Europe needs 5G and billions in private investment

Brid-Aine Parnell

Thursday 20 October 2016

If the European Union (EU) fails to encourage business to invest in next-generation networks, new industries like the Internet of Things will struggle to get off the ground.

Denoting the proposed next major phase of mobile telecommunications standards, 5G (5th generation mobile networks or 5th generation wireless systems) can offer data rates of tens of megabits per second for tens of thousands of users, higher spectral and signalling efficiency, and reduced latency – which all translates to better, faster internet on mobile networks. Without it, new industries and innovations like the Internet of Things are unlikely to be able to get off the ground.

State of the Union

The EU has set its sights on 5G as the next-generation tech that’s going to ensure Europe can compete with the US and China. In Jean-Claude Juncker’s recent State of the Union address, the president of the European Commission pledged to install free Wi-Fi in public spaces across the EU within the next four years and to fully deploy 5G mobile networks by 2025, saying: “We need to be connected. Our economy needs it. People need it. And we have to invest in that connectivity now.”

Massive investment is needed to ensure high-gigabit connectivity in urban areas for schools, universities and digital economy businesses, as well as access to an internet speed of at least 100 Mbps – whether you’re in the city or the countryside – and 5G access.

Getting that investment should boost Europe-wide GDP by €910bn, Juncker said, and potentially create more than three million new jobs by 2025.

Encouraging business to invest billions

However, the EU won’t be able to achieve these goals without a substantial contribution from business. Most of the estimated €500bn required over the next 10 years will need to come from private sources and, in order to encourage that investment, Europe is proposing a new European Electronic Communications Code which will increase competition and use radio spectrum more uniformly across the continent.

The EU currently predicts there’s likely to be a €155bn shortfall in the private investment needed to meet these targets. And even if the Communications Code manages to encourage businesses to cover this, it still might not be enough to keep the EU competitive.

Catching up with the US and China

Guenther Oettinger, the European Commissioner for Digital Economy and Society, said at the European Alpbach conference in Austria last month that Europe needed investments of up to €700bn to catch up with the US and China.

He went on to say that if Europe can’t develop fibre-optic networks and 5G networks fast enough, “we will lose, because important technological applications will not be possible any longer in our industry”.

Next generation means more connections

While the exact definition of what will constitute a 5G network has been the subject of some debate, it’s clear that simply getting faster is not going to be enough. These networks will need to be able to handle more simultaneous connections and have better coverage.

The number of mobile phones, tablets and computers per square metre in dense urban areas means 4G is struggling to keep up. And when you add a whole array of devices linked to the Internet of Things, from fridges to cars, the number of connections will skyrocket.

Europe will need 5G networks and it needs them to be every bit as good and as well-financed as those in the US and China – or it risks being left behind.

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