How Brussels botched Europe’s 5G rollout

Bureaucrats in Brussels have long tried to sell Europe as the natural home of 5G.

“5G is becoming a concerted global effort in which Europe is playing a leading role,” the bloc’s then-digital commissioner Günther Oettinger told telecoms executives at Mobile World Congress in Barcelona in 2015.

Yet almost a decade later, that claim looks unfounded. While the US and Asia have made significant strides with their new mobile networks, Europe is a global laggard.

“Europe is drastically falling behind on 5G,” says Joakim Reiter, Vodafone’s chief external and corporate affairs officer. “We’re getting beaten by some middle-income countries that we normally would not consider to be competitors in this space of technology and innovation.”

Bangkok has a faster 5G network than the best-performing European capital Helsinki, while Guatemala has a better network than Sweden.

Executives argue that fixing this problem is not simply a matter of improving mobile connectivity for consumers but ensuring that Europe has the infrastructure it needs to underpin an increasingly digital economy.

“It’s important because it will influence whether we have manufacturing jobs in the future in Europe or not,” says Reiter. “That’s why people need to care now.”

European network operators have lacked the firepower to invest the billions needed to deploy cutting-edge infrastructure.

Many in the industry place the blame at the door of the European Commission, which stands accused of pursuing an overzealous approach to regulation at the expense of innovation.

Now, with EU elections looming, executives are warning that the bloc’s sluggish shift to a digital economy could have long-lasting repercussions.

Just 4pc of the first 500 million users of 5G globally came from the EU, compared to 71pc from China, according to data from the GSMA.

This lacklustre performance can in part be blamed on muted enthusiasm for 5G, which lacks the transformative consumer impact offered by previous mobile network upgrades.

“We know that one of the main problems for a slow rollout is the lack of a consumer use case for 5G at this point,” says Matthew Howett, founder and chief executive of Assembly Research.

Mobile bosses have instead trumpeted the benefits of 5G in underpinning future technologies ranging from smart manufacturing to connected homes and self-driving cars.

Rival superpowers seem to have cottoned on to this opportunity. However, there is frustration across the industry that European policymakers have not been as supportive as many other nations.

“The Americans are much more focused on driving innovation,” says one executive. “In Europe, we have a tendency to go for innovation by permission, and I think that’s an intellectual difference.”

Europe’s telecoms market is a patchwork of 27 markets, with little consistency between different network infrastructure, spectrum management and regulations.

Moreover, a dogmatic desire for competition has led to a highly fragmented market. Last year Europe had 45 large mobile network operators with more than 500,000 customers, compared to eight in the US, four in both China and Japan, and three in South Korea, according to industry group ETNO.

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