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Operators and vendors agree that Europe is falling behind in 5G

Mobile natives are getting restless

Comment Ericsson and Nokia are united on one thing, and that is Europe's failure to take a lead on 5G, a view which is supported by operators too.

In a joint statement, six operator and technology associations criticized European Union lawmakers for a "timid approach that will do little to improve Europe's chances of success" and demanded a new regulatory environment with 5G investment and innovation at its heart.

The signatories were:

  • COCIR (European Coordination Committee of the Radiological, Electromedical and Healthcare IT industry)
  • Cable Europe
  • Developers Alliance
  • DigitalEurope
  • ETNO – (European Telecommunications Network Operators Association)
  • GSMA Europe

Meanwhile, Nokia’s CTO, Hossein Moiin, said European operators were already lagging behind their peers in Asia and the US in 5G investment. He said he was "not optimistic" about the region’s 5G outlook, and also blamed the regulators, saying they did not have "investor-friendly" policies, and made it hard for MNOs to take risks.

And Ericsson said the Asia-Pacific region would beat Europe in deploying 5G, and would be ahead on 5G mobile subscriptions in 2022 as a result. According to the firm's latest Mobility Report, 10% of all APAC mobile subscriptions will be on 5G by 2022, but that figure will be highest in North America, where it could reach 25% in the same year.

"APAC will be ahead of Europe when it comes to 5G," said Emilio Romeo, head of Ericsson Australia and New Zealand. By contrast, EMEA and Latin America are forecast to have fewer than 5% of their mobile users on 5G by the end of 2022. The groups expressed concern that current discussions in the EU Parliament and Council about the proposed Electronic Communications Code (ECC) and the ePrivacy Regulation make “ the outlook for innovators appear quite grim ”.

This comes two weeks after several European telco CEOs signed an open letter warning that proposed amendments to the ECC and ePrivacy regulation could put future investment at risk. The ECC, unveiled by the European Commission in September 2016, proposes 25-year spectrum licences with strict usage rules to increase spectrum efficiency; and EU-wide coordination in assigning frequencies, in order to improve mobile coverage across the bloc.

However, critics say long licences make it harder for allocations to keep pace with technology advances. "5G is one of the engines of European innovation, a tool to ensure improved consumer experience across industries, as well as a crucial enabler of the continent's competitiveness," the group said, calling on the EU to "maintain a high level of ambition to ensure that the strategic 5G objectives remain at the core of Europe's digital reforms ”.

The criticisms of EU 5G policy mount up, despite the major investments made in R&D within the EU-backed 5G PPP program, and by individual operators in the region. Earlier this year, several of Europe's biggest operators were reported to have told the Commission that its 5G action plan was a "pipe dream ”.

The 5G Manifesto has been sidelined

Last July, they issued a ‘Manifesto for timely deployment of 5G in Europe’, and many of the current statements hark back to that, and question why it has not been acted upon. How- ever, while there are genuine concerns over over-prescriptive spectrum policy, at a time when the world is moving towards dynamic usage and flexible sharing, the Manifesto missed the point on many levels and is not necessarily a good starting point for a new approach in Europe.

Indeed, the Manifesto demonstrated the gap between mobile operators’ thinking about 5G, and how future networks will really be deployed for disruptive effect. While Europe s leading MNOs were veiling pleas for net neutrality special treatment with promises of 5G build-out, Facebook was announcing an open source approach to the mobile network, OpenCellular – part of a wider trend which could rip apart the network cost base and the operators’ and 3GPP vendors’ cosy world. The Manifesto was not a vision of a whole new way of building networks and delivering services. It was basically a negotiating ploy to mitigate net neutrality rules. The central argument was that strict neutrality rules, if applied to MNOs, would limit their ability or motivation to invest in 5G. This reflected several key preoccupations of the MNOs:

  • Can they secure return on investment on 5G capacity investments when much of the service revenue goes to over-the-top providers?
  • Can they avoid being just bit-pipes for those providers?
  • How can they maintain their connection or data fees in the IoT world?

All these are the wrong questions when it comes to the next generation of mobile internet services, and they explain why there is deep mistrust of the MNOs in many of the vertical sectors which hope to harness 5G to become always-connected.

In reality, those three questions are already being answered, by a new set of companies which are coming from the IT and over-the- top worlds into the heart of the mobile net- work. Those need to be taken into account in EU policy too – and too often they are side-lined.

So far, very few MNOs are really driving these changes, despite lip service to Cloud-RAN. Even where they are investing in radical architectures, they are stuck in old approaches to ROI on those build-outs, erecting garden walls to keep out unlicensed spectrum operators, cablecos or OTT providers; talking about NB-IoT service fees based on similar models to those for consumers; worrying about neutrality.

The 5G Manifesto was a flawed document

The 5G Manifesto, presented to Digital Economy Commissioner Gunther Oettinger last July by a group of 17 leading operators and vendors, was meant to be a roadmap to accelerate testing and deployment of 5G in order to get new services to citizens and to put Europe back in the cellular driving seat.

The operators – which included Deutsche Telekom, BT, Telecom Italia, Vodafone, Orange, Telefonica and others, as well as the large vendors Ericsson and Nokia – would commit to cooperating on multi-country trials from 2017; to mounting user trials as soon as the standards are finalized; and to deploying a commercial network in at least one city per EU country by 2020.

On the reasonable side, it called for coordinated action on standards, spectrum, network deployment and ecosystem development across different verticals. But beyond that, it descended into the same kind of lobbying the operators have been doing for a decade. There were significant strings attached to the operators' commitments – not just the call for more spectrum and lighter touch regulation, but (the real agenda) demands for concessions on net neutrality. The draft neutrality guidelines were “ excessively prescriptive ”, warned the MNOs, and would be a barrier to 5G investment and the provision of vertical market services.

Overall, the thinly veiled bribes in the Manifesto just confirmed that, when thinking about 5G, most MNOs remain preoccupied with their traditional concerns – protecting their exclusive network and spectrum rights, competing in the same old way. So there was a list of caveats attached to the roadmap. One, the industry wanted the EU’s support to ensure appropriate spectrum is available, with harmonized licensing of the 700 MHz, 3.4 - 3.8 GHz and higher frequency bands above 24 GHz, across the EU by 2020. That would necessitate a unified EU position at the World Radiocommunication Conference in 2019.

Two, the operators wanted financial support for large scale 5G demonstrations, which they say would encourage vertical industries to get involved in trials. Three, the operators thought the Action Plan was dependent on the EU taking a light regulatory touch, to make it easier for essential enablers like spectrum, fiber and small cell sites to be made available.

Copyright © 2017, Wireless Watch

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