The first ever 5G phone call was made between Vodafone and Huawei at Spain’s Mobile World Conference in February. According to Vodafone’s CEO, António Coimbra, “The realisation of this first 5G connection in Spain reflects the leadership of Vodafone and Spain in mobile technologies.” He said the historic moment demonstrates a “factor of great relevance for the competitiveness and digital transformation of the country.”
In an era of instant messaging, email and online streaming, the excitement over a phone call might seem a tad old-fashioned. However, this call represents a new, cutting-edge technology that has the potential to benefit not only the digital economy, but also society at large.
With data-speeds that are 50 to 100 times faster than 4G, 5G technology will provide the foundation for a multitude of technological innovations. It will power web-connected appliances, support the development of smart-cities, and revolutionise production lines. A future with 5G technology means you will be able to seamlessly download high-definition videos on your smart-phone while being transported in a self-driving vehicle.
The economic gains expected from the development of this new technology are also impressive. Within five years it is expected that there will be around 1.3 billion users of 5G networks– that’s about 17% of the world’s population. These networks will increase the number of connected devices and improve productivity rates. The European Commission has even projected that by 2025, the deployment of 5G technology in the automotive, health, transport and utility sectors will yield annual benefits for the EU economy around €62.5 billion.
The first 5G-powered conversation taking place in Spain is just one of many examples of how the country is positioning itself to be a leader in the development and implementation of new mobile technology in Europe. The country already has the most extensive fibre network in Europe and a 4G coverage surpassing 95% of the population.
Last year the Ministry of Energy and Digital Agenda announced the National 5G Plan, consisting of several steps to accelerate the digitisation of Spain’s economy. The government just launched a consultation last month for the issuance of its first 5G tender. This will be followed by the introduction of 5G networks in five or six regions and ongoing support for R&D in 5G technology. If successful, the use of 5G technology across Spain could add €14.6 billion annually to the Spanish economy and contribute to the creation of a significant number of new jobs.
While Spain is moving full speed ahead in generating economic gain from this new technology, Europe as a whole lags behind other regions in the deployment of 5G. Despite the EU’s adoption of the 5G for Europe Action Plan and the allocation of €700 million for 5G research between 2014 and 2020, Europe will account for just 9% of the world’s 5G network users by 2023.
Unfortunately, poor coordination amongst national regulators and bureaucratic red-tape means the continent is now playing catch-up with the rest of the word. According to Anders Ansip of Euractiv, who serves as European Commission vice-president in charge of digital single market policies, the United States invests double what Europe does in 5G technology. The EU’s recent decision to award 5G spectrum licenses for 20 years, instead of the 25 years (the period recommended by businesses and the European Parliament), may further reduce the incentive for European mobile to invest in this budding technology.
Spain has decided that it won’t sit back and wait for the rest of Europe to get its digital act together. Admittedly, 5G technology is still largely untested and many of the technologies that will benefit from 5G networks are in the development stage themselves. However, Spain is prepared to play the long-game. The extent to which Spain’s proactive policies will benefit the economy should become apparent as these nascent technologies mature over the next few years.