• The GSMA forecasts 5G will account for 80% of Europe’s mobile connections by 2030, up from a 30% take-up rate at the end of 2024
• But the region’s 5G penetration rate is lower than other than other “advanced regions”, including North America, East Asia and the Gulf Cooperation Council states
• The GSMA, as ever, lays much of the blame at the door of regulators and policymakers for not encouraging a more pro-investment environment
• 5G is expected to add around €164bn of economic value in Europe by 2030, but topping that will be challenging “within the constraints of the current regulatory environment”, reckons the industry body

The GSMA Association (GSMA), which represents the world’s mobile operator community, has provided a 5G progress report for Europe as part of its latest annual Mobile Economy Europe study, and its conclusions make for somewhat depressing reading for the Old Continent.

And, as has become commonplace, the report included the now-familiar GSMA finger-wagging at the region’s regulators and policymakers for not doing enough to stimulate much-needed investment in network upgrades. Much change is required, warned the trade association, if Europe is to boost its digital economy and “re-establish a leadership position in the global tech race by 2030”. (More on those required policy reforms later…)

According to the GSMA, 5G accounted for 30% of mobile connections in Europe (equivalent to over 200 million connections) by the end of 2024. By 2030, 5G is forecast to make up 80% of all mobile connections (equivalent to 533 million) in the region, after becoming the dominant mobile technology on the continent by 2026 (see chart below).

Europe’s current 5G penetration levels stack up fairly well against a global average 5G penetration rate of 24%, but not so great when compared with other advanced regions, such as North America, East Asia and the Gulf Cooperation Council states, which all have higher 5G adoption rates than Europe (see chart below).

The GSMA ruefully added that many operators in these markets are “shifting their attention” to 5G standalone (SA) and 5G-Advanced. “The adoption of these technologies in Europe will progress more slowly unless the challenges that restrict investment capacity in the European mobile sector are resolved,” the GSMA added gravely. The association views 5G SA and 5G-Advanced as important factors in unlocking new use cases and monetisation opportunities, particularly in the business-to-business sector. As of September 2024, 18 European operators had launched 5G SA services.

Where Europe does achieve top marks is the migration of subscribers onto newer network generations: The region, noted the GSMA, is expected to account for more than half of planned network sunsets worldwide in 2025. “This will give operators the opportunity to repurpose spectrum assets for more spectrally efficient 4G and 5G networks while also improving energy efficiency in the network [since legacy networks are less energy efficient],” remarked the lobby group.

Crunching the ROI numbers

Despite the GSMA’s ongoing and frequent criticisms of European policymakers for not creating a more “pro-investment” environment – the report is peppered with them – the trade body also draws attention to a worldwide industry problem that still stubbornly refuses to go away (and appears well outside the remit of policymakers) – how to persuade consumers that 5G is worth paying extra for.

“5G has not yet materially altered mobile revenue growth, which remains in the low single digits in percentage terms in most European markets,” states the report. “Consequently, there is increased pressure on operators to diversify their services and generate new revenue streams in adjacent areas

On the revenue flipside – costs – the GSMA reports that European mobile operators have invested more than €160bn in mobile capital expenditure (capex) over the past five years, much of which has been spent on 5G networks. While mobile capex/revenue in the region stood at 16% at the end of 2023, “likely marking the peak of the 5G investment cycle”, the trade association reckons that mobile capex is still projected to surpass €25bn each year until 2030.

Bleak as all this may sound, there are shoots of 5G optimism in Europe. Deutsche Telekom CEO Tim Höttges recently asserted that 5G, when done properly, delivers improvements in customer numbers, market share and profitability. “We are changing the narrative on 5G,” he proclaimed. 

It’s the GDP, stupid

The GSMA found that mobile technologies and services now generate around 5% of GDP across Europe (equivalent to €1.1tn of economic value added). And 5G is expected to benefit most sectors of the European economy, adding around €164bn of economic value by 2030. “However, achieving further growth beyond this will be challenging within the constraints of the current regulatory environment,” said the report.

“Urgent action is needed from the European Commission and other authorities within the European Union to deliver the policy reforms that Europe’s digital economy needs to support strong, sustained network innovation,” asserted John Giusti, the GSMA’s chief regulatory officer.

Among the GSMA’s policy recommendations for the European mobile sector are: Completing the digital single market to allow the mobile industry to develop and deploy services on a cross-border or pan-EU basis; doubling down on “additional measure to ensure fairness” in the internet value chain; initiating a review of EU merger regulation; and establishing a pro-investment and more predictable approach to EU spectrum policy

- Ken Wieland, Contributing Editor, TelecomTV