In mid-March, PubAffairs Bruxelles organised an afternoon session on the questions of 5G as a game changer in transforming business organisations and the rollout of 5G networks in Europe with Mr Pearse O’Donohue, Director, Future Networks, DG CONNECT – European Commission, Ms Susana Solis-Perez MEP (Renew/ES), Ms Hilary Mine, Head of strategy and technology, Nokia Cx and Mr Michaël Trabbia, Chief Technology and Innovation Officer, Orange.
Mr Roberto Viola, Director-General, DG CONNECT – European Commission made a keynote speech.
Mr Frank Guldentops, 5G Project Manager, Covestro and Mr Mikael Shamim, CEO, Helicus held a short presentation on 5G business cases respectively in the domains of Industry 4.0 and Healthcare.
The debate was moderated by Matthew Newman, Chief Correspondent, MLex.
Director-General Roberto Viola began his introductory speech by providing an overview of the state of play concerning connectivity and 5G within the EU. He explained how, before the pandemic, the world was supposed to be on the verge of a “digital revolution”, with connectivity and artificial intelligence (AI) at the centre of this process. However, the pandemic and the consequent accelerated transition to smart working made clear the existence of obstacles to embracing the “digital revolution”. In this regard, Roberto Viola stated that it has been evident that not only is Europe not yet fully equipped to complete the switch to digital, as a result of underinvestment in the necessary infrastructures and the lack of uptake of digital tools, but that there is also still some way to go in order for digital tools to be fine-tuned to serve the best interests of EU business and citizens. Director-General Viola further explained that, in order to overcome these challenges, the EU has made an unprecedented effort that resulted in the creation of the Recovery Plan for Europe, which aims to boost significantly the digitalisation process. For this reason, the speaker remarked, 20% of the EU-wide recovery package is allocated to digital investments, which should foster an inclusive digitalisation process throughout the old continent. Roberto Viola then introduced Europe’s Digital Decade, the EU strategy adopted by the European Commission to embrace digitalisation, which is based on four pillars. The first pillar focuses on advanced digital education and the fostering of an advanced level of skills among the EU population. In fact, the digitalisation of both the economy and society will require around 20 million digital experts by 2030, against the 7 million currently present, the speaker added. He highlighted that this process must be facilitated by educating at least 80% of the population to enable an advanced use of digital tools and to achieve gender parity in terms of employment within the digital sector as soon as possible. The second pillar of the EU strategy, the speaker continued, consists of enabling all businesses to become fully digital. He stated that only some undertakings have been making effective use of AI and big data, while the vast majority of actors, especially small and medium enterprises (SMEs), are still far from exploiting the opportunities offered by digital innovations. As the speaker pointed out, providing SMEs with the tools to embrace digitalisation will be crucial and will also require a vast amount of investments in physical capital. The third pillar of the Europe’s Digital Decade strategy focuses on public administrations, including healthcare systems. For instance, one of the goals of the strategy is dedicated to public administrations and their capacity to facilitate the interaction between citizens and public services by fostering the means to create secure, privacy-proof and interoperable digital records. As the fourth pillar, Roberto Viola drew special attention to the fact that the European Commission is aiming to provide high-speed connectivity and 5G coverage for all European citizens by 2030. He explained that the implementation of such an approach will not be linear, as the development of 5G infrastructure requires a large degree of investment and long-term commitments from all stakeholders involved. Furthermore, the speaker hinted at the fact that developing 5G in Europe will also require substantial efforts that will have meaningful societal consequences, especially for those EU countries in which connectivity is lagging behind. He explained that the Commission is planning to hold a public consultation, as the EU executive body would like to ensure that the strategy for a swift 5G rollout is the result of a comprehensive and inclusive process. Roberto Viola proceeded to state that the business model of the telecommunication sector will surely be impacted. On the same note, he stated that telecommunication companies must take the opportunity to create a comprehensive offer of services to adapt to the new situation. He noted further that the integration of edge computing and cloud services will be a crucial strategic opportunity for the European telecom sector. In addition, he stressed the importance of ensuring network security, notably addressed by the creation of the Toolbox for 5G Security, a coordinated approach between the Commission and EU Member States aimed at further mitigating cybersecurity risk. In conclusion, Roberto Viola mentioned the efforts of the Commission to secure the upcoming 6G networks. In particular, the proposal for a revised Directive on Security of Network and Information Systems, the NIS 2 Directive, has been updated with the aim of both addressing the weaknesses of the NIS Directive and making it increasingly future-proof.
After the introductory speech, two business cases were presented by Mr Frank Guldentops, 5G Project Manager at Covestro and Mr Mikael Shamim, CEO at Helicum respectively.
As a first business case, Frank Guldentops presented Covestro, one of the leading European polymer producers which is aiming to drive sustainable growth, while expanding digital innovation. He described the transformation that the company is undertaking in order to accelerate digitalisation and creating a more efficient and sustainable environment. Furthermore, the speaker explained that Covestro is participating in a 5G-based pilot project with Orange which grants access to all information regarding a specific production asset by scanning a QR Code. While stating that 5G will bring about valuable transformations in this industrial sector as a whole, Frank Guldentops provided a business case stemming from the chemical industry by explaining how 5G would create a safer and more efficient work environment by providing remote field control to workers thanks to faster communications and high-speed connectivity. In addition, he stated that new technologies, such as augmented glasses for operators, are being developed and they will be used through voice-controlled hand-free wearable equipment. He specified that this process would allow much safer conditions for workers and more precise and efficient operations. Nonetheless, he added that despite the valuable increment in efficiency and scale of operations, 5G will require dedicated devices and specialised operators. Given this context, he concluded, fostering investments in the sector, developing digital skills and creating specialised workers should be a priority in every EU strategy aiming at fostering digital innovation in Europe.
The second business case was presented by Mikael Shamim, CEO of Helicus, a company which is developing a platform for the delivery of medical supplies via drones. The speaker began by explaining the importance of this kind of operations. Indeed, the increment and the population ageing in several advanced countries are changing the needs in terms of healthcare efficiency as Europe’s demography is putting a heavy toll on the healthcare sector, whose costs have been rising dramatically over the last decades, he continued. In order to reduce costs and increase productivity, the speaker explained that there has been a multiplication and centralisation of healthcare facilities, such as laboratories and blood banks, grouping them away from hospitals. However, while this process resulted in a more efficient use of space, there are often severe inconveniences when hospitals require urgent medical supplies or test results and delays in the delivery though traditional means of transport occur. Despite the criticalities of the supply chain being already known, the pandemic has exposed these phenomena further. Given this context, the mission of Helicus has been calibrated in order to overcome these obstacles by exploiting less traditional forms of transport, such as drones, to avoid traffic congestions, improve operational efficiency in the supply chain and reduce the carbon footprint. The speaker went on to explain in more detail how the operations will work. In the scenario portrayed by Mikael Shamim, the command and control centre (C2C) acts as intermediary between the hospitals and the other concerned premises. The role of the C2C is to mediate the communications between medical and the logistic operators, while dispatching drones for the delivery and guiding them over populated areas. In this regard, the speaker highlighted the significant improvements that 5G technology would provide to these operations. In fact, C2Cs will require high-speed connectivity to maintain robust communications among the operators and improve the reactivity of the commands. More specifically, 5G will provide low latency and more efficient mission control, while a larger bandwidth will allow constant video monitoring and visual flight backup. Finally, Mikael Shamim remarked the importance of securing the connections in order to prevent operations being object of malicious attacks.
Matthew Newman proceeded to introduce the rest of the panel and began the discussion by asking the speakers to provide their views on the importance of a swift rollout of 5G in Europe. He also questioned them on the potential benefits of this new technology for the European economy, competitiveness and society on the whole.
Pearse O’Donohue began by emphasising three elements that should occur for a rapid development of 5G. In the first place, he highlighted the need to transform the business model and the economy around the centrality of investments and investments’ incentives. In fact, while acknowledging the importance of fostering investments in the digital sector in order to speed up the digitalisation process, he stressed the necessity for businesses and industry to be prepared to fully embrace the opportunities offered by this new wave of innovation. He also observed that 5G applications will go beyond the very technological sector, offering valuable advantages for industry as a whole by developing new working methods and increasing productivity. Secondly, 5G-based technologies should reduce the overall European carbon footprint. This process will occur both indirectly and directly, such as in the agricultural and logistics sector, by incrementing efficiency and precision of operations with a reduced use of resources. Lastly, 5G will find several applications that should improve social life in its entirety. As previously mentioned in one of the business cases, healthcare and telemedicine can set an example since innovative technologies can potentially open new frontiers in the medical assistance to citizens, while responding to the needs of an ageing population. In addition, Pearse O’Donohue highlighted the advantages coming from the development of connectivity, which would allow the creation of smart and interconnected cities able to offer a variety of integrated services to citizens and thereby improving their quality of life. The speaker further stressed the importance of enabling all citizens to be connected in order to allow everyone to embrace the digital revolution. Indeed, he concluded, providing high-speed connectivity to the whole European population is one of the ambitious goals that the Europe’s Digital Decade plan is aiming to achieve by 2030.
Susana Solis-Perez MEP answered the question by highlighting the watershed moment Europe is currently experiencing, with special regard to both the debate on the EU strategic autonomy and the dependency on non-EU actors for technology development. In fact, she continued, achieving the question of the European strategic autonomy has been at the centre of an intense political debate within the European Parliament. The MEP subsequently explained how the current state of play constitutes an impediment to the development of 5G technologies in Europe, as well as a barrier to the competitiveness of the EU technological sector on a global scale. As a result, through several policy initiatives such as the EU toolbox for 5G, the EU is trying to maintain a diverse and sustainable supply chain in order to avoid long-term dependency on foreign markets, she explained. Indeed, securing a certain degree of control over innovative technologies will be fundamental for the development of 5G which, she remarked, will be the precondition for initiatives such as the fostering of smart cities and the advancement of the healthcare system. In this regard, she highlighted the importance of the Recovery Plan for Europe to foster the consistent amount of investments needed in order to close the gap between the EU and other countries, such as the US and China. Nonetheless, the MEP also highlighted the necessity for a just transformation of the economy and society, for which the Cohesion Policy for 2021-2027 will be crucial to provide connectivity to isolated and rural areas. The MEP continued her speech by stating that, despite the importance of investing in new technologies and cybersecurity, the new Multiannual Financial Framework (MFF) and the Next Generation EU instrument will have to address societal questions, as well. In fact, given the deep impact that these technologies will have on the economy and society, the EU will have to make sure that no citizen is left behind, thus operating a massive development of digital skills among the population. In conclusion, the MEP called for clear results about 5G safety for human health in order to dissipate concerns among the population and avoid potential future impediments to its rollout.
Hilary Mine started her speech by quoting the white paper recently published by Nokia, The Big Inversion, which addresses the evolution of the digitalisation trend as a consequence of the Covid pandemic. The study explores how digital industries such as online retail, media and banking have already realised much of their digitalisation potential, but other industrial sectors, such as manufacturing, healthcare, transportation, logistics, mining and energy utilities have been lagging behind significantly. The study shows that, to date, the ratio of information and communications technology (ICT) investment between digital and physical industries is 7/3, even though the proportion of their respective GDP contributions is 3/7. More specifically, the study predicts a “big inversion”in ICT investment in physical and digital industries is approaching, driven by this emerging set of 5G+ technologies. This inversion will restore the parity in ICT investment between the amount these industries invest in ICT and their respective contributions to overall global GDP and workforce employment. Hilary Mine subsequently expressed her opinion on three actions that should be considered during the digitalisation process. First, while expressing appreciation for the objective of allocating 20% of the Recovery and Resilience Facility Instrument (RRF) as investments for digitalisation and research, the speaker called for measures that will ensure that the investments are actually used in a productive and sustainable way. In addition, she reiterated the importance of placing SMEs, which notably represent 60% of the European economy, at the centre of the digital transformation. As a further point, the speaker exhorted EU Member States to find more regulatory incentives to foster private investments in the sector by reducing barriers to network deployment and by avoiding overregulation. Lastly, Hilary Mine called for a consolidation of telecommunications operators. In fact, she concluded, the deep fragmentation of the sector within Europe needs to be addressed in order to make the EU more competitive in this field.
Michaël Trabbia began by pointing out the duality of the benefits coming from the fast development of 5G in the EU. On the one hand, 5G will enable massive improvements across multiple businesses and industries, contributing to scaling up European competitiveness. On the other hand, 5G will contribute to the creation of millions of jobs and it will prove critical for business-to-consumer (B2C) communications, while providing high-quality networks to consumers. Furthermore, Michaël Trabbia explained that emerging 5G networks and the “internet of things” (IoT) allow the deployment of technology in ways that protect the environment and promote long-term sustainability. As has emerged from the business cases presented, 5G can unlock multiple possibilities for public administrations and increment efficiency in several industrial sectors. Moreover, 5G technologies could reduce the energy consumed in the telecommunication sector, allowing this domain to take further steps towards the zero-carbon emissions goal.
Moving towards the second part of the discussion, Matthew Newman questioned the speakers on the harmonisation of the spectrum of 5G for industries. In addition, the moderator asked the speakers to provide their opinion about the importance of network sharing to avoid fragmentation.
Pearse O’Donohue started his reply by focusing on the harmonisation of the spectrum bandwidth for European industries. To clarify the current state of play, he took the example of Germany where regulators reserved a specific band of the spectrum for local industries, commonly referred to as campus networks, in a context where wireless connectivity is increasingly becoming a necessity for business-critical services in industrial processes, such as those related to assembly lines. Indeed, several industries, commonly referred to as “verticals”, would prefer to obtain access to the same harmonised spectrum that mobile operators use in order to benefit from the mobile equipment ecosystem and lower rollout costs. Pearse O’Donohue explained that this initiative could be understood to present a number of advantages for large industry, as companies with several production sites can use the same spectrum for their operations. Considering the fact that the spectrum is a scarce resource, however, this choice may present inefficiency in terms of reuse, and also poses significant risks to wider mobile services, most notably slower 5G networks and reduced coverage. Furthermore, he clarified, the European Commission is reluctant to over harmonise the spectrum and force the Member States to adopt specific measures, as it will impose a rigid plan for operators and potentially delay 5G deployment. Due to the heavy economic effects that the pandemic has had over the past few months, the speaker explained the precarious situation that the EU is currently facing, as several Member States would be tempted to operate choices in the sector that maximise revenues. In this regard, he highlighted that the deployment of 5G must be operated with a long-term vision of recovery instead of favouring immediate and temporary gains. Pearse O’Donohue concluded by pointing out that licensing the spectrum and facilitating the rapid rollout of 5G will be more viable options to boost the economy, to effectively achieve recovery goals and to make the economy more resilient to future shocks.
Michaël Trabbia emphasised the competition aspects of the question of 5G by bringing attention to network-sharing operations. He explained that the deployment of 5G is widely known to be extremely expensive and difficult to operate in the absence of vast amounts of capital and investments. Consequently, network-sharing agreements have become increasingly widespread in mobile telecommunications markets. He further stated that this option greatly facilitates deployment and may result in better and larger coverage and both added capital and operating cost savings may be significant, making it an appealing choice for smaller operators. However, the speaker also said that network sharing could potentially carry consumer harm and lead to anticompetitive behaviours. Michaël Trabbia went further into detail by saying that network sharing could be a fundamental component for the effective deployment of 5G in the EU and he called for more legal certainty concerning these operations, as they require long-term engagement between parties with potentially divergent strategies and interests, as well as a valuable amount of investments. As a result, he concluded, without legal clarity on these matters, operators may not be incentivised to use this tool if it can lead to long and unforeseen antitrust cases with the EU.
Hilary Mine agreed on the fact that network sharing, despite not being the only option for operators, should be promoted and be given more legal certainty in order to foster more private investments. To support her statement, the speaker explained that this procedure is especially relevant in Europe where network sharing could be the only viable option for small countries, such as in the Baltics and in the Benelux. In fact, several EU Member States lack the economic possibilities to support multiple mobile operators. As a result, a joint action from multiple actors might be necessary. However, she also pointed out that, in the absence of clear rules concerning network sharing, the private sector is not incentivised to rapidly mobilise investments and that this process could delay the rollout of 5G, especially in smaller countries, and broaden the gap between Member States.
The moderator moved the focus of the discussion by asking the speakers about their views on safety and environmental concerns that have emerged regarding 5G technologies.
Susana Solis-Perez MEP stressed the importance of dealing with these kinds of concerns which have been rising among EU citizens. The debate as to how to prevent online disinformation, she stated, has been a centre of discussions inside the Parliament and the relevance of the subject pushed the European Commission to take action. This process has been evident in the plan for shaping the Europe’s digital future, which includes an action plan to tackle online disinformation to ensure the protection of European values and democratic systems. However, the MEP also called for more independent scientific assessments to ensure the safety of new technologies. Indeed, the EU should also act to make citizens aware of the functioning of innovative technologies, both to dissipate their fears and to provide the adequate digital skills, which will be increasingly fundamental in a digitalised economy and society.
Mikael Shamim expressed his opinion by highlighting the relevance of public opinion for sectors such as healthcare. In particular, he explained that addressing public concerns is crucial, given the importance of healthcare for citizens and the sensible data treated in these operations. On the same matter, and given the very nature of this domain, the speaker explained that ensuring an adequate level of cybersecurity for 5G must be the priority not only to prevent malicious actions, but also to increase public trust towards innovative digitalised options. Mikael Shamim went on to point out that 5G energy efficiency will cut costs, improve decision-making with data insights and provide the ability to connect almost every device across vast distances, offering control over hard-to-reach facilities to prevent life-threatening events. In addition, he stated that telemedicine requires a network that can support real-time, high-quality video, which often implies the use of wired networks. With 5G deployment, healthcare systems can enable mobile networks to handle telemedicine appointments. Indeed, he specified, when healthcare systems utilise this technology, patients can often be treated sooner and have access to specialists otherwise not available. In his conclusion, the speaker remarked upon the necessity of clear standards and harmonisation between applications to facilitate operations for companies that are active in several Member States.
Frank Guldentops reiterated the importance of ensuring the highest levels of security to ensure the safety of all data transfers, communications and networks stability. He explained how 5G can fulfil energy goals both by improving energy distribution within a smart grid and by adding remote monitoring of decentralised renewable energy sources. In addition, smart sensors and 5G power generation can achieve more network stability, allowing for more reliable electricity production and consumption. In addition, the speaker also pointed out the potential benefits for the industrial sector, since 5G is expected to interconnect a massive number of embedded points, thanks to the ability to scale down data rates and transmit data much faster through new protocols with lower power consumption. This process will allow users to control, support and monitor equipment with a high degree of precision and improve considerably the efficiency of operations in specific fields, such as the chemical industry.
Pearse O’Donohue continued the discussion by describing the problems that the European Commission is facing with the European public opinion and the acceptance of 5G. He added that the EU is currently lagging behind other countries in providing 5G coverage, reaching 24% of the population by the end of the last September, against the 76% in the US and 93% in South Korea. Indeed, the speaker explained, there have been cases of strong opposition to the expansion of 5G networks in Europe. This fact led to a substantial delay in the 5G rollout also due to the fact that public authorities in the Member States are often reluctant to license the spectrum in order to avoid political repercussions. The speaker went into detail about health concerns regarding 5G technologies by explaining that several independent studies have proven the safety of 5G. More specifically, he mentioned a study carried out by the International Commission on Non-Ionizing Radiation Protection (ICNIRP), which demonstrated that 5G actually ensures reduced electromagnetic fields (EMFs) exposure, making it safer for human health. In addition, he stated that fully implementing 5G will allow the removal of outdated repeaters for 2G and 3G, which are considerably more energy consuming. The speaker continued by referring to the improvements that 5G will bring for cybersecurity, as it will allow a higher level of coding and masking of signals, features which are critical for the security of the data transmitted across the network. Pearse O’Donohue subsequently highlighted the importance of the Multiannual Financial Framework and the Digital Europe Programme, both indispensable to providing the conditions to attract investments. This goal, he added, would otherwise be difficult to achieve, given the very difficult market conditions for the industry. However, he also specified that these strategies are not only aimed to incentivise mobile operators, but also the financial players they rely on. Pearse O’Donohue subsequently mentioned the importance of having European networks linked to edge computing, as it will be essential in the future of telecommunications. Pearse O’Donohue concluded his remarks by stating that, despite the delays in the deployment of 5G compared to other countries, the EU currently has the lead in terms of industrial applications. For this reason, these technologies should be viewed as a means to ensure the economic recovery and strengthen the European resilience in all sectors.
Michaël Trabbia pointed out the necessity of having clear and transparent discussions concerning 5G safety in order to dissipate fears among citizens and to avoid potential political barriers during the deployment. Indeed, the EU has witnessed sometimes extreme actions taken by citizens against 5G structures in countries such as France or Belgium, which further delayed the implementation of high-speed connectivity. However, the speaker added that, thanks to transparent dialogues and the publication of additional assessments, citizens are starting to understand the immense benefits that these technologies can bring, a fact which has led to a smoother deployment process. In addition, Michaël Trabbia referred to the potentialities of Open Radio Access Network (O-RAN) in supporting the evolution of 5G networks. Originally implemented through a closed architecture, the RAN traditionally locked operators into the same vendor for both their radio and their baseband units. In contrast, O-RAN benefits operators through its emphasis on intelligence and on open interfaces and standards, a fact which encourages multivendor deployments and facilitates customisation to suit individual operators’ needs. He added that the O-RAN Alliance considers it as the final piece of the unbundling puzzle that enables mobile network operators to use equipment from multiple vendors and still ensure interoperability. The speaker then exhorted all actors to grasp this opportunity in order to create a strong European ecosystem and to avoid dependency on foreign technologies. He brought the debate to a conclusion by saying that this will be a crucial step towards the European strategic autonomy as a fundamental matter to ensure the block’s digital future.
The remaining part of the debate and the Q&A session covered the following issues: whether to prioritise the development of 5G or providing basic infrastructure; generating the energy required for edge technology in a sustainable way; the role of foreign companies essential for a quicker deployment of 5G technology in the EU; accelerating the 5G rollout in Europe while preserving the EU’s competitiveness and sovereignty; the creation of the optimal regulatory framework to provide the broadest possible access for businesses to data; the necessity of linking new privacy challenges to 5G in the new ePrivacy Regulation.
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