Europe plots catch-up in global 5G race
2021 could be a do-or-die year for Europe’s efforts to catch up with China and the United States in rolling out super-fast fifth-generation (5G) telecoms networks.
The mission to introduce the technology, which ultimately promises internet speeds up to 20 times faster than today, could be crucial to how competitively the continent emerges from the economic ruins of the Covid-19 pandemic.
Mindful of this, the European Union is funnelling a fifth of its €750-billion ($914 billion) recovery fund to improve countries’ digital capabilities. European mobile operators have long been reluctant to start investing in 5G networks, which could support smart factories and self-driving cars, because of a lack of political clarity about whether they must accede to US demands to exclude leading equipment supplier Huawei and other Chinese vendors.
But encouraged by the EU financial commitment to the technology in this area, at a time when the US administration is changing, and fearful of falling further behind globally, the industry is preparing to plough ahead in 2021. “Europe is, unfortunately, behind,” Pekka Lundmark, chief executive of Finnish network equipment maker Nokia, told Reuters. But the rollout “is accelerating already and in 2021 I think it will gather more speed in most countries”.
Swedish equipment maker Ericsson forecasts Europe’s 5G coverage should grow from around 1% of mobile subscriptions across the continent in 2020, to 55% in western countries and 27% in central and eastern states over the next five years, underpinning a longed-for economic recovery.
Yet it is the mobile operators who must pay companies like Ericsson, Nokia and Huawei billions of dollars for the 5G equipment. The EU agreed its rescue package in July, and companies started drawing up digital plans.
“We spent the whole summer since the announcement working to set out tangible projects,” said Jose Maria Alvarez-Pallete, CEO of Spanish operator Telefonica. A European Commission spokeswoman said the first payments could be made in the summer of 2021. Among various digital projects, Telefonica calculates the funds could help cover all of Spain with fast fibre-optic Internet and extend standalone 5G - capable of giving the highest performance - to around 85% of the country by 2025.
Published in The Express Tribune, December 29th, 2020.
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