Visitors to the UK, lapping up cheap beer and pub grub while its currency plummets, can also witness some of the slowest 5G connections in the world. For anyone cash-rich enough to buy an early 5G smartphone, and station themselves near one of the few mobile sites providing 5G coverage, speeds max out at 569 Mbit/s, according to data from OpenSignal.
That might sound impressive, but it's less than 5G customers can expect in the US, Switzerland, South Korea, Australia, the UAE, Italy and Spain. It is, at least, some 128 Mbit/s faster than maximum 4G speeds -- unlike in Australia, where the top 5G speed is 158 Mbit/s slower than the zippiest 4G connection. But when the "old" tech can deliver as much as 950 Mbit/s, who needs 5G anyway? (At least for faster mobile broadband...)
Discounting Switzerland (so often Europe's outlier), European countries fare poorly in OpenSignal's comparison of 5G speeds. But speed is only a part of the story. While US and Asian operators work on extending their 5G reach, many European countries have yet to introduce a commercial service. And in some that have rushed 5G to market, rollout could be a long and painful business. Operators spend years deploying any new network technology. The worry is that 5G rollout will take even longer than usual.
This matters for two reasons. The first is that 5G could turn out to be far more economically important than it might currently appear. If those, ahem, lightning-fast connections give rise to new services, developers will probably flock to the countries with the best 5G infrastructure. One might turn out to be the next Google, and Europe could do with a digital giant of its own. New services might also boost industrial productivity (factory automation is a focus area). Should Europe lag the US and China, its companies might struggle to compete on a global stage.
The second reason is that a long walk to nationwide 5G could exacerbate the "digital divide" -- the gulf between the digital haves and have-nots -- in individual countries. For governments trying to reinvigorate deprived areas and stop rural communities sliding into economic irrelevance, this long walk looks awkward. It also comes amid a surge in populism, fueled by a growing wealth gap between rich and poor and a sense that established elites have ignored the concerns of ordinary people. Operators that have chosen to focus their early 5G efforts on places like London's Canary Wharf, where Oxbridge-educated lawyers sip grande soy caramel frappuccinos opposite pinstriped bankers, could provoke further discontent.
The spectrum squeeze
But why is Europe struggling to get its 5G act together? In countries yet to launch 5G, it is often because new spectrum has still not been made available by government authorities. Most countries in eastern Europe fall into this category, but France does, too. In markets such as the UK, meanwhile, operators are being spoon-fed new 5G spectrum in successive auctions, as if the government is worried about the dangers of an overdose.
The effect is twofold: fragmentation -- a kind of digital divide across the European region -- as different countries fall out of sync; and higher costs. By restricting the amount of spectrum sold at any one time, authorities have driven up prices, say critics, as operators fight over scraps. Toss a thin slice of meat into a pit of hungry predators and see what happens.
Operators that have fought hard for their 5G concessions are now mewling in pain. After spending nearly €2.2 billion ($2.5 billion) on new 5G spectrum, Deutsche Telekom said the money could have been used to build approximately 50,000 mobile sites instead. It soft-launched a 5G service in Berlin and Bonn this month but does not expect to have more than 300 5G antennas in operation by the end of the year. Across Germany, Deutsche Telekom currently maintains about 28,000 mobile sites.
Opponents are unsympathetic. Operators always bleat about regulatory unfairness, and yet competition forces them to invest, they say. Another argument is that operators would simply pocket the money, if spectrum were given away, and not use it for network rollout. Many shareholders with an eye on short-term dividend payments would undoubtedly approve. France's Orange, one of Europe's biggest operators, is understood to have encountered shareholder resistance to its splurge on all-fiber networks in recent years.
Regulators have an alternative, though. In the "beauty contests" favored by the likes of Ericsson, a Swedish mobile network equipment maker hoping to profit from 5G network spending, authorities have substituted stringent coverage obligations for high spectrum fees. Fail to meet these and you could lose your license, is the ultimate threat.
Germany, however, plumped for both high fees and stringent obligations. Its auction design was clearly intended to maximize returns, according to Ericsson. "There were about 450 rounds and after 100 rounds, with the price at €2 billion [$2.3 billion], the allocation of spectrum didn't change," says Gabriel Solomon, Ericsson's head of European government affairs. The eventual proceeds were roughly €6.5 billion ($7.3 billion). At the same time, license winners are supposed to hit a 98% coverage target by 2022. Outraged operators took legal action against those rules and were rebuffed by the Cologne Administrative Court in March. That seems unlikely to be the end of the dispute.
Elsewhere, authorities seem to have prioritized a short-term windfall over long-term 5G benefits. In Italy, the other European country whose 5G auction proceeds well exceeded forecasts, the coverage obligations attached to the critical "midband" spectrum do not seem very onerous. According to a presentation given last year by Mauro Martino, the head of the spectrum office for Italian regulator Agcom, operators are required to cover a relatively small percentage of Italian municipalities, and some rules do not apply to licensees with less than 80MHz of spectrum. That would seem to excuse Wind Tre and Iliad, but not Telecom Italia and Vodafone.
In any case, Telecom Italia aims to provide a 5G service to just 22% of the population by 2021. Operators in other countries have been far cagier about rollout targets, preferring to identify cities where 5G will show up. "We've said 25 cities by the end of 2019, but there is not necessarily blanket coverage -- it is a presence," says Mike Eales, the head of network services strategy and architecture for Three, the smallest of the UK's four mobile network operators.
A few other details have slipped out, though. BT, the UK's biggest operator, wants 5G at 2,000 of its 19,000 mobile sites by May next year. Deutsche Telekom, before its costly spectrum outlay, said it would cover 99% of Germany's population by the end of 2025. Swisscom, remarkably, is targeting 90% coverage by the end of this year, even though a government requirement is for only 50% of people by 2024. Its hope, perhaps, is that authorities will relax legislation on radiation limits -- which could hinder 5G services -- if it shows it is a good citizen.
Next page: Balancing the books