More Investment in Advanced Forms of 5G Will Unlock New Use Cases and Monetization Opportunities in Europe's Mobile Economy

"Digital infrastructure has been at the heart of social and economic progress in Europe for the better part of the last three decades. Today, nearly half a billion people across Europe are connected to the mobile internet, predominantly through high-speed 4G and 5G networks," according to GSMA's annual report on Europe's mobile economy.

The report points out that "[m]obile technologies and services now generate around 5% of GDP across Europe, a contribution that amounts to almost €1.1 trillion of economic value added. 5G, in particular, is expected to benefit most sectors of the European economy, adding around €164 billion of economic value by 2030. However, achieving further growth beyond this will be challenging within the constraints of the current regulatory environment."

The GSMA importantly notes that "Europe is at a crossroads in the development of crucial digital infrastructure, with key network-performance and consumer adoption metrics showing that it is falling behind some of its global peers. This underlines the need for urgent action by the European Commission and other authorities to implement critical policy reforms to ensure that Europe's digital economy – underpinned by strong, sustained network innovation – can re-establish a leadership position in the global tech race by 2030."

Below are the key trends shaping Europe's mobile ecosystem:

• The focus shifts to 5G standalone and 5G-Advanced. "By the end of 2024, 5G accounted for 30% of mobile connections in Europe, equivalent to over 200 million connections. However, 5G has not yet materially altered mobile revenue growth, which remains low in most European markets. Shifting investment to more advanced forms of 5G, particularly 5G networks based on the standalone (SA) architecture, as well as 5G-Advanced, will be important to unlock new use cases and monetization opportunities. However, this investment will not occur automatically, and issues that limit the mobile sector's capacity to invest will need to be addressed first."
• GSMA Open Gateway gains traction. "As of December 2024, 67 operator groups had signed up to the GSMA Open Gateway initiative, accounting for 75% of mobile connections globally. The geographic breakdown of operator commitments indicates regions at par, above or below their established market share. Europe is a leading region, with committed operators representing more than 20% of GSMA Open Gateway commitments despite accounting for around only 10% of mobile connections. Many of the early API launches in the region have focused on fraud prevention and security, using SIM Swap and Number Verification APIs. These represent easy wins, given the ever-present risks from fraudsters and breaches for operators and their customers."
• Driving AI transformation responsibly. "European operators are leading the way in generative AI (genAI) adoption, with a strong emphasis on network optimization, security and enhanced customer service. Mobile operators are catalyzing genAI innovation through strategic partnerships, exemplified by Telefónica's collaborations with technology partners, as well as Deutsche Telekom's development of telecoms specific large language models (LLMs) with the Global Telco AI Alliance. To foster responsible AI, operators are prioritizing ethical AI practices to ensure fairness, protect users and reduce inequalities. The EU's AI Act sets regulatory standards for responsible AI, while the GSMA's Responsible AI Maturity Roadmap offers a framework for ethical AI use."
• Momentum builds behind aerial connectivity. "Terrestrial networks remain the primary form of connectivity, supported by the wide area coverage of wireless networks and the mass production and adoption of mobile devices. In recent years, however, technological advances in various satellite and other non-terrestrial networks (NTNs) have helped to overcome several limitations associated with aerial connectivity. Recent developments suggest that European authorities are taking steps to keep up with their global peers in the development and application of satellite connectivity, as a complement to terrestrial-based mobile connectivity services. Recent examples include the award of a contract to the SpaceRISE consortium to develop, deploy and operate the IRIS constellation, as well as the emergence of new players across the European satellite ecosystem."

Infographic: GSMA Intelligence

The GSMA also presents a list of recommended policy reforms that will lead to increased investments in digital infrastructure that "will not only be felt across the telecoms and technology sectors but across every other industry as well":

• Re-evaluate the existing regulatory framework that was conceived 20–30 years ago, and update the policy objectives and principles to match today’s market realities and challenges.
• Implement additional measures to ensure fairness in the internet value chain by defining an obligation on content and application providers (CAPs) to negotiate with internet service providers (ISPs) on the terms and conditions for IP data transport services, thereby making the negotiating parties subject to a dispute resolution process in the event that an agreement cannot be reached.
• Take a more long-term view on investment and innovation effects. The Commission needs to initiate a review of the EU Merger Regulation, which has not been reviewed for 20 years, in order to put more emphasis on the long-term investment viewpoint.
• Establish a pro-investment approach to EU spectrum policy, including the adoption of best practices to achieve a more predictable and harmonized approach to spectrum auction designs, licensing costs, the prolongation of licenses and the identification of future bands.
• Apply circular economy principles to network equipment and incorporate the EU taxonomy for green investment in electronic communication networks, based on robust metrics.

With respect to the mobile mobile industry's impact on the UN Sustainable Development Goals (SDGs), the report says the impact is "driven by the increased reach of mobile networks and growing take-up of mobile internet services. SDG 7: Affordable and Clean Energy, SDG 6: Clean Water and Sanitation and SDG 3: Good Health and Well-being) have seen the biggest improvement in mobile industry impact score, according to GSMA research."

What are your recommendations for how to unlock new use cases and monetization opportunities in Europe's mobile economy?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.