This article is part of our special report Mobile World Congress: Europe rushes to keep pace on connectivity.
There will be growing pressure this week on European companies and politicians as they struggle to keep up with Asia and the United States on launching fast 5G mobile services.
The EU’s struggle with legal roadblocks and its crippling level of investment will be the elephant in the room during discussions on the bloc’s bid to introduce 5G that will take place at this year’s Mobile World Congress.
EU policymakers, companies in the telecoms sector, and firms they partner with in areas like the car and manufacturing industries, will call for a quick move towards next generation 5G networks at the technology conference, which starts Monday (26 February) in Barcelona.
Their message is not so different from what they said at the 2017 congress. European telecoms operators and phone manufacturers like Nokia used last year’s event as a pulpit to promote the potential economic benefits of 5G networks. The technology aims to be much faster than 4G.
But European legislators and telecoms industry analysts described a new sense of urgency this year, as companies from other parts of the world get ready to debut their 5G services in Barcelona.
South Korea flaunted a trial of the fast technology earlier this month at the PyeongChang Winter Olympics, and the country’s telecoms operators will showcase their artificial intelligence services using 5G at the Mobile World Congress.
The EU is moving closer to its self-imposed deadline of making 5G available for consumer use in at least one major city per member state by 2020. National governments agreed last year that they want the faster internet networks to be available everywhere in the bloc by 2025.
So far, there have been some trial-runs of 5G in the EU: Swedish operator Telia started running its own service in parts of Tallinn and Stockholm last autumn.
Telecoms analysts say the past year has been decisive for Europe’s 5G plans. Several EU member states have drafted national strategies on how they will introduce the new technology. Companies have also moved towards sealing business deals for services that require faster internet.
“There has been a lot of work since last year on 5G in Europe,” said Johannes Gungl, chairman of BEREC, the umbrella group of telecoms regulators from EU countries. “On a political level the opportunities of 5G for the economy are acknowledged,” he added. “Operators and verticals are preparing themselves more and more.”
But the telecoms sector and other industries, including phone and equipment manufacturers, want Europe to step up even more. They see much faster connections as a chance for big business. According to Commission estimates, 5G could bring a growth spurt of €113 billion to the EU’s automotive, health, transport and energy sectors by 2025.
But operators will need to cough up around €56.6 billion to pay for 5G networks covering the entire bloc, a Commission study said last year.
Rounding up that money will be an uphill battle. Telecoms companies spend only half as much on developing 5G than US-based firms do, according to research from Barclays.
“That’s a clear message from the investors that it’s more attractive to invest in the US than in Europe. This is much needed investment in Europe. The simplification of regulation in the US is helpful for them,” said Lise Fuhr, director general of ETNO, an association representing large European operators including Deutsche Telekom, Orange and BT.
In the competition between countries vying to launch 5G first, Europeans have an added layer of pressure stemming from fraught discussions over a major EU telecoms bill. Negotiators want to seal an agreement on the draft legislation by April, but are struggling to clinch a deal on a handful of controversial measures.
For the Brussels policy crowd, discussions over the legal overhaul will continue in Barcelona.
National regulators, a group of eight MEPs and top Commission officials who are steering telecoms and tech policy will need to face company executives at the congress who demand clearer rules on radio spectrum and better conditions for investment.
“We are in a terrible hurry with these issues. We saw those showcases already during the Olympic games,” European Commission Vice-President Andrus Ansip told reporters last week. He described the low level of investment in Europe’s telecoms sector as “not so good at all”.
Ansip and Digital Commissioner Mariya Gabriel will both attend the congress, where they are scheduled to meet with company executives and regulators from other world regions.
Some telecoms executives will use their private meetings with Ansip and Gabriel to urge them to change EU rules to guarantee that licenses for their use of wireless radio spectrum will be valid for a longer period.
Changes to EU legislation on radio spectrum and investment conditions will be “game changers” for the bloc’s race to make 5G available, Fuhr said.
In the US, spectrum licenses are unlimited. European companies argue that puts them at a disadvantage because they are forced to pay high fees and go through lengthy government auctions more frequently. In the EU, spectrum is auctioned off to telecoms operators for an average of 15 to 20 years.
The Commission wanted its new law to set a minimum 25-year duration for those licenses, but national governments have so far rejected that proposal.
“It’s up to the regulators and policymakers to make 5G a reality in Europe,” said Afke Schaart, vice president of European operations for industry group GSMA, which organises the Mobile World Congress.
Schaart said the mobile industry is “ready to deliver on 5G and the gigabit society but the fact of the matter is that we just can’t do it on our own.”
“We’re lagging behind a little bit because we don’t have a consistent future-proof legal framework. And we’re 28 member states, we’re not the US,” she added.
Discussions at the Mobile World Congress will take place in conference halls full of vendors demonstrating new technology developments like artificial intelligence applications and driverless cars that rely on fast internet connections.
Gungl said those examples of applications and devices that use 5G are “crucial” because they might push telecoms operators to invest more in the technology.
While 5G trials in South Korea focused on using the technology for mobile consumers, European operators are taking a different approach. Many are defining their plans for 5G according to what B2B deals they can secure with other industries like healthcare, financial services and cars.
“Europe is putting quite an emphasis on services for the automotive sector,” said Frédéric Pujol, who heads the wireless practice at French think tank Idate.
Schaart said that European politicians and telecoms firms need to act faster to introduce 5G and make sure some EU member states do not lag far behind others.
But European operators’ plans to make money off of the technology through B2B agreements might make it harder to compare their pace with more consumer-driven American and Asian firms, Schaart argued.
“Europe is just doing things differently,” she said.