The operators are unwilling to make major investments in an uncertain economic environment, but the government wants to hold the last major spectrum auction before 2023
The deployment of the technological manna that the new 5G mobile networks will bring will have to wait longer than expected, at least to enjoy its main features. The current mismatch between political and business interests, coupled with a looming economic crisis threatening a recession, is a major obstacle.
In Spain, the government has ignored requests for postponement from the major operators, who asked to wait until 2024 due to insufficient demand – in the first quarter of this year, only 0.02% of traffic on mobile broadband networks was 5G – or at least in the second half of 2023. So, barring any last-minute surprises, it will hold its last major spectrum auction before the end of the year.
In late September, it launched a consultation on the bases that will regulate bids for 12 state concessions and a further 38 regional concessions in the 26 GHz band, a priority for the rollout of 5G in Europe. They are concessions for 20 years, renewable like many others, and the Ministry of Economy plans to get about 140 million euros for them, although the starting price will be about 105 million.
It doesn’t seem like a big fundraising company, although it’s worth remembering the puncture it suffered during the previous auction for 5G networks – the next one will be the fourth – and whose spectrum prices the ‘telecos’ deem sufficient for the current reality. In July 2021, the 700 MHz band was put out to tender and only three bidders were present: Telefónica, Orange and Vodafone. The government set a global starting price of 995.5 million euros, which it said was relatively moderate, but ended up only 1.5% more.
Given this bad experience and the doubts of the operators, who are now more aware of the merger process – the Orange-MásMóvil union in Spain and between the latter’s Portuguese subsidiary and Vodafone in neighboring Portugal are under the scrutiny of the competition authorities – and possible new business operations, why isn’t the Executive making his deadlines more flexible? José Antonio Morán, director of the UOC’s Telecommunications Technology and Services Engineering Degree, points out the European Union: “Digitalization is part of the recovery plan pledged to Brussels to use the European funds received by covid.”
On the ‘telecos’ side, this expert’s reading of his position is also economic. According to Morán, “Industry will be one of the sectors that will benefit most from this commitment – in the new auction a part is reserved for private companies from different sectors to rent directly – as large groups can develop their own private network projects and the digitizing their production centers, something that could make the final price of the lots more expensive for the operators.» In fact, they believe that other actors associated with the operators of telephone towers (such as Cellnex) will also enter the fray.
In any case, the interest of these companies in the 26 GHz band is understandable. Also known as millimeter wave or 5G mmwave, it has less coverage (signal propagation is less), although it has a higher transmission capacity and very low response times. In this sense, Javier Arenzana, partner in charge of telecommunications at KPMG Spain, believes that “true 5G, with all its advantages, will first reach these applications for businesses through the deployment of virtual private networks.”
While the government doesn’t specify that ‘fine print’ when it predicts that 75% of the population in Spain will have 5G mobile network coverage by the end of the year, the truth is that most of this implementation is already supported by 4G. infrastructures and the radio only partially change (pure data transmission). It’s called 5G NSA (‘Non Stand Alone’) and experts see it as more “an evolved 4G that still doesn’t deliver all the benefits of true 5G and doesn’t significantly change users’ lives,” Morán says.
“There is still a long way to go to achieve that ideal 5G that they have painted for us,” warns Ángel Barbero, professor at EAE Business School and director of digital consulting firm Nateevo, who believes “earlier forecasts will most likely be violated.” The real 5G, the ‘Stand Alone’, requires major investments: the government requires the operators to spend 14,300 million euros, against 482 million public funds, so that by 2040 53% of the population will have access to the full 5G.
But apart from the still uncertain profitability of this bet, the ‘telecos’ have another problem. The 5G cybersecurity law provides a list of high-risk providers that the government has not yet finalized. It would be Chinese companies such as Huawei and ZTE – although the ministry will not publish it for security reasons and will only inform those affected – with which it will not be possible to work on 5G networks and, moreover, equipment installed years ago will have to be replaced by their components (a large part of 4G), with the resulting additional costs (more than 1,500 million euros).
Only four years have passed since the launch of 5G technology, which is still in the first phase of implementation, and work is already underway to replace it: 6G. The big technology companies are doing it, but so are the governments.
A priori, the new networks would not imply a revolution in instruments, but they would come within reach by multiplying the speed of data transmission in wireless networks. It aims to be up to ten times faster than 5G, with a data download capacity of one terabyte (TB) per second and a data transmission latency that would be only 10% compared to its predecessor.
The first studies on this technology started in 2019, almost simultaneously with 5G; not for nothing, for some experts it is the “much improved” extension of it. And while it may seem premature, the deadlines match: standardizing 3G connections took 15 years, 4G took 12 years, and with 5G it is expected to be nearly a decade.
South Korea is one of the most determined countries: it hopes to launch its pilot project in 2026 and bring the new technology to market three years later. China remains discreet, although its giant Huawei planned to launch two satellites for 6G testing. In Europe, Germany and France are the most advanced, although they don’t expect results until the end of the decade. And in Spain, in August, the government launched a call for research projects – with €116 million in aid – including 6G and 5G+, an advanced but intermediate step that is gaining momentum and should be ready in 2024.
Cloud computing and artificial intelligence would be enhanced by 6G, which will make way for new service capabilities. For example, extended reality (XR) will make it possible to transmit high-resolution holograms via smartphones, remote operations will eliminate latency and online communication between machines (M2M) will be consolidated.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
