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Policy action needed for EU to achieve 5G goals

Report finds that economic contribution of mobile continues to expand in Europe, but market dynamics are impeding 5G’s progress throughout the region and further regulation may be needed to hit digital goals

Mobile technologies and services have continued their strong contribution to Europe’s economy over the past 12 months, adding €757bn to European GDP in 2021, but Europe’s ambitious Digital Decade goals remain threatened by slower 5G roll-out compared with competitor markets, a report by mobile trade association GSMA has warned.

In 2021, the European Commission (EC) set out its vision for Europe’s digital transformation by 2030 in the Digital Decade framework. The strategy promised to deliver tangible benefits for EU economies through the development of digital skills, digital transformation of business, sustainable digital infrastructures and the digitisation of public services. As economies digitise, the EC believes the lynchpin to ensuring success is the acceleration of 5G in Europe for traditional industry and manufacturing to remain competitive.

The 2022 Mobile economy report Europe showed that at the end of June 2022, 108 operators in 34 markets across Europe had launched commercial 5G services, with consumer take-up continuing to grow steadily, reaching 6% of the mobile customer base. In terms of territories, Norway leads in adoption of the technology, with 16% now using 5G, but positive momentum is also evident in Switzerland (14%), Finland (13%), the UK (11%) and Germany (10%).

The report predicted that by 2025, the average adoption of 5G across Europe will hit 44%, with the UK and Germany expected to have the highest 5G adoption rates in Europe at 61% and 59%, respectively.

The pace of 5G coverage expansion across Europe will be a key factor in the transition from 4G to 5G – an important step in the achievement of Europe’s Digital Decade goals.

However, tough market conditions are leaving Europe trailing its global peers. Even though Europe’s 5G growth is rapid, it is being outpaced by other world economies.

For example, South Korea is expected to hit 73% in the same time period, while Japan and the US are both likely to achieve 68% adoption. Although 5G network coverage in Europe will rise to 70% in 2025 (from 47% in 2021), nearly one-third of the population will remain without 5G coverage. This compares with 2% or less in South Korea and the US.

The report also examined how European operators are progressing with the roll-out of standalone (SA) 5G networks, noting that 5G SA services in Europe are now available in Finland, Germany and Italy, with further deployments expected in the next few years. The GSMA report noted that the added functionality enabled by 5G SA is key to delivering on the 5G promise of fully supporting advanced 5G use cases.

European operators were also found to be at the forefront of cutting-edge, energy-efficient technologies and the use of renewables, with many already reaching 100% renewable electricity use across their footprints, powering their network infrastructure, datacentres and other sites.

However, the report concluded that to meet the EC’s 2030 goals, it was vital for policymakers to create the right conditions for private infrastructure investment, network modernisation and digital innovation.

“Europe is adopting 5G faster than ever before, but greater focus on creating the right market conditions for infrastructure investment is needed to keep pace with other world markets,” said Daniel Pataki, GSMA vice-president for policy and regulation, and head of Europe. “This should include the implementation of the principle of fair contribution to network costs.”

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