5 th generation (5G) of communication networks

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1 5 th generation (5G) of communication networks Nokia Government Relations policy paper Page 1 Nokia Government Relations policy paper

2 Background The European Union had an early lead in mobile technology in the 1990s, in particular in 2 nd generation (2G) of mobile networks, called GSM. In the 4 th generation (4G) of mobile technology, known as Long-Term Evolution (LTE), Europe lags behind other leading markets in investments in network deployments. This is a threat for Europe, given that 4G R&D and global standardization was significantly influenced by European industry and collaborative research and roll-out is a precondition for the 5 th generation of communication systems (5G). It is a threat not only for the telecom sector, it jeopardizes the short- and long-term success of the entire industry of Europe, as telecom infrastructure and 5G are the basis for the Internet of Things (IoT) and Industry 4.0 (the Industrial Internet). Europe s leading know-how and collaborative culture are assets in complex, interoperable mobile technology. While Europe leads in 5G technology development and standardization, Europe needs to regain its lead in the deployment of new communication systems in 4G/LTE as well as 5G itself, which will emerge 2018 (first pre-standardized network trials with pre-commercial hardware) and 2020 (first networks with commercial hardware). This requires a very ambitious pan-european target that could galvanize Europe s telecoms industry. In order to make this a European reality, the EU needs to act immediately. What is at stake for Europe? Jobs & growth. 5G is a key technology for the entire European industrial base all vertical industries will be effected (e.g. car industry, logistics, health care). Innovation. Innovation will help to prepare for the next phase of industrialization and societal innovations. Research. 5G reinforces European lead, in particular in ultrafast broadband and Internet of Things (including massive and critical machine-type-communication (MTC)). Investments. Early lead would boost a positive investment cycle. Harmonization. Europe could be in a position to lead in building a globally harmonized standard. Page 2

3 Why 5G matters for citizens? Demand. Consumers generate an increasing amount of mobile traffic, which necessitates more capacity and lower latency. 5G will offer an expected peak data rate higher than 10 Gbit/s compared to the 450 Mbit/s LTE can offer today, combined with virtually zero latency, i.e. less than 1 ms, meaning that the radio interface will not be the bottleneck even for the most challenging use cases. Societal innovations. 5G will support applications and industries of today and the future such as innovative health care services, self-driving cars and next generation of industry automation disrupting and renewing entire industries. 5G will mean stepping away from best effort towards communication with highly increased reliability. Flexible integration of existing access technologies such as LTE and Wi-Fi with new technologies creates a design that is future proof at least until 2030 by re-using legacy investment. Internet of Things. 5G will be designed for use cases expanding from humans to machines requiring more of networks. 5G supports the huge growth of machine-to- machine type communication, also called Internet of Things, through flexibility, low costs and low consumption of energy. At the same time, 5G will be reliable and quick enough for even mission-critical wireless control and automation tasks such as self- driving cars. Energy and cost. 5G will yield lower costs and consumption of energy. Energy efficiency is an integral part of the design paradigm of 5G, not an afterthought. Virtualized and scalable technologies will further facilitate global adoption. Page 3

4 Challenges Harmonization. Various 5G initiatives compete to lead the definition of 5G: EU s 5G PPP (or 5G Public-Private-Partnership), the flagship initiative under Horizon 2020; China s IMT-2020 (5G) Promotion Group; the Japanese 2020 and 5GMF (or The Fifth Generation Mobile Communications Promotion Forum), Korea s national research program supported by 5G Forum; Russia s 5GRUS program; and USA s 5G programs sponsored by the National Science Foundation. Harmonized and affordable spectrum. More harmonized and affordable spectrum is needed to meet the capacity and coverage needs of 5G, in particular for communities beyond the reach of wired broadband. Less than half of EU Member States allocated 800 MHz for mobile broadband in time using existing policy instruments. Now a decisive and coordinated EU release of 700 MHz is needed. In the future 5G will need additional spectrum above 6 GHz. Lack of investments in deployment. In 2015, 13% of total connections have been LTE (4G) connections in (geographical) Europe, compared to 47% in Japan, 51% in Northern America and 84% in South Korea. Additionally, Europe reached 70% 4G network coverage (by population), whereas Northern America reached 98%, Japan 99% and South Korea 100%. Europe needs a healthy operator ecosystem with operators of all sizes, including big operators that can compete internationally. In addition the historic dichotomy between electronic communication services and information society services, combined with heavier regulation of the former, is a contributing factor to the lack of investment and creates an unlevel playing field. While the European Commission digital single market plans might potentially solve the issue, its implementation comes far too late 1. Europe has an urgent need for conditions that boost investment in LTE roll out. Investments in LTE support future investments in 5G. Net Neutrality legislation. Implementation of the EU legislation on Net Neutrality should allow operator innovation with specialized services everywhere in Europe under the same regulatory conditions. Furthermore, critical machine-type-communication (MTC) will require high benchmarks for Quality-of-Service (QoS), beyond what can be achieved with a best-effort approach. Virtualization, telco cloud, big data and analytics are emerging key technologies enabling service agility, scalability, and efficiency of mobile networks. 5G networks will need to take full advantage of these technologies in order to deliver on the expectations towards 5G. Investment in 5G standardization will be worth billions of Euros for infrastructure vendors. If infrastructure vendors do not see a profitable return on investment for standardization through licensing fees on IPRs they are more likely to opt for proprietary innovations. 1 EC Legislative proposals to reform the current telecoms rules in 2016; implementation likely towards the end of the decade. Page 4

5 Recommendations for policy makers Continue to push 5G as a main driver and prerequisite for the Digital Single Market in Europe and its flagship initiative. Coordinate between EU level and regional research initiatives. Leverage EU s 5G PPP initiative for active collaboration with industry, small and medium-sized enterprises and research community. We propose a clear and ambitious timeline for the European road to 5G to galvanize Europe s telecoms industry: 2018 A major European event equipped with pre-standardized 5G networks with pre-commercial hardware on the event sites (e.g. Eurovision Song Contest, Champions League Final or European Athletic Championships) UEFA 2020 with 5G networks with commercial hardware in several involved European cities (like London, Munich, Rome, Amsterdam and Copenhagen) 2025 All major European traffic routes are equipped with 5G networks, in order to enable the connected car and train European ambition should be to lead and not to follow on the road to 5G. Continue to negotiate on international level, in order to achieve a globally harmonized definition and standard for 5G. Create new policy instruments for a quicker allocation and assignment of affordable spectrum and prepare to allocate additional frequency spectrum. Europe should be the early mover in planning and allocating future spectrum for mobile broadband below and above 6GHz in order to allow early testing and piloting in Europe. Boosting investment immediately should be the overriding goal today and for the forthcoming overhaul of the telecom regulation. Competition rules should allow more market driven consolidation within and between Member States. Implementation of EU legislation on Net Neutrality should allow innovation in all stages of the value chain by offering specialized services, many of which have not been invented yet. Specialized services, together with proper traffic management, incentivize optimum capacity rollout. They increase, therefore, investments in networks and contribute to an upward spiral of increasing economic activity. Data protection regulation should facilitate the transition to information centric networks based on telco cloud, by allowing flexible collection and use of network-internal data, while respecting data privacy and data protection requirements. 5G necessitates a strong and vibrant standardization system that incentivizes companies to continue investing in innovations for inclusion in open standards available to all. For this to continue, regulation and policies need to foster efficient licensing of standard essential patent (SEP) portfolios on a global level and consequently provide innovators with an adequate return on investment. Page 5

6 For further information, please contact: Leo Baumann Head of Nokia EU Representative Office Arne Deubelius Head of Government Relations Germany Werner Mohr Head of Research Alliances Chair of the Board of 5G Infrastructure Association Peter Merz Head of Radio Systems On the Internet: Page 6

7 Public Nokia is a registered trademark of Nokia Corporation. Other product and company names mentioned herein may be trademarks or trade names of their respective owners. Nokia Nokia Solutions and Networks Oy P.O. Box 1 FI Finland Visiting address: Karaportti 3, ESPOO, Finland Switchboard +358 (71) Product code C R EN Nokia Solutions and Networks 2015

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