Comment

Has the US lost the leadership on 5G?

Gérard Pogorel / Jul 2023

Image: Shutterstock

 

The 19 June FT article by Gideon Rachman entitled ”Europe has fallen behind America and the gap is growing“ has touched upon a not so sweet spot in Europe. Its title, as well as many of its conclusions are no doubt amply justified. The author could have considered in the balance the successful European aircraft industry, possibly a glass of champagne or prosecco, but what we would like to do here to mitigate the picture portrayed on the European side is introduce a -modest- consideration in the world of electronic communications , and possibly also introduce essential joint transatlantic strategic considerations.

If we look at digital economy developments, European legislation introduced in 2020 have changed the network investment landscape in a positive way. The evidence supports the view that investment levels from a broad range of operators have decisively increased in response to that initiative. Europe also has an ambitious plan to get full 5G coverage by 2030, ensuring digital equality and inclusion for all European citizens and businesses no matter who or where they are. The US should reflect upon some recent findings highlighting digital shortcomings in the otherwise global rosy picture. 

Recent studies by Accenture and Analysys Mason confirm that, due to 5G spectrum limitations in the mid-band allocations in the US (three blocks of mid-band spectrum), the areas with the greatest potential for 5G expansion are lagging behind. The studies confirm that US wireless operators have a paltry 5% of such bands, with the lion’s share of mid-band spectrum being unlicensed or in the hands of government bodies. The consequence is a limited 5G mobile network capacity, putting users in the US at a disadvantage. 

Spectrum management and harmonization play a key role for Europe and its trading partners. At least in the areas of 5G services provision and digital regulation, Europe is not only not behind, but ahead of the game. What can we think of this? Not just that Europe, in favourable circumstances, is perfectly capable of making positive industrial decisions. But also, and this has far-reaching policy consequences, that when Europe and the US (and we would add their allies) make poorly coherent decisions, opportunities for worldwide competitive quality services and industrial scale (here network equipment) are lost, to the detriment of all.           

Going up the value chain, Europe has acted decisively in response to structural competitive problems in the digital platform space, seeking to blunt the power of tech giants through the enactment of the Digital Markets Act. Responsibility for content is, in turn, dealt with separately under the Digital Services Act. These legislative initiatives are up and running this summer and provide a blueprint for action to many other countries around the world, reminding us of the impact that European data protection policy has already had around the world with the GDPR regime. Meanwhile, the US languishes behind in this regard.

Mid-2023 is a critical collision juncture of sustainability and sovereignty imperatives, a moment in a race against time in a liquid international context. There is a highly complex international and cross-industry machinery in motion. It can be expected, in a 2024 perspective and beyond, that all policy and industrial aspects will be the subject of protracted discussions between Europe and the US. 

Strategic autonomy issues, regarding energy production and consumption, production of and access to mineral resources, securing industrial components and value chains, transitioning towards more resilient industry structure and trade, are all areas where digital industries and services have a prominent role to play, the better together.

The Joint Statement of the EU-US Trade and Technology Council of 31 May 2023 certainly goes in the right direction. Its principles should in particular apply when Europe’s and America’s ambitious vision will be supported in helping form a strong position in view of the WRC, That is why all eyes will be on Dubai at the end of 2023, when decisions will be made that are critical to the future of both mobile connectivity and the wider communications ecosystem. 

The ITU’s quadrennial World Radiocommunication Conference (WRC), taking place from 20 November – 15 December, will gather national administrations and telecom industry members to review and update the global use of radio frequencies and will be fundamental to the future and competitiveness of the nations.

 

Gérard  Pogorel

Gérard Pogorel

July 2023

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