europe (of which there are only a few), if it wants to catch up to America and China then it has to deliver on 5G before anyone else, writes Gunnar Hökmark.
Gunnar Hökmark is Head of the Swedish delegation of the European People’s Party (EPP) in the European Parliament.
With an agreement on spectrum in place, now comes the real challenge, namely that of actually delivering 5G before anyone else does. However, the outlook is not promising; Europe is struggling to keep up with the American and Asian avant-garde and will have to fight vigorously to regain momentum.
To start with, we need to recognize two simple facts.
First of all, the sooner, the better. If we are doing it, we might as well do it now. It matters who rolls out 5G first and who waits until the last minute. Europe needs a fully developed infrastructure by the start of 2020, not a day later, in order to be able to compete for global investments. The consequences of not being up there with the lead pack will be a continuous drain of world leading tech companies from Europe.
Today, very few global tech-giants are European and the investments in Europe pale in comparison to the figures pulled by North America and Asia. Over time, this development is even more evident. The U.S is by far the largest market for tech financing – roughly $150 billion in 2017 – and if anybody is catching up it is not Europe, but China.
The U.S, China, Japan, South Korea and, hopefully, Europe will lead the charge towards 5G. Whoever deploys it the fastest and most consistently, will also be the one to reap the full benefits of what will follow – an unparalleled digital penetration of entire societies, with new business models, services, markets and a brand new perception of what is and what could be digital.
If Europe wants to enter the new era of all things digital, there is no reason to wait.
Second, the more the merrier. More spectrum is better than less spectrum and we should rather opt for allocating a little too much, than face the consequences of doing too little. Too often, the discussion on which frequencies to allocate is de-politicised and end up being a closed debate among initiated experts. While certainly technical, it is somewhat straightforward. International standards are produced rapidly and Europe only needs to be quicker on the trigger than the rest to gather enough momentum to take the lead.
The spectrum deal opens up for crucial 5G-bands to be allocated by 2020, which is a solid first step, but there is much more to be done. Not only does Europe have to follow through on this commitment – and do so without exceptions and delays – but go beyond what is required to coordinate and harmonise auctions and allocations and, not least, secure that license durations reflect the dire need for investment certainty, long-term predictability and commercially sound conditions.
Neither of the national markets alone can gain the critical mass required for game-changing investments. A European market, however, sizes up to that of its competitors.
The sooner the better and the more the merrier. It does not have to be more complicated than that.