Coronavirus crushes Europes year of 5G dream

The coronavirus pandemic is holding back swaths of Europe from launching next-generation 5G mobile networks during what was meant to be a landmark year, hampering the bloc in a race against China and the U.S.

5G equipment in Europe was already a target for conspiracy theorists who took to burning masts and antennas in several countries, putting a strain on telecoms companies. But the bigger problem for the continents 5G rollout, industry officials now warn, is a series of cancellations of crucial spectrum auctions — access to radio waves — as well as investors fears of an upcoming recession.

The pile-up of problems is set to make the EU miss its self-imposed 2020 deadline just as other countries — notably China — speed ahead in their deployment of the new technology.

“The pandemic has proved the vital purpose of digital networks, but our rollout plans are under pressure due to both the economic recession and false claims on 5G,” said Lise Fuhr, head of telecom lobby association ETNO, which represents Europes largest operators.

Big EU countries like France, Spain and Poland, as well as the U.K., pushed back spectrum auctions that were scheduled to be held around the summer. This makes the EUs plan to have “commercial large scale introduction” across the bloc by end-2020 a pipe dream, as operators rely on key spectrum bands to set up their 5G connections, despite rollouts in some countries.

The challenge governments face is setting up new auction processes that still comply with tough regulatory checks that protect companies rights.

Auction delays are set to compound Europes disadvantage compared with technological rivals.

Chinas telecoms sector started testing new 5G applications during the countrys battle against the coronavirus and the government has vowed to make 5G a key plank of its recovery plans.

South Korea, currently the world leader in terms of 5G rollout, is struggling too but retains an edge over Europe. Japans mobile operator Rakuten said this month it would delay the launch of a 5G network but still launch this year. The U.S. telecoms industry suggested it does not face big additional delays due to the pandemic.

Auctions, investments at odds

In Europe, much of the problem has to do with delays to plans to hold spectrum auctions.

According to the latest update of the EUs 5G Observatory, just over 20 percent of spectrum bands for 5G connections had been auctioned by March.

Now the health care crisis has caused planned auctions to be postponed in France, Spain, Portugal, Poland and Austria, with French operator Bouygues last weekend calling for the auction to be pushed to end-2020 or even early 2021.

The challenge governments face is setting up new auction processes that still comply with tough regulatory checks that protect companies rights.

“There are a lot of rules around auctions to make sure theyre taking place in a fair manner, and a lot of operators have taken governments to court in the past,” said John Delaney, associate vice president at market analysis firm IDC. “You need to be very sure that the alternative process youre putting place is sufficient … that it is legally defensively for all parties concerned,” he said.

Not all countries face big delays in spectrum allocation, however. The Netherlands telecom regulator said on Tuesday it would kick off its auction for part of 5Gs spectrum bands on June 29 as planned, and countries like Germany and Italy held major 5G auctions last year.

On the investment front, telecoms executives fear a declining economy will scare off investors and shareholders just as the sector needs billions of euros to bankroll the construction of new infrastructure.

Telecoms companies have struggled with low profit margins for years. 5G is forcing them to invest upfront in the hope that innovations such as connected driving, digital manufacturing and consumer internet of things devices will quickly become popular across European markets.

5G spectrum auction delays have been postponed due to the coronavirus crisis | Sean Gallup/Getty Images

A steep recession in the eurozone — the European Central Bank now expects the areas economy will shrink between 8 and 12 percent — iRead More – Source

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