EU leadership on 5G will depend on the ability of policy makers to think out-of-the-box, and beyond old debates. Instead, they should keep focusing on universal, technology neutral and future proof principles.
On 26th January, the industry and research committee (ITRE) of the European Parliament organised the first hearing on the future of electronic communications following the legislative proposals tabled by the European Commission in September last year.
Listening to the discussion it emerged clearly that the debate is increasingly heating up and that, at least when it comes to the future of pro-competitive access measures, two clear opposite camps are shaping up: on one side, consumers, alternative telecom operators and regulators (BEREC) that ask to maintain the pro-competitive framework that guaranteed high broadband performances and low prices in most EU countries for the last 15 years; and, on the other side, dominant telcos (ETNO and GSMA) and some financial institutions such as HSBC loudly advocating for a deregulatory agenda that would grant higher profits to few selected players and for their investors.
Connected to this policy fight there is a much more strategic ongoing battle, the one on the future of 5G and on the way to ensure EU leadership in the development of this emerging technology. How 5G will finally develop and what will actually deliver is not consensual yet.
A recent study recently published by the European Parliament precisely on this topic raises several concerns and affirms that established telcos are trying to steer current and future 5G policies towards a precise scenario, i.e. 5G as the new generation of mobile communications based on exclusive spectrum licenses (just like 3G and 4G). In this model/scenario only few players share the consumer market for faster and more reliable mobile communications.
But 5G could mean much more than this. The goal that Europe could set for itself is that 5G will finally enable full convergence between fixed and mobile data communication services. On top of this seamless connectivity any provider should be able to create and offer new services, that is the emergence of totally new and innovative platform.
In order to do this, it is essential that policy makers think out-of-the-box in an open manner and that, with this view, they refrain from defining rules today that could set development of 5G on an old path. Policy makers should keep focused on universal, technology neutral and future proof principles.
In this respect competition has played in the past and will play in the future as enabler of innovation and of investments. A pro-competitive framework in terms of access to spectrum resources combined with well-studied regime for spectrum sharing where possible will be crucial to give to Europe its much desired leadership in 5G.
Picture credit: Andrew J. Russell
Europe can still be a rather bumpy landscape for innovators, although innovators should learn to market better their achievements, argues Robert Madelin, Senior Adviser for innovation within the European Commission and former Director General at DG Connect.
The Digital Post: What are the major challenges facing the DSM strategy?
Robert Madelin: The Strategy itself identifies several challenges under its 16 actions. It’s also clear that some of the changes brought in by the Strategy will imply winners and losers. The main political challenge is whether we are ready to accept this because we care enough about improving our society.
RM: We have entered the Fourth Industrial Revolution, a period where everything is changing and evolving so fast that it is difficult to grasp what’s next. Under these circumstances, the successful strategies should go to the basics. The Digital Single Market strategy is precisely future-proof in this sense, since nobody knows what the future is. Delivering infrastructure, capacity, industrial transformations, skills awareness, cyber security while investing enough in research into Quantum, Big Data and 5G: This is a good portfolio effort. But it’s impossible to avoid taking risks in a period of big change. The Digital Single Market Strategy take such risks and it is likely that some of its actions will fail.
TDP: On 1st September 2015 you were appointed senior adviser for innovation within the European Commission. Jean-Claude Juncker tasked you with drafting a policy review on innovation in Europe. What can you tell about this report?
RM: I think the missing piece is often the recognition that research is a component of European innovation and competitiveness. Let me put this in figures: less than one euro in five spent by European companies on innovation is poured into research. Moreover, in some areas we don’t have a positive conversation about innovation. At European level we don’t have a conversation at all. What we have, instead, is little pockets of reaction to disruptive innovation.
This resistance to innovation may be legitimate or not, but it is difficult to act on it if we don’t have a proper debate. That’s why Europe can still be a rather bumpy landscape for innovators and that’s the problem we have to fix. The report should be released by the end of June.
TDP: So are you saying that Europe is not a positive environment for innovators?
RM: Let’s talk first about the environment in the world. In 2015 the communications firm Edelman carried out an extensive survey on innovation by interviewing tens of thousands people in a hundred countries.
What came out is that two out of three respondents understand that innovation is good for growth and jobs, but only one out of three think that innovation is doing something good for the planet as well as for their communities and families.
I believe this proves that innovators are marketing their intentions and achievements very poorly and that’s not true only in Europe. The same survey tells us that Europeans want innovation to primarily look at issues such as health, family, community, environment. The two things fit together.
Everybody wants innovations, and wants innovation to benefit the areas they care about. Therefore, the vision underlying the European approach to innovation is right: ‘responsible innovation’ is a key concept within our research programme Horizon 2020. That’s the theory. As far as the execution is concerned, we are beginning to learn.
Coming to your question, is the atmosphere positive for innovators? Not yet. Can it get better? Yes. Do we understand how to? I think so. Are we working on it? Yes.
TDP: Let’s switch to the telecom sector. What do you think should be the priorities of the upcoming review of the telecom framework?
RM: The reason to have a telecoms framework is systemic empty competitive mechanisms in the market. Now we have to revisit how far that’s a problem. We’ve already narrowed enormously the number of markets to which the regime applies.
The second question to ask is to what extent we need a framework. We still do because telecoms it’s a network industry. But how do we tune the framework to ensure the best possible supply of infrastructure? That’s a big problem that we haven’t fixed yet.
Of course, everybody has different views on the best answer to this. My personal view, having been for five years Director General of DG CONNECT at the European Commission, is that the theory of the ladder of investment doesn’t reach to fiber to the home.
If it doesn’t work, we need to apply another theory: Which means we might need to either invest more public money or structure differently the market in order to generate very high speed connectivity investment.
This is part of a series of interviews held during the conference "Digital Single Market: Bridging the Gap" organized by the British Chamber of Commerce in Belgium. The event featured keynote speeches from Commissioner Oettinger Juhan Lepassaar and Robert Madelin (EPSC). Other speakers included senior EU officials, parliamentarians, trade bodies and business leaders who discussed the future challenges for business in the areas of fintech, e-health and industry 4.0.
Picture credits: Dennis Skley
If we do not open up this band in Europe as soon as possible we will not be able to get the benefits from 5G. Europe lagged and lag behind regarding 4G but took the lead of 3G. Now we need to take back the lead.
Picture credit: phys.org
3G changed the telecom markets and paved the way for new services. 4G changed the logic of telecom into the information society. 5G will mean a change in both the structures and the nature of our industries and economies.
The introduction of 3G was a huge modernisation. It was a revolution for mobile telecom and gave Europe the lead. Mobile telephony was suddenly a popular phenomenon, creating new opportunities and new accessibility. Today there are more mobile phone subscriptions in the world than human beings. It has created universal connectivity. Europe was in the lead of this development but lost it.
4G is digitalisation. Old services in new structures and new services that we couldn’t foresee. New devices such as tablets and smartphones are a function of these new information technologies and the Internet is becoming a base for most sectors and industries of our societies.
This development is crucial for the competitiveness of our economies. And Europe is lagging behind in the deployment of 4G. Other parts of the world – such as the US, Japan, South Korea – are as much as four times more rapid in developing the use of mobile broadband.
5G will be crucial because it is the full industrialisation. It will be transformational for everything from the transport sector to the car industry as well as health industry, entertainment and media and it will change the structures of production as well as the criteria for productivity and marketing.
In order to take the lead in the digital economy we need to do a lot.
What we today call cyber security must be the security and defence of our economies, production and supply chains as well as for the credibility of banking and trade and for the protection of our private lives.
Data protection and cyber security must go hand in hand with the development of new services and be based upon our own actions.
Regulations and legislation must be technology neutral. The European Union must adapt its legislation regarding IPR, services, copyrights, VAT and sales legislation to the 21st century rather than keeping those of the last. All this is complicated but it must be done.
It will be much easier if we decide to take a decisive step and take the lead in launching and deploying the nets of 5G. Europe should be in the lead, in a harmonised action where the leading Member states must be the template and where the aim must be to make the European Union the leading 5G economy of the world.
It will require much more competition between different actors, European markets and trans-European nets, by coordination, harmonisation or by market development. It will require the combination of economy of scale integrated in competition over the borders.
The release and the coordination of the 700MHz band – now finally proposed by Commission – will be a crucial and formative first step in order to live up to these challenges.
When we will have the lead in 5G and the best capacities, the momentum and magnitude of change will help us with the reforms needed to take the full benefit of the digital industrialisations that we now are up to.
To take the lead on 5G is one of the few single issues where we can take explicit decisions, not only define goals and targets, that will bring back growth, leadership, innovations and competitiveness for the European economy.
The Commission must be tough and forward looking and so must the European Parliament, in order to convince hesitant Member states that Europe means more in the digital era than ever.
By 2020, we are expected to have 50 billion connected devices. Will European Telecoms firms monetize the explosive growth of Internet of Things? The next five years will be critical. In the long term, much may depend on the development of 5G technology.
Like many memes which originate in the web domain (for example Web 2.0), Big Data has an impact on the Telecoms industry. However, unlike Web 2.0 (which is mostly based on the advertising business model), Big Data has wider implications for many domains (for example healthcare, transportation etc).
The term Big Data is now (2014) quite mature. But its impact is yet to be felt across many verticals over the next few years. While Telecoms is also a vertical, it is also an enabler of value for many industries. Hence, there are many areas where Telecoms will interplay with Big Data.
Based on my teaching at Oxford University and the City Sciences program at UPM – Technical University of Madrid – Universidad Politécnica de Madrid, I propose that the value of Big Data for Telecoms lies in IoT (Internet of Things)
IoT is huge, but how huge?
[Tweet “By 2020, we are expected to have 50 billion connected devices”]
To put in context: The first commercial citywide cellular network was launched in Japan by NTT in 1979. The milestone of 1 billion mobile phone connections was reached in 2002. The 2 billion mobile phone connections milestone was reached in 2005. The 3 billion mobile phone connections milestone was reached in 2007. The 4 billion mobile phone connections milestone was reached in February 2009.
So, 50 billion by 2020 is a massive number, and no one doubts that number any more. But IoT is really all about Data and that makes it very interesting for the Telcos. Data is important, but increasingly it is also freely available.
Customers are willing to share data. Cities are adopting Open Data initiatives. Big Data itself is based on the increasing availability of Data. IoT is expected to add a huge amount of data too.
But, who will benefit from it and how?
There is a phrase variously attributed to Oil Magnate J Paul Getty – ‘The meek shall inherit the earth, but not its mining rights’. In other words, Data will be free, available and Open, but someone will make money out of it. No doubt, the web players and various start-ups will all monetize this data. But how will Telecoms?
[Tweet “Looking at the business case for Big Data and IoT, the next five years are critical for Telecoms.”]
Here’s why. IoT connectivity will come in two forms: Local area connectivity and Wide area connectivity. Bluetooth 4.0 and iBeacon will provide the local area connectivity. We can expect that from 2015 onwards – most devices retailers will support Bluetooth 4.0.
But the wide area connectivity will still need 5G deployment, which is also the most logical candidate for wide area IoT connectivity. And therein lies the value and business case for Big Data for Telecoms: 5G will be needed to connect the ‘IoT islands’ over the next years.
Will Telecoms monetize IoT ?
Time will tell. Specifically the next five years since most analysts predict that 5G deployments will take place in 2020 and beyond.