How is Europe Doing with 5G mmWave Networks?

5G mmWave spectrum is a great complement to the mid-band spectrum. It is mainly used to deliver 5G for eMBB use cases in high-capacity areas, support the use of 5G FWA to provide super-fast broadband to home and offices, and support 5G applications that require high capacity and low latency. While 5G mmWave networks have been successfully launched in some countries, it still needs to achieve more scale to reduce deployment costs, increase the choice of affordable devices, and facilitate greater adoption. It is a positive sign to see that momentum is building in Europe and other regions, as this should help to inform operators’ considerations of the role that mmWave will play in their deployments as well as when to initiate or accelerate investments in the technology. A significant amount of work is required before 5G mmWave networks become a reality across Europe.

There is much noise on mmWave deployment abroad, Europe stays focused on the sub-6GHz. While it is not providing as much bandwidth as mmWave bands, it is capable of providing a much larger coverage. There are no widespread devices (approx. 10) to support 26GHz though 26GHz is the primary band being used for 5G mmWave deployment in Europe. To date, many European regulators have completed 5G awards for 700MHz and 3.5GHz spectrum, and there are fewer licensing processes that have been concluded for 5G use in the 26GHz band. Only Italy, Denmark, Greece, Finland, Russia, and Slovenia have already awarded the 26GHz band of the 5G spectrum; Germany and the UK have made it available to a limited extent. More regulators in countries such as Malta, Spain, Sweden, Croatia, and the UK, etc., are planning for auctions in the 26GHz band in 2021. As of now, Italy is the only European country with a 5G mmWave network, where FastWeb has operated and offered commercial 5G fixed wireless access (FWA) since December 2020, with advertised speeds and pricing on par with fiber.

One of the main use cases of mmWave deployment is 5G FWA. The COVID-19 pandemic accelerated the demand for reliable broadband, which has continued despite the rapidly reduced transmission levels achieved. Access to broadband services through mobile networks is also a great alternative for homes with no fiber or isolated second homes. Following this context, FWA services seem to have every reason to expand but there is one interesting situation in Europe. FWA attractiveness depends on its price and the fiber-to-the-home/fiber-to-the-building (FTTB/FTTH) penetration in a country. There are countries like Spain that already have a wide coverage of broadband with fiber optics (full fiber penetration of 82% in 2019), meaning that FWA technology has a very limited market. France is another of the uninteresting markets for FWA. Although its fiber optic infrastructure is lower than that of Spain (full fiber penetration of 46% in 2019), it is still working to further fiber optic infrastructure. FWA may mostly be needed in countries like Germany and the UK where the full fiber penetration is very low, 2.5% and 3.2% in 2019 respectively. While there is enthusiasm for full fiber deployment—for example UK has proposed a 2025 target for full-fiber broadband, and Deutsche Telekom is targeting full fiber by 2030—there is a possibility that those full fiber targets may be missed. Then FWA, as an alternative technology to fixed broadband, still has significant room to serve high-speed broadband.

Despite the limited activity on mmWave, it has been identified that there are significant net economic benefits to deploy 5G mmWave, together with 3.5GHz and other existing spectrums, in Europe across a wide range of scenarios for both indoor and outdoor coverage. Using a base-case eMBB network deployment, each of the modelled use case show an estimated benefit that is five to twenty times greater than the estimated cost. An estimated total cumulated GDP benefit of €140+ billion for €20 billion of cost (to 2040), could span across 30 European markets (EU27 + Switzerland, Norway, and the UK). European regulators need to stimulate the growth for deployment in the 26GHz band.

Although the ecosystem is still at early stage for 26GHz, network equipment and device chipset providers claim that they are ready to support 26GHz solutions. There are currently 45 28GHz-compatible devices versus 10 for 26GHz, and the slow rate is mostly to do with spectrum availability. With only a few countries that have released 26GHz spectrum, device OEMs have less incentive to commit to production for this band. There should be a particular focus and attention to the positive incentives or subsidies to encourage development of mmWave applications and use of 26GHz spectrum. Maybe it is useful to have more visibility of ecosystem developments, how quickly devices (i.e., modules, phones, indoor/outdoor CPE) will arrive to market based on experiences in other bands, and the impact decisions made by non-European countries will have, which may act as an additional trigger for ecosystem development for the 26GHz band.

Within the 5G ecosystem, small-and-medium enterprises (SMEs) play an important role, whether as providers of advanced connectivity use cases or developers of technologies that enable networks and use cases. So far, most 5G-based SMEs are at the early stage of development due to the difficulty financial access. This indicates a need for public help in mobilizing 5G investment from the private capital market to enable Europe to compete globally. 5G business models carry a high-risk profile with regards to investment, which poses challenges in creating the right incentives. 5G innovations may have high potential but they present high demand risks as there is still uncertainty on user access to 5G capabilities. There is a difference in EU member states’ situation and policies towards 5G (i.e., spectrum allocation, connectivity readiness), which can cause issues for SMEs trying to reach scale. European regulators need to consider how to help them drive 5G innovation and make a significant impact.

While access to spectrum is key, there should be measures to encourage trials, network deployment and further innovation. For example, Japan introduced such a policy and operators pulled forward their planned investments in sub-6 GHz as well as mmWave infrastructure to take advantage of the short tax incentive window. Singapore introduced grant schemes for solution providers and technology developers commercializing 5G solutions.