Government and MNO’s spending on 5G development. Who is far beyond ambitious goals?

2019-06-26

By Andris Breške, Manager of RIGA COMM

While we are following the global conflicts over trade and technology (trade war or tech war) between US and China, publicly loudest story about the US ban on Huawei, the industry players are continuing to invest and develop new generation technologies without fear about a global recession. We see how financial and economic experts are talking about recession more frequently indicating bad numbers at the stock market and largest economies.

But I want to indicate that technological development is more about taking the lead in the next decades, so we see and will see how governments, companies and global organizations are competing and investing an impressive amount of money. One of trend and key dispute are about 5G (the next and the fifth generation of wireless technology) rollout. It will be the nation’s and business-critical infrastructure, connecting to high-speed and high-capacity networks to our valuable and important physical and virtual assets, from buildings, utility grids, industrial things, cars and also our personal devices.

In my article, the numbers are from reports and public information without references for this time. They can change and be more accurate. For myself and you, it’s for general insight.

Europe

European Union has invested in 5G research more than EUR 350 million through public-private partnerships and plan within the Horizon 2020 Programme to realize EUR 700 million. Each European country has its own strategies and investment plans. For example, the Germany government dedicated EUR 100 billion to 5G infrastructure that goes together with its next industrial revolution (Industry 4.0) plans and programmes. The UK government has redirected EUR 670 billion in national infrastructure and from it around EUR 8 billion goes especially for 5G. Finland has a good background thanks to Nokia and we can think that the Finnish government’s one of the steps for 5G development was its around EUR 844 million investment by acquiring 3,3 % of Nokia. Can this help Europe to be at the forefront of the global competition?

United States

US government to accelerate development and deployment of 5G will spend EUR 1,15 trillion, but this granted bill not guaranteed the win in the global race to 5G. As it needs to go together with clear a strategy for and from all the stakeholders. US wireless industry plans is to invest EUR 250 billion to deploy a 5G network. In the same time, US establish a fund of EUR 18 billion for high-speed broadband networks in rural areas and that will support 5G rollout there in the next ten years.

Asia

Taiwan government has approved a budget of EUR 600 million on 5G development. But if we talk about strategy and its execution, then need to highlight South Korea with its government investment EUR 23 billion to establish a full-fledged 5G environment by 2022. Where government’s plan local MNO’s (mobile network operators) – SK Telecom, LG Uplus and KT – actively execute, building a network and offering data plans for early users already. As well as Samsung here with its 5G phone plays an important role.

Can state-owned wireless operators with government speed up 5G network deployment? Definitely, that we see in China. China Mobile, China Unicom and China Telecom will be the first which will get 5G licenses. Investment numbers are up to EUR 400 billion in the coming years. While Japan’s government will support EUR 13 billion investment plans of MNO’s NTT Docomo, KDDI, SoftBank and Rakuten. A good example of how four providers are cooperating together and with government support to build 5G infrastructure not only in big cities but also in rural regions. Price competition is expected in any case, so for me would be interesting to know how will they divide investment volumes.

Russia

Similar talks are coming from the Russian government that could be created a single 5G infrastructure operator with close to EUR 1 billion investment by four MNO’s – MTS, Beeline, Tele2 and Megafon. If so, then what means MTS and Huawei agreement to develop 5G in this country? Russia has investment programme “National Projects (2018-2024)”, but how much of EUR 20 billion planned digital infrastructure programme is with focus on high-speed transmission projects isn’t known, at least I didn’t find.

Latin America

Latin America countries like Brazil, Argentina, Mexico and Colombia are also proactively exploring 5G capabilities, but in this region, MNO’s are more important to provide stable current 4G network and recover its investment costs. But 5G trialling is and will be in partnership between government’s, telecommunication companies and technology developers.

By investment volumes of governments and market players, we can make predictions who will dominate in the 5G global race. Asia is moving with the top gear and ambitions is extremely high for 5G. For them, an advantage is its manufacturers that invest heavily in research thinking about this new generation network technology.

At the end I want to indicate on while telecom operators seek to compensate their massive investments on 4G LTE standard infrastructure, in Finland, China and South Korea researches are trying to identify and discuss the 6G generation. But the industry doesn’t want to talk about 6G while still being formed understanding and business models how to make money from 5G. More than ever before, smart long-term decisions and short-term flexibility will help to survive telecom companies in rapid growing cross-industry technology business jungle.

Visit the RIGA COMM 2019 Internet of Things Conference on 10 October and join 5G Techritory Forum discussion on 5G development.

Follow the news of the conference at facebook.com/events/357400731726649/

And be aware of Baltic Sea Region 5G Ecosystem Forum “5G Techritory”- 5gtechritory.com