5G & the Tech Decline of Europe

Pre-5G activity in Asia and the US does not mean Europe will lag on actual 5G rollout, but it points to the ebbing of European influence.

Iain Morris, International Editor

January 10, 2017

5 Min Read
5G & the Tech Decline of Europe

The decline and fall of Europe has become as fashionable a subject in technology circles as in political and economic ones. Noting the absence of a European Google, and the inexorable rise of Chinese technology players, commentators fret knowingly about the region's various shortcomings.

The anxiety now extends to telecom. Fear is growing that a tardy launch of 5G, a next-generation mobile technology, will have grave implications for Europe's future competitiveness. In all likelihood, much of this fear will prove misplaced. But it hints at the ebbing of European influence.

It is not hard to see why there is concern. Europe is home to relatively few of the high-tech giants steering the development of 5G technology. Ericsson AB (Nasdaq: ERIC) and Nokia Corp. (NYSE: NOK), its champions, have been losing out to Asian rivals. Europe's telcos, meanwhile, have been more reticent about 5G than operators such as US-based Verizon Communications Inc. (NYSE: VZ), South Korea's KT Corp. and Japan's NTT DoCoMo Inc. (NYSE: DCM), all of which have publicized plans to introduce 5G technology in the next three years.

Spectrum availability is a further worry. In the US, Japanese and South Korean markets, companies expect to take advantage of higher-frequency 28GHz airwaves to provide superfast services. That is persuading equipment makers to concentrate their initial efforts on a band that remains strictly off-limits in Europe, where it is reserved for satellite communications. (See Spectrum Hurdle Could Trip Europe in 5G Race.)

Yet the services that take shape over the next three years will be 5G ones only in the promotional literature. The first 5G standard is not due until 2018 and will not see commercial deployment until at least two years later. Instead, operators will be experimenting with aspects of 5G technology that could eventually become part of an official standard.

There are a number of possible motivations for these players. France's Orange (NYSE: FTE) reckons there is a more pressing need for mobile broadband technology in the US than in Europe, which is comparatively well served by fixed. Deutsche Telekom AG (NYSE: DT) similarly believes that specific market requirements are spurring action. "These activities appear to be utilizing specific elements of 5G to explore and satisfy real local needs, for example use of mobile capabilities to replace fixed telephony backhaul," said a spokesperson for the German incumbent in comments emailed to Light Reading.

In high-tech countries due to host major sporting events, authorities and companies alike are also keen to show off their 5G credentials. With the world's attention focused on the Winter Olympics in South Korea in 2018, and the Summer Games in Japan two years later, KT and DoCoMo will be looking to demonstrate their 5G leadership in front of an international audience.

Such early and well-publicized moves do not necessarily mean the 5G standard will take root in these markets more swiftly, however. Luke Ibbetson, the director of research and development for UK-headquartered Vodafone Group plc (NYSE: VOD), describes Verizon's "fixed wireless access" scheme as "niche," suggesting it will have little bearing on 5G as a mobile broadband technology. Arnaud Vamparys, the senior vice president of radio networks at Orange, is similarly dismissive of "non-standardized" 5G activities. "Experience has shown that non-standard solutions cannot be successful in the mobile telecommunications industry," he says. (See European Telcos Slam '5G' Efforts in Asia, US.)

Next page: Gaining a 5G edge

Gaining a 5G edge
Moreover, the availability of 28GHz spectrum might give its licensees little time-to-market advantage. Not one of the World Radio Conference's candidate 5G bands, it will have "limited geographical opportunity," according to Ibbetson, and has been largely associated with the fixed wireless access scenario. It certainly appears less suitable for covering wide areas than spectrum in the 3.4GHz to 3.8GHz range, which would allow operators to re-use existing sites and has already been "harmonized" for rollout with mobile network technology. Deutsche Telekom and Orange also sound optimistic that 28GHz equipment could be made to function in the 24.25GHz to 27.5GHz range, one of Europe's candidate 5G bands.

That said, the US and Asian operators that have made the most noise about 5G have also been its driving force so far, according to Gabriel Brown, a principal analyst at the Heavy Reading market-research business. "They are trying to get ahead of the market as a whole but that is pushing everyone else along," he said during a presentation at Light Reading's Executive Summit in Rome last month. (See 5G on Track but Fragmentation Still a Concern.)

Want to know more about 5G? Check out our dedicated 5G content channel
here on Light Reading.

There is no doubt that Europe's operators have been as active in 5G industry associations as players from other parts of the world. That engagement will be critical as a 5G standard comes to fruition. Yet Deutsche Telekom also expects findings from early trials to feed into the standardization process. If most pre-5G pilots take place in Asia and the US, will operators in those markets gain any kind of edge when it comes to actual 5G rollout?

Perhaps not. But it is hard to shake the sense that most of the 5G innovation is now taking place outside Europe. It is a far cry from the days of 2G and even 3G, when European companies were setting the pace on technology development. That might have little impact on the speed at which standardized 5G networks are deployed in different parts of the world, but it is a troubling sign for Europe's technology industry.

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

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About the Author(s)

Iain Morris

International Editor, Light Reading

Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).

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