Europe Is Falling Behind on 5G Rollout, Top Companies Warn

Europe’s deployment of 5G cellular-communications networks is alarmingly slow, says a lobbying group of the Continent’s biggest companies, warning that Europe is far behind other regions despite being home to two of the world’s top telecommunications companies.

“It is not too late to close the gap with the United States, South Korea and China,” said the European Round Table for Industry in a report released Friday, “but it is urgent to take action to address that gap.”

The 55-member Round Table, known as ERT, includes leading car makers such as Daimler AG and BMW AG , major oil companies BP PLC and Royal Dutch Shell PLC, pharmaceutical companies AstraZeneca PLC and Merck KGaA, as well as Ericsson AB of Sweden and Nokia Corp. of Finland, which are among the world’s most advanced and experienced producers of cellular-communications systems.

Although many next-generation 5G technologies are still in development, several countries around the world last year began building networks. The new systems will offer not just significantly faster connections but also huge data flows that will enable driverless vehicles, smart appliances and Internet-of-Things networks that could eventually connect consumers to factories manufacturing custom-designed products on demand.

“Europe has significant industrial strengths which can underpin 5G deployment,” said Martin Lundstedt, chief executive of Swedish truck maker Volvo AB and chair of the ERT’s committee on digital transformation. “We have to do better.”

Amplifying Europe’s 5G slowness is the Continent’s inferior performance deploying current-generation 4G networks, the ERT found. About 70% of European cellphone subscribers used 4G networks last year, compared with roughly 90% in the U.S., China and South Korea.

The group said that more than half of the European Union’s 27 member countries haven’t yet launched 5G commercial services, while in South Korea and the U.S. initial services were available last year.

A factor slowing 5G launch is that many European countries haven’t yet allocated sufficient bandwidth or planning and construction permits for cell towers, the group found. While availability of radio spectrum isn’t an issue, because systems aren’t yet in place, the problems around it have added to uncertainty and difficulties planning.

Spectrum availability is “an area where Europe is demonstrably performing poorly relative to international competitors,” the ERT said.

Europe pioneered the first generations of digital-cellular communications and was a world leader in shifting from analog to digital networks in the 1990s. Most of the earliest handset giants were European, including Nokia and Ericsson, which left the market after smartphones took over this century.

Now the two companies are mainly battling with China’s Huawei Technologies Co. and South Korea’s Samsung Electronics Co. to build 5G networks world-wide. The U.S. and several European countries have restricted use of Huawei equipment because of growing political fights between Washington and Beijing.

EU officials and many European national leaders have advocated quick and extensive deployment of 5G networks to boost European industries such as advanced manufacturing. But regulatory delays, compounded by local opposition to building 5G antennae in many locations, have slowed the process.

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