2020: THE BEGINNING OF THE 5G ERA

In 2020, we will hear more and more about 5G – the next generation of broadband infrastructure with gigabit speeds – as according to the Commission's targets, this is the year when it is supposed to become commercially available in at least one big city in each EU Member State. Already in 2019, some countries started launching and experimenting with 5G pilots, but wider deployment is expected once the 5G standards and the dedicated 5G spectrum pioneer bands become available by the end of 2020. Given the enabling role that 5G plays in the digital transformation of our society and economy, it is paramount that the EU does not lose the opportunity to lead in the 5G global race.

A worldwide race to roll out 5G

There is a worldwide race to research, develop, and roll out 5G. Once it has been widely deployed between 2020 and 2025, 5G is expected to enable an array of new innovative services that will transform sectors such as manufacturing, energy, vehicle manufacturing and health. That is why in many parts of the world 5G is becoming a national priority for the broader digital transformation of the economy. Many countries have already started experimenting with pilots and small scale launches. In April 2019, South Korea became the first country to commercially launch 5G on a wider scale, and by December 2019, about 5 million Koreans had 5G phones. The largest commercial launch in 2019 took place in China, which deployed over 100 000 base stations in over 50 cities in November and is expected to reach 143 million 5G users in 2020. In fact, at this pace, many expect that China will dominate the global 5G market by 2025. The US and Japan will grow rapidly in 5G adoption, whereas the EU will lag behind them. From an industry perspective, two out of the five companies serving the 5G radio access network space are European: Ericsson and Nokia. According to some analysts, in a digital world increasingly dominated by Chinese and US companies, 5G is one of the few future markets where European suppliers are in a very good position to compete with these companies from the start.

The real 5G is yet to come

The path to 5G, including all the technical specifications and standards, represents the most complex evolution that the mobile industry has undertaken to date. Currently, 5G is in its first phase of implementation (i.e. 'non-standalone' (NSA), supported by existing long-term evolution (LTE) (4G) radio and core network infrastructure). However, 4G is starting to run out of capacity given the mobile data traffic explosion, and the move to standalone 5G is needed to cope with this trend. It will transport a huge amount of data much faster, reliably connect an extremely large number of devices and process very high volumes of data with minimal delay. As an example, certain types of real-time applications, such as remote surgery, could not be done with the current 4G technology due to lag and control delay. The first 5G-enabled human remote brain surgery took place in China last November, with doctor and patient over 2 400 km apart. According to the International Telecommunication Union (ITU), the standards supporting all 5G applications will be in place in 2020. Some telecom service providers prefer to go straight from 4G to standalone 5G, and are waiting until 5G coverage is established as operators still look to recoup 4G investments, since 5G deployment requires a lot of investment in infrastructure costs.

The EU approach

Given its importance for EU competitiveness, the European Commission aims to speed up 5G deployment, notably by updating EU legislation to increase 5G investments, by supporting the 5G EU action plan strategic initiative, and by co-financing 5G research and development within the 2021-2027 multiannual financial framework (MFF). The European Electronic Communications Code, which updated the previous EU telecom legislation, sets important framework conditions as regards 5G investment in the EU. In particular, Member States are required to make 5G pioneer bands available by the end of 2020, with investment certainty and predictability for at least 20 years. The EU 5G action plan also set out key targets to be achieved by Member States, including a common EU calendar for a coordinated 5G commercial launch in 2020 (in at last one major city in each Member State) and ensuring that all urban areas and major terrestrial transport paths have uninterrupted 5G coverage by 2025. It also supports co-funding research and development, including the launch of pan-European pilot demonstrators. According to the EU 5G observatory, at the end of September 2019, it was clear that Member States were heavily involved in 5G testing, with 165 trials reported, including 11 'digital cross-border corridors' with live tests of 5G for cooperative connected and automated mobility. Finally, the Commission recommendation adopted in March 2019 seeks a high level of cybersecurity of 5G networks across the EU, with a coordinated approach guided by the toolkit expected in early 2020. There are industry concerns about whether plans to keep 5G on track for a fully commercialised launch by 2020 will actually happen, given all the complexity involved at technical level and the investment required for spectrum licensing and infrastructure costs. The 5G business case is clear in dense urban areas, where demand is high, but not in rural areas. Therefore, not all EU consumers and businesses will benefit from 5G applications, creating a new type of digital divide. Next, there is the concern to create sufficient consumer and business demand for 5G, as the former might not be ready to pay for more expensive handsets and subscriptions, or the latter for the infrastructure costs and resources that are required for their digital transformation. Another key challenge to overcome is that of making 5G more energy efficient. With each new generation of mobile technology, the energy consumed by the network has grown significantly, as data traffic has continued to increase. In South Korea, since the 5G commercial launch, monthly data traffic per user has doubled compared to 4G. Although according to the industry, 5G is designed to deliver increased energy efficiency, the actual impact on the environment is yet to be assessed. In addition, cybersecurity concerns draw a lot of media attention. These are linked to the greater access of third-party suppliers to networks, and the total increase in the overall attack surface and potential entry points for attackers, as well as the degree of dependency on individual suppliers. Moreover, as 5G networks are increasingly based on software, they could also make it easier for hostile actors to maliciously insert 'back doors' into products and critical infrastructure. According to the Council, the legal and policy framework to which suppliers may be subject to in third countries should be considered. Other emerging issues such as health and safety aspects and ecological aspects will need to continue being explored during this decade, as a number of studies are ongoing and an increasing number of citizens, scientists and doctors are concerned about the potential harmful effects that 5G could have on human health and on the environment. During the 5G era that starts in 2020, we will see a revolution that will transform the world as we know it. We have to hope that the EU will not lose the opportunity to lead in the 5G global race, to foster growth and innovation in key sectors and industries, and to improve the quality of life for society as a whole.