Does Europe need to up its 5GSA game?

European telcos are trailing behind China, India and the US on 5G standalone (SA) deployment. In the first half of this year, “around 2% of all speedtest samples in Europe originated on 5G standalone connections," according to Luke Kehoe, Industry Analyst, Europe at Ookla, during a panel discussion on monetizing 5GSA at NetworkX in Paris. "It was over 20% in the US, over 40% in India, and over 80% in China. So you're talking about a massive gulf in not just the actual deployment of the technology, but end user use,” stated Kehoe.

Part of the explanation for this disparity lies in Europe's existing connectivity and competitive landscape. Like most other operators around the world, European telcos kickstarted 5G deployment with 5G NSA, which gave them 5G capabilities in the RAN.

The next step of building a 5GSA network involves investing in a cloud native 5G SA core and creating an end-to-end 5G network. That doesn’t come cheaply. And although moving to 5GSA would give telcos new capabilities such as dynamic network slicing or high-order MIMO and carrier aggregation, they still have to weigh up whether customer demand currently warrants investment.

Enterprises, for example, are seen as the prime target for for network slicing. However, to succeed in this space, telcos need to be able to sell solutions rather than slices. After all, as Dr. Terje Jensen, SVP, Global Business Security Officer, Telenor pointed out during the discussion “there are not any customers asking for slices. They're asking for something else. They're asking for a product."

As Norway's former incumbent, Telenor has a strong enterprise service arm. “We don't sell private networks as such … we sell an experience to a customer, explains Jensen. "This could be a dedicated slice or a campus network, or options in between those two things. You're transforming the business process of the enterprise. This is where value lies.”

Not every telco in Europe has the enterprise service expertise, the partnerships, or the appetite, to serve the B2B market with bespoke solutions. This leaves them weighing up the consumer market for 5G SA.

The FWA opportunity

Two striking 5GSA pioneers outside of China are Jio and T-Mobile. During 2023 Jio built one of the world's largest 5G SA networks. One of its first services was 5G Air Fiber FWA, which uses a dedicated consumer slice to deliver residential broadband services. Operating in a country that lacks extensive traditional fixed infrastructure, Jio announced 7.4 million FWA customers in July this year.

The US market may have fixed infrastructure, but T-Mobile has considerable cellular capacity and has been able to prioritize network performance. This has helped it notch up 7.3 million FWA customers by offering broadband in underserved rural areas and to households served by cable in urban and suburban areas.

Europe, however, is home to extensive fiber access networks.

“In Europe, we -- at least in our markets -- haven't seen a big driver for FWA … because you have fiber,” explained Assen Golaup, Senior Manager - Mobile Access Strategy, Liberty Global. This removes an important step in building the business case for 5GSA. European telcos therefore may have to be more sophisticated in what they offer.

“You can't just go and offer the customer premium connectivity. Premium connectivity for what?” pointed out Golaup. "If you're offering a low latency slice, for example, for gaming, and as a result, that customer is able to do away with their expensive equipment that he's using at home … [they] may [be] willing to pay with more for that premium slice,” added Golaup. “Because that saves some money [on] buying equipment.”

Despite the obstacles, there are a growing number of 5GSA networks around Europe, including those of Orange in France and Romania, Sunrise in Switzerland, and Elisa in Estonia. Yet few European countries are home to multiple operators running 5GSA networks. And, as Omida points, where this is the case in Germany, the United Kingdom, and Spain, it is because authorities have put in place a mixture of fiscal stimuli and coverage obligations.

Yet customer demand is not the only reason for building 5GSA. Telenor’s Terje believes there are also sound technology reasons for European telcos to invest.

"With standalone we're looking for business use cases, but there are some technology use cases. 5G standalone is inherently a better technology. It's more efficient, it provides better latency," he said.

“There is a technology use case that everyone should be working on. Standalone is not a big bang thing. It's incremental. You can go step by step, cluster by cluster, city by city. Dynamic network slicing … is a good internal tool for managing your network resources efficient. It's about cloud native, it's CI/CD, different ways of working, especially in a brownfield operator.”