Monday, January 8, 2018

Will Europe regain mobile leadership with 5G?

by James E. Carroll

At the end of November, Verizon confirmed plans to launch 5G residential service beginning in Sacramento, California. By the end of 2018, Verizon should have commercial 5G fixed line residential services running in half a dozen cities. The timing is a little bit slower than what was suggested at Mobile World Congress this year, but it is is a very aggressive rollout plan. AT&T has been testing fixed line 5G services in several markets too, and we can expect a similar early entrance into the 5G commercial arena. So, 5G will be coming to U.S. markets over the next 18 months with a credible use case and business plan.

Even before these two operators stake their claims of being the 5G deployment leader, we should expect the Korean operators to showcase 5G small cell technology at the PyeongChang 2018 Winter Olympics, although this event – assuming it is not disrupted­­­ by the threat of war – perhaps will be more of a public demonstration rather than a commercial deployment. ­There are, of course, many publicity events for 5G occurring around the globe. As previously reported in this journal, NTT DOCOMO has various 5G experiments underway in its home market, including 5G for autonomous vehicles. This application could turn out to be one of the best use cases for 5G given the need for extremely low latency when navigating a car in city traffic. So, Korea and Japan are the likely first movers with 5G.

The question has been raised by many: will Europe regain its leadership in mobile technologies with 5G? This topic was the subject of a meeting of EU Telecom ministers held last week in Tallinn, Estonia. The outcome of the meeting was the adoption of a 5G action plan -- or roadmap – aimed at spurring widespread deployment of 5G in EU nations by 2025. Naturally, there is no budget assigned to make it happen – that will be up to Service Providers to incorporate into their CAPEX plans. The roadmap is simply the next steps that the EU plans to take to harmonise spectrum bands for 5G.

"The 5G roadmap lays out major activities and their time frame. With the roadmap we agreed on plans for harmonising the technical use and purpose of 5G spectrum and their allocation to telecommunications operators. It is no secret that Digital Europe is a priority for the Estonian presidency. However, a digital society cannot be created without 5G networks," commented minister Urve Palo, Minister for Entrepreneurship and Information Technology for Estonia. "By the year 2025, we want to see the presence of 5G connectivity in large cities and along major transport routes of every European country. 5G networks are needed both for citizens and the devices that need reliable and high-speed Internet access to cope with increasingly large quantities of data.”

Some catching up will be required

A new report from 5G Americas, which is a trade association, finds that North America continues to hold a lead over other regions in terms of overall LTE adoption to the greatest percentage of users. Citing data from Ovum, 5G Americas reports that the number of active LTE connections worldwide passed 2.5 billion as of the end of the third quarter of 2017. This is out of a total of 7.8 billion total cellular connections worldwide. The report states that North America achieved 341 million LTE subscriptions by the end of September 2017 “with some of the highest penetration rates, most extensive coverage and largest market share for LTE in the world.” 

The LTE penetration rate for North America was 94 percent in the third quarter, with 341 million connections compared to the population of 362 million in North America. In comparison, Western Europe was found to have a 57 percent penetration for LTE. Given that LTE commercial service rollouts began in 2011, it is somewhat puzzling that nearly seven years later, such a significant percent of the population in Western Europe either hasn’t gotten around to updating to a 4G-enabled phone, or simply hasn’t been interested in subscribing to an LTE plan. The reason most often stated for this slow adoption has been cost. Data plans in Europe are simply costlier and more restrictive that in other developed markets. As we’ve seen recently in India with the Reliance JIO 4G launch, if unlimited data is offered at the right price, consumers will respond in droves.

Highlights of the 5G Americas report (data from Ovum)

  • There was an increase of 838 million new LTE subscriptions in one year ending September 2017.

  • Global market share for LTE achieved 32 percent at the end of the third quarter of 2017, an increase of almost 10 percentage points in one year.

  • As of mid-November, there were 562 commercial LTE deployments worldwide, while 211 of those operators have already evolved to LTE-Advanced (TeleGeography).

  • In Oceania, Eastern and Southeastern Asia, LTE penetration is at 58 percent

  • In Western Europe, LTE penetration is at 57 percent penetration.

  • Latin America nearly doubled LTE connections to 179 million from 99 million year-over-year at 3Q 2017 increasing by 80 percent.  LTE’s market share increased from 14 percent to 26 percent in twelve months out of a total mobile subscription base of 691 million.

  • As of mid-November, there were 108 commercial LTE networks across the Latin America and the Caribbean region of which 20 are LTE-Advanced deployments with Carrier Aggregation (TeleGeography).

    See also