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The study considers four possible scenarios, which are driven by factors such as evolving technology, standards readiness, and Radio Access Network (RAN) disaggregation initiatives. Economic, technological, environmental, and societal impacts are analysed for each scenario, covering key European Commission and stakeholder concerns.
The importance of 5G infrastructure, its fast roll-out, technological capabilities, and European leadership for the supply side of 5G infrastructure has been highlighted by the European Commission in various initiatives. These include the Communications ’5G Action Plan for Europe’ and ’Secure 5G deployment in the EU: Implementing the EU toolbox’. However, although Europe is home to 2 of the 3 major equipment suppliers and world leader in 5G trial investments, overall commercial infrastructure investments lag behind other regions. In addition, Europe’s vertical industries are only just starting to identify valuable 5G business cases. Equipment providers are facing challenges to sustain their competitiveness whilst new architectural offers like open radio access networks (Open RAN) are emerging on the market.
The study therefore provides an analysis of plausible developments of the 5G equipment and services supply market looking to 2030. The study identifies the following 4 scenarios:
- Incumbent players driving 5G: In this scenario, traditional vendors and Mobile Network Operators (MNOs) are shaping the ecosystem pulled by increasing demand for new services requiring high performance. Equipment from providers considered as ‘high risk vendors’ is used in non-sensitive areas only. Further opening of interfaces stimulates new equipment suppliers, which represents an opportunity for MNOs.
- Slow pace of 5G Roll-Out: In this scenario, market competition remains the same or even decreases due to the exclusion of vendors because of geopolitical motivations and/or security concerns. Due to the low uptake of business-to-business (B2B) use cases, the overall 5G market size does not expand in Europe and the slow 5G rollout does not provide opportunities for new vendor solutions to be scaled in the short term.
- Open RAN as a game-changer: In this scenario, Open RAN is a deep game-changer in the 5G supply chain with new players (mainly non-European, even with the possibility of GAFAMs coping this network segment) entering into the European RAN market. In this scenario, decentralized, disaggregated and fully virtualized Open RAN networks may serve Europe. Technological progress is potentially stimulated in the medium and long term, mainly due to increased market competition and new suppliers in the RAN domain.
- 5G for Big Tech: In this scenario, network virtualisation and disaggregation of software and hardware change the landscape for network equipment, deployment and service provision in the long term. New business models based on Open RAN architectures and interfaces gain momentum, and new major players enter the market. In this scenario, foreign Big Tech companies increase their overall dominance in the European market on demand and supply sides alike.
Economic, technological, environmental, and societal impacts are analysed for each scenario, covering key European Commission and stakeholder concerns, including market competition, costs, cybersecurity, energy efficiency, and standards requirements.
Based upon the results of the scenario impact analysis, the study identifies policy options to facilitate the evolution of a viable 5G ecosystem in Europe. Establishing a viable 5G supply ecosystem requires a combination of system-oriented policy measures, which aim to mitigate risks of the scenarios on the one hand, while on the other hand seizing their long-term opportunities. The policy measures should ultimately contribute to the following overarching goals:
- the development of an open and secure 5G ecosystem throughout Europe in the long run, including mobile network operators (MNOs), incumbent and new European vendors and software providers including open-source communities, and European users from vertical industries;
- the European digital autonomy and technological sovereignty in a strategic domain via the support of collaboration between new and traditional vendors, and a strong approach towards open specifications in the 5G ecosystem.
The study has served to get a better understanding of the different initiatives on open and disaggregated architectures in the network infrastructure and their impact from different angles as technical or geopolitical. The European Commission expects that the results of this study will help as a policy support for the future, enabling the Commission to better target further action to foster the European 5G ecosystem.
The report can be downloaded in English and French below.