Research paints gloomy 5G picture for Europe

New findings from research consultancy CCS Insight forecast Europe lagging behind the US and Asia as countries look towards the future 5G world.

While the 5G promise has been a slow burner so far, this was largely expected. The telco industry is excellent at overhyping a technology in its infancy, only for the world to be impatient at what should be considered normal progress. That said, the emergence of the 3GPP NR standards at the end of 2017 gave a jolt of life to the old-timers falling asleep in the board rooms.

2018 has begun with a boom, with numerous companies signing agreements on standards, trials, deployment of chipsets and infrastructure, while several operators committed to 5G deployments towards the end of this year and beginning of 2019. Unfortunately for us living in Europe, those commitments have come from the US and Asia. We might have to watch the glory of bufferless cat videos longingly from afar for the first few years.

“The industry might be struggling to establish the business models for investment in 5G, but this isn’t stopping leading operators battling for bragging rights to launch the first networks,” said Kester Mann of CCS Insight. “Competitive forces and the need for capacity are the leading drivers of early deployment, although we caution this could set unrealistic expectations for initial network capability.”

CCS forecasts that while the early launches might be in the US, Korea and Japan, China should storm to the front of the 5G pack. Estimates predict 5G in the country would hit 100 million connections in 2021 before passing 1 billion in 2025. Despite most other markets having launched commercial services by 2025, China will still account for nearly four in every 10 global 5G connections.

The first connections are likely to come in the US however, with the three main operators (and Sprint) fighting for the bragging rights. Verizon has promised commercial 5G services in Sacramento with Samsung during the second half of the year, Dallas, Atlanta and Waco have hit the AT&T 5G jackpot with the end of 2018 as a deadline, while T-Mobile US has been preaching it will be the first to have a nationwide 5G network.

Western Europe is not looking as promising though. The region is expected to pass 100 million connections in early 2023, though Telia and Telecom Italia are showing a bit more appetite than the rest of the pack. CCS notes that aside from these minor bright spots, the region seems further adrift from the leaders than ever before. Perhaps this is down to the search for the elusive 5G business case.

While operators in the US and Asia seem a bit more adventurous in their quest for 5G, there does seem to be a ‘build it and they will come’ attitude, while European are seemingly much more risk adverse. Last year we watched both BT and Orange at a Huawei conference say that the monetization would of 5G would have to be sorted out before commitments would be made, though this is a very lethargic and dated.

Some of the services and products which are now available on 4G networks would not have been imaginable five years ago, but that is the way innovation works. The technologists need the tools to be able to create and drive innovation. A 5G network is one of those tools for the next wave of digital evolution. Searching and waiting for the business case to justify 5G investments will force Western Europe into the second tier of the global economic rankings.