Romania was quick to embrace 3G, 4G and 4G+ technologies, and is currently on track to become the first country in South East Europe to hold a 5G spectrum auction. We spoke to telecom industry representatives about growth opportunities, as well as the competitive advantages of an early 5G technology adoption.
In September of last year, the European Commission issued its action plan for the deployment of 5G infrastructure and services, which it considers a strategic opportunity for Europe. Not only will the adoption of 5G services give economies on the continent a competitive advantage on the global market, the EC argues, it will also allow them to become active players in setting the global standards. Earlier, major EU-based telecom players, as well as leading companies from sectors that are likely to benefit early, had answered a call by Commissioner G.H Oettinger, responsible for the Digital Economy & Society, by drafting a manifesto for the timely deployment of 5G in Europe. Moreover, the key players are committed to holding large-scale demonstrations by 2018 and launch 5G commercially in at least one city in each member state by 2020.
This type of synergy is hardly surprising, given that 5G is certain to be an overall game changer for mobile operators, industries, cities and individual end-users. According to a 2016 survey by ABI Research, by 2025 the mobile operators’ worldwide 5G revenues will reach EUR 225 billion annually, with North America, Asia-Pacific, and Western Europe expected to be the leading markets. Moreover, a recent EU survey showed that the benefits of 5G introduction across the automotive, health, transport and energy sectors may reach EUR 114 billion per year.
If it follows the current roadmap, Romania is on course to become the first SEE country to tap into the opportunities the new technology has to offer. The road was paved in mid-June, when the National Authority for Administration and Regulation in Communications (ANCOM) launched a public consultation on the opportunity of holding a 5G spectrum auction. The interest of industry players was keen, with Vodafone Romania, Orange Romania and Telekom Romania, among others, submitting their input. The goal, ANCOM head Adrian Dita said at the launch, was to have all major Romanian cities benefit from 5G coverage in less than five years. Earlier that month, Ericsson and Telekom Romania had teamed up to stage the first 5G live demonstration in the SEE area.
The transition to the new technology is expected to be gradual. Moreover, up until recently, some telecom players have preferred to work with more advanced 4G formats before focusing exclusively on 5G technology. “4G+ technology still has a lot to offer on the existing licensed spectrum, such as higher broadband speeds for the end customers and a new range of IoT services,” Vodafone Romania representatives told BR.
According to industry experts, the next generation is expected to build on, rather than replace, the 4G services currently in place. “Although the 5G standard is not yet finalized, the architecture of a 5G network is known,” Vodafone Romania representatives told BR. “All the investments we make today in our Access and Core networks, to evolve our Supernet 4G+ network, are at the same time preparatory steps for the introduction of 5G, such as the implementation of NFV (Network Functions Virtualization.)” According to Orange Romania representatives, the country’s largest telecom operator debuted the virtualization process in 2014, and will accelerate it in order to be ready for the introduction of 5G.
Telekom Romania has also made significant progress in preparing its 4G network, which is partially already 5G-ready, for the transition by rolling out new baseband equipment to support this technology, Timos Tsokanis, chief technology & information officer, told BR. Although it has not made it public yet, Huawei Romania has invested in 5G technology, enterprise business unit director Vlad Doicaru told BR, and will implement in Romania all the parts of the 5G functionality that have successfully been demonstrated in other parts of the world.
As far as challenges go, the implementation of 5G technology, Doicaru argues, will not represent an issue. “Some challenges may appear in the spectrum allocation, but they can be solved. The adoption part is the real challenge here, and will have a longer adoption time than that needed for implementation.”
According to Vodafone Romania representatives, the massive investments needed for the deployment of 5G technology must be supported through an enhanced range of mobile services for which individuals and companies will be willing to pay, as well as rest on proper regulations, which will allow operators to deploy the new network infrastructure. “The infrastructure law has a key role here, and still needs to be adapted to the current market needs and demands. If blockages in the infrastructure development are not eliminated, the speed of the 5G network rollout will be seriously affected,” Vodafone Romania representatives argue. Orange Romania representatives share the same view and argue that completion of the methodology for the implementation of the infrastructure law is seen as a matter of major importance for the daily activity of operators, as well as for the employment of 5G technology. One of the main challenges to the deployment of 5G technologies, Orange Romania representatives further argue, is to align the telco industry in order to reach standardization and to start the spectrum auction processes. “This shall be an industry effort that will have, at its core, collaboration and the best interest of all customers,” Orange Romania said.
The transition to 5G technology is projected to become a major game changer. By building upon the capabilities of the existing networks, it will enable industrial transformation by providing wireless broadband services at Gigabit speeds as well as data connections above 10 Gigabits per second with latencies below 5 milliseconds, as well as support millions of connected devices simultaneously (the Internet of Things). Moreover, it will support the emergence of innovative business models across sectors such as health, transport, manufacturing, logistics, energy, media and entertainment, and more.
As elsewhere, in Romania, the deployment of the 5G technology is expected to impact both companies and individual consumers. What might differ will be the timing, with the former expected to reap the benefits first. “Both will make the most out of this paradigm change. Automatization will bring efficiency and will also allow consumers to experience the impact of technology in their daily lives,” Orange Romania representatives said. At end user level, 5G technology is already anticipated by the ever-growing data consumption. “Year to year we notice 4G traffic increases in our network that are multiplied four times compared to the previous years,” Orange Romania representatives said. However, although they will certainly benefit from higher speeds that will change consumption behaviors, the impact of 5G on consumers will be less relevant in the short term, Doicaru argues. “5G is not a technology necessarily translated into classic commercial telco offers for end users,” the Telekom Romanian representative explains.
However, the speed of rolling out the 5G technology country-wide and its adoption on the market will depend on the monetization possibilities. In Romania “the entire industry is still searching for 5G use cases which can be monetized,” Vodafone representatives said.