“Europe is far from meeting its digital decade connectivity goals and currently lags far behind other developed regions in digital connectivity and digital provision for businesses and consumers.” The warning was issued by Calvin Baier, chief economist at GSMA Intelligence, at a recent dinner hosted by Congress.
Europe was once a connected powerhouse, but recent developments in network technology have caused it to lag behind the rest of the world. “The connectivity ecosystem is European and we led it,” Vodafone Group Chief Economist Ben Leshner reminded the audience. After the creation of 3G, most of its early use took place in Europe. However, as subsequent generations of mobile technology were introduced, this percentage rapidly decreased. Of the first 500 million users of 4G technology, only 11% were from the EU, and we saw the same with the launch of 5G. Of his first 500 million users of 5G, only 4% were from the EU, while 71% were from China. Scaling this number up to his original 100 billion users, the situation in the EU is equally dire, with only 6% of users of this technology coming from within the region. There is still a lot of room for improvement in these numbers.
Hopes for Europe’s Digital Decade goal of full 5G coverage across Europe by 2030 look equally bleak. According to the European Commission’s recently released State of the Digital Decade report, 65% of densely populated areas are currently not covered by 5G. This poses a fundamental problem for Europe. While 4G was the technology that fueled audience consumption habits and the adoption of the app economy, 5G is critical for critical infrastructure and Europe’s industry. The connected nature of modern technology means that applications as diverse as traffic lights and medical technology will increasingly rely on 5G connectivity to function. Without this technology, European industry would fall behind at every level. Businesses of all sizes, from small businesses to large enterprises, are at risk of being left behind.
Availability of a qualified workforce appears to be one of the biggest challenges in all areas of European policy. We need more experts and experts, so we need to invest in this.
Member of Parliament Tsvetelina Penkova (EPP, Bulgaria)
The slow rollout of 5G in Europe also raises questions about competition. Due to a lack of innovation capacity, most of the key technologies for 5G in Europe are provided by companies outside the region. Europe once boasted industry-leading mobile device brands such as Nokia and Ericsson during the creation of mobile networks. Their devices and infrastructure have enabled Europe to lead the spread of mobile technology around the world. However, with the rollout of 5G, this advantage has faded and other regions of the world have come to the forefront of technological innovation.
This has already made Europe more dependent on foreign countries. If we fall behind in 5G, we risk increasing this dependency even further. The European Union, a 27-nation strong network, is a power hub for innovation and we must lead the way, not chase competitors around the world. The European Commission has already launched a strong initiative on competition, and network technology is the natural next area of focus for Europe as it strengthens its position as a global innovation powerhouse.
As with many issues facing Europe, a lack of investment capacity is holding the industry back, but finding funding is a challenge. “We need to be creative in how we seek investment,” Zorinho stressed at the dinner. However, while doing this, Europe must be careful not to sacrifice any more of its strategic autonomy. Karen Melchior MP has issued a warning about the current state of funding in the telecommunications industry. “When you look at investments in telecommunications by foreign companies and equity funds, I think it’s very worrying,” Melchior argued. This investment has been needed for many years, but services to consumers have not improved. He added that with further investment, carriers have an obligation to provide quality services in order for Europe to catch up.
Policy has been cited as a key driver for changing the course of 5G technology so that Europeans can benefit from it. “We need policies and regulations that encourage innovation and invest in fair competition,” explained organizer Rep. Penkova. Looking ahead, Penkova added that with the upcoming legislation, the European Parliament “will aim to benefit both citizens and businesses to ensure that Europe remains at the forefront of digital innovation.” .
The need for higher education and skills was also highlighted as an area for improvement. According to Penkova, the special nature of mobile technology is a challenge that Europe needs to address. “A qualified workforce seems to be one of the biggest challenges across European policy. We need more professionals and specialists, so we need to invest in this,” she argued, adding that Europe’s He added that while the skills agenda is promising in this area, acceleration is needed to quickly respond to the impact of 5G.
A fundamental review of the regulations surrounding mobile network technology was widely recognized as critical to achieving a better connected Europe. Europe’s failures in both 4G and 5G technologies are a reminder that existing policies are not fit for purpose and require significant change.
Steps in the right direction have already been taken. The European Commission will soon publish a white paper on the potential of a digital networks law that could address the investment gap in Europe’s telecommunications sector and make European telecommunications more competitive on the world stage. The discussion shared the hope that the European Parliament would act quickly on this important issue for Europe’s short- and long-term future.
The race isn’t over yet, but the clock is ticking.
Ben Leshner, Chief Economist, Vodafone Group
Despite the negative predictions regarding the introduction of 5G in Europe, hope was not lost among participants. Ben Leshner concluded that “the race is not over, but the clock is ticking,” but added, “If we don’t change now, we will lose the race and rely on non-European actors.” Mobile data traffic in Europe is set to nearly triple over the next five years due to increased 4G migration and improvements in 5G coverage and capacity in Central and Eastern Europe, according to the GSMA’s latest research report. The European connectivity challenge has become an important topic for the EU. future. To regain lost ground in the mobile network transition, Europe and its policymakers must act before it is too late.
Read GSMA’s latest European Mobile Economy Report.
In cooperation with
This article was produced in partnership with GSMA.
