ETNO on 5G: “This is an opportunity for Europe to claim a lead in digital leadership”
When it comes to the economic potential of 5G, it can be difficult to separate the fact from the fiction.
It often appears that two schools of thought are developing; on the one hand, some suggest that the transformative potential of 5G will yield incredible economic rewards – Vodafone, for example, recently published a study that suggested 5G would be worth an enormous £150 billion to the UK economy over the next decade. On the other hand, some commentators suggest that the technology is vastly overhyped, with its proliferation and impact being much more gradual.
So, what is the reality here?
According to the European Telecommunications Network Operators’ Association (ETNO)’s Director of Regulatory Affairs, Maarit Palovirta, the coronavirus pandemic may actually help clarify the potential of the nascent technology. With connectivity now more important than ever in our daily lives, stakeholders’ mindsets are beginning to evolve, being more open to the transformative power of the new technology.
“We are all in a position now where we can say, yes, we believe that 5G – and actually connectivity in general – will play a key role in the economic development in Europe and, more specifically, in the recovery from the COVID-19 crisis,” said Palovirta. “5G can be a major economic enabler for Europe, but we need to invest.”
Part of what separates 5G from the previous generation of mobile technology is its opening up of new verticals for operators. 5G is being celebrated as helping to bring about the fourth industrial revolution – often called Industry 4.0 – where major industries from manufacturing to utilities will benefit from improved efficiencies derived from the IoT, AI, machine learning, and automation. As a result, this is an interesting time for operators, who must begin to more closely engage with industries to deliver bespoke services or else be usurped by savvy third parties who will take advantage of the improved connectivity the operators provide.
“These new verticals, be it a port or a mine, for example, are very complex environments,” said Palovirta. “For the operators, this is not historically their playing field – they don’t have the intimate knowledge of what goes on in a specific industry. Getting to know one another like that takes time, but it’s an investment. It’s an evolution of the business model for both operators and enterprises.”
This idea of holistic engagement and cooperation extends throughout every aspect of the 5G community, from vendors to operators to policymakers, and indeed to the customers themselves. If the new technology is to realise its potential, there must be a close collaboration between all stakeholders.
“It’s about an ecosystem,” explained Palovirta. “It’s not enough that in a big city an operator can simply deploy a 5G network and launch it commercially. For example, we will need consumers to have the right device to receive the service, and have enough demand to be willing to pay for it.”
But delivering 5G in a cost-effective manner for customers is no easy task. Deploying the required infrastructure is notoriously expensive, especially in Europe where many operators are forced to ‘go it alone’ in their small home markets. While some operators around the continent are moving towards various forms of collaboration to offset these initial costs, such as RAN sharing agreements, regulators can still pose a major hurdle.
“Network sharing is a very practical way to reduce expenditure, but there’s also a lot of potential for other forms of horizontal partnership, like developing services together. If something like the so-called ‘killer app’ could be developed by a group of players and standardised in such a way that it could be launched all over Europe, this would be very powerful,” said Palovirta. “We need to be a bit more lenient in allowing operators to work together in innovative ways.”
Furthermore, policymakers are now seeing an increasing political influence on their decision makers. The elephant in the room here is, of course, the ongoing geopolitical clash between China and the US, the fallout of which is threatening to create a lasting schism when it comes to 5G. For ETNO, the highest importance should be placed on ensuring that competition can remain unhindered, to ensure the best service for operators’ customers.
“From our position working with operators, the most important thing is to provide customers with a service that is secure, reasonably priced, resilient and of high quality. For that to happen and to continue, you really need a global, open vendor equipment market, which is needed for operators to be able to pursue a multi-vendor strategy,” said Palovirta.
Equally at the heart of this competitive environment is the support of global, unified standards. Once again, it comes down to effective dialogue – companies working from differing standards cannot cleanly compete or integrate with one another, fragmenting the ecosystem and driving up costs for operators.
“Standardisation is increasing in importance now. Global standards are being more and more recognised by policy makers as being important,” explained Palovirta. “From an operator’s point of view, especially those who operate in numerous markets around the world, fragmented standards will add cost and complexity. It might even make operations simply not worthwhile in certain areas, so it’s really the last thing operators want to see.”
It is clear that 5G has enormous potential, but the trick, as always, will be unlocking that potential in a timely and effective manner. The cornerstones of dialogue, collaboration, and innovation are already in place, but there are also still significant roadblocks, from politics to logistics, which need to be surmounted. If Europe can navigate these choppy waters well, Palovirta believes 5G can offer the continent a huge opportunity of international proportions.
“Our industry is evolving with 5G playing a key role in that transformation–not only in terms of technology but also in telcos’ business models,” said Palovirta. “This is an opportunity for Europe to claim a lead in digital leadership.”
Maarit Palovirta featured as a panellist on Total Telecom’s latest webinar on the economic future of 5G. Watch the full webinar for free here.
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