Europe’s 5G distinction: Unlimited information without a huge additional charge

We can thank Europe for constructing much of what made the modern-day cellphone. Companies like Nokia and Ericsson constructed the very first smash hit gadgets, and the continent provided us GSM, the network innovation utilized all over the world.

With the current generation in mobile information speeds, however, Europe isn’t leading, it’s following. Over the previous year the United States and South Korea have actually beat Europe to the launch of 5G, which is anticipated to open a brand-new chapter in mobile experiences, such as streaming 4K video on the go, less network blockage in hectic town hall and assistance for brand-new innovations such as self-governing automobiles.

But even as a fan, Europe is host to an increasingly competitive environment of stakeholders all wishing to show they can release 5G initially. Obstacles such as spectrum auctions in some nations stay, however the area’s networks have actually revealed that when required, they can accelerate their own strategies to capture up and equal market leaders all over the world.

State of play

Even considering that Mobile World Congress in Barcelona in February, Europe’s networks have actually made huge development in executing 5G. In April, Switzerland’s Swisscom ended up being the very first European provider to turn on its 5G service, with the UK’s EE following in May. Since then, Vodafone has actually likewise switched on its 5G network, not simply in the UK, however likewise in Spain and Italy, with the network guaranteeing 5G roaming throughout all 3 nations, and in Germany, this summer season.

Sure, protection is irregular today and speed test outcomes are blended, as CNET’s tests around the UK — and all over the world — have actually discovered, however Europe’s 5G rollout is indisputably underway.

One pattern up until now amongst European networks is the bundling of unrestricted information with additional product and services, such as house broadband, or unrestricted information booked particularly for video gaming or video streaming. The United States has actually been doing this, too — however most European networks aren’t asking clients to pay a huge premium for updating from 4G to 5G.

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In the UK, Vodafone introduced a new strategy for unlimited data with plan prices based on speed. People who primarily use social media can opt for a 2Mbps plan for £23 per month, people who want to stream video can choose a £26 10Mbps plan and there’s also a £30 unrestricted option for the most demanding users.

As has been the case with previous upgrades to faster data speeds, such as 3G to 4G, consumption will likely rise with the adoption of 5G, making unlimited packages all the more necessary and attractive for consumers.

Playing catch-up

Europe’s adoption of 5G mere months after the US is a marked improvement from when 4G was introduced in 2010 and Europe was a year (or more in some places) behind. “One big difference from before is that Europe is driving 5G at exactly the same time — we don’t see a gap as we saw with 4G,” said Qualcomm President Cristiano Amon in an interview at the launch of EE’s 5G network in May.

Over the past six months, Europe has also caught up on fixed wireless access, according to Luca Schiavoni, senior analyst at Research Assembly. This provides a wireless alternative to fiber and other fixed-line broadband services — using 5G spectrum. UK operator Three is even launching fixed wireless access ahead of its mobile network.

Amon said the biggest difference between the US and Europe this time around is that the US carriers are using midband and millimeter wave spectrum for 5G from the outset. In Europe, the focus so far has been almost entirely on using midband, which brings slightly slower speeds, but which works over long distances. That leaves the majority of countries to hold their millimeter wave spectrum auctions later. “I expect that to be happening within the coming quarters, and then millimeter wave will come to Europe as well,” Schiavoni said.

The price of speed

The biggest obstacles holding back rollout of 5G in Europe are the spectrum auctions, which in some countries have cost the networks far more than they were hoping to spend. Carriers buy spectrum for their 5G networks from national governments, but some countries — realizing the sale of spectrum has the potential to bring in billions of euros — allow the auctions to get out of control.

“This is worrying, because costly acquisitions of spectrum licenses can easily hinder deployment plans,” said Schiavoni. “The risk is that deployment faces delays, and/or its extra cost is passed on to the consumer. Either way, it’s hardly a positive outcome for 5G in Europe.”

Germany in particular struggled with its drawn-out and pricey auction, which finally concluded last month after 497 rounds of bidding. It raised a total of 6.55 billion euros ($7.3 billion) in total — an almost identical amount to Italy’s 2018 spectrum auction. Carriers in the two countries have paid more for spectrum than any other nation in Europe. For context, the UK raised £1.4 billion ($1.8 billion) in its first round of 5G spectrum auctions in 2018.

The big winner of Germany’s auction was Deutsche Telekom, but after spending over 2 billions euros to secure 5G spectrum, the result didn’t necessarily feel like a victory for the network.

“The auction leaves a bitter aftertaste,” CEO Dirk Woessner said in a statement released after the auction. “The result is a dampener on our network buildout. Spectrum, again, is much more expensive in Germany than elsewhere. Network operators now lack the money to expand their networks.”

The next big challenge

Along with building out a 5G infrastructure (the network requires new towers) and its related challenges — security, in particular — the next big mountain for European carriers to climb is customer adoption. A small percentage of early adopters will come on board this year, but there won’t be a big rush to upgrade for a variety of reasons — price, customers being locked into existing contracts and no 5G iPhone in the foreseeable future among them. Analysts at CCS Insight predict that in the UK, 50 percent of mobile users will be on 5G by 2025.

Speed will be the big reason most people choose to upgrade, but as more people make the jump to 5G, we’ll be able to see if the next-gen networks can deliver on the promise of increased capacity. 

We’ll also start to see new use cases for 5G being tested beyond people having faster mobile data speeds. Europe looks like it will be leaning  heavily on 5G for communication between self-driving cars, for example, and the UK is investing £40 million in manufacturing and logistics trials.

In the meantime, it’s up to the networks to prove to people why they should be excited about upgrading to 5G. As they bid to outdeliver each other with unlimited plans, they’ll need to show customers in the UK and around Europe why 5G is worth the upgrade.