Europe takes measured approach to 5G, driven by ROI concerns

European operators may be more concerned with getting the maximum value for money from their 3G and 4G networks than rushing to roll out 5G

The need to extract the maximum possible return on investment (ROI) from 3G and 4G mobile network infrastructure will hold back the development of 5G mobile networks in Europe, according to a report from tech research and consulting firm GlobalData Technology.

The report – 5G technology overview, use cases and demand forecast: addressing latency, reliability and network density opens up new business opportunities – claimed that while 5G networks will indeed be on the way to becoming mainstream in 2020, deployment in Europe will lag significantly behind Asia and the US.

By 2022, it said, over half of all mobile subscriptions will be 5G-capable in hyper-advanced markets such as South Korea, but just 7% in Europe.

“Some mobile markets, such as South Korea and Japan, are well-suited to 5G, with widespread fibre availability, small cell deployments, advanced 4G networks and supportive regulators,” said GlobalData’s senior manager for Europe, Upin Dattani.

“In Europe, operators are keen to obtain a good return on the substantial capital expenditure made in 3G and 4G networks. While European operators see benefits from more reliable and responsive next-generation networks, technological progress will likely be at a more measured pace.”

“5G roll-outs will take years to complete; no region or country has won or lost the race to 5G yet”
Peter Jarich, GlobalData Technology

A number of pre-standard 5G network trials are being conducted around the world this year – including in the UK, where infrastructure supplier Arqiva is shortly to embark on a test of fixed wireless access (FWA) technology.

GlobalData said that in 2018, a few standardised commercial services will commence – most likely in South Korea as a showcase during the upcoming Olympic Winter Games.

Although it will likely lag behind the Koreans, the UK also has ambitious plans to have a fully functioning 5G trial network up and running in the early part of 2018.

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Yesterday (6 July 2017), the government announced it had awarded a grant of £16m – drawn from a pot of £740m set aside for digital infrastructure by chancellor Philip Hammond – to the Universities of Bristol and Surrey, and King’s College London (KCL), to research, design and build the test network.

“Hopes are running high for the potential of 5G to truly transform mobile business models, and tap new revenue opportunities moving beyond consumers and into diverse digital industries. The implications go beyond any individual operator to impact national and regional competitiveness,” said Peter Jarich, chief analyst at GlobalData.

“Despite this, for all the efforts to fast-track early 5G deployments, it’s important to recognise that 5G roll-outs will take years to complete; no region or country has won or lost the race to 5G yet.”

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