Strand Consult has followed the mobile phone market for 24 years, documenting its ups and downs. One of the biggest failures was the 3G rollout around 2000. Operators spent billions on spectrum, but demand and ARPU failed to achieve the expected growth. This is an important lesson when looking at the many 5G dreams around the world.

Recently, five Nordic prime ministers (the leaders of Denmark, Sweden, Norway, Finland, and Iceland) signed a letter of intent to develop 5G in the Nordic region, a declaration that the region should be the world leader in 5G. It sounds good and is highly valued by Nordic companies like Ericsson and Nokia. The problem is that the region relinquished its leadership role years ago, and it's likely too late to reclaim it.
It's not that the Nordic region lacks the will; the problem lies in the limitations imposed by the European Union. You don't need to be a rocket scientist to understand why investment is flooding the US while essentially stalling in the EU. At the 2018 Mobile World Congress, Ajit Pai of the FCC presented pro-growth policies for 5G versus Andrus Ansip of the European Commission. Ansip repeated what he said in 2015 without being able to highlight any concrete results.

The Nordic ministers outline the creation of a common 5G space with harmonized spectrum, testbeds, infrastructure deployment, and socially beneficial applications. While important and necessary, these policies are secondary to funding to support preliminary financial investment. Operators are expected to provide the funds, regardless of a commercial case. Indeed, while the ministers may celebrate the future of 5G, a combination of poor national and EU policy has inadvertently undermined the industry's ability to invest.
To be clear, the telecoms industry does not need government subsidies or grants. However, it does need a fair, balanced, and transparent framework to support investment. Here, we define the things that must be in place for 5G—things that are currently lacking.
1. Regulatory conditions – Harmful regulations such as net neutrality, which is overinterpreted by BEREC, home-like roaming, WiFi4EU, the European Electronic Communications Code, GDPR, ePrivacy, and the litany of EU regulations that limit opportunities in 5G, particularly with small cells.
2. Value chain – The Nordic region used to be the hotbed of the mobile industry, with research and development largely funded by the telecoms industry. When EU telecom investment dried up, so did R&D funding. Today, 5G innovations are primarily developed in the US and Asia.
3. Business models – 5G business models and monetization are still unclear. The uncertain regulatory environment reduces incentives for experimentation.
4. User adoption – US consumers are already buying 5G products and services, while the EU is lagging even further behind in networking and innovation.
5. Network Expansion: Two things must be in place here: access to the frequencies and the required conditions that allow mobile and small cells to form a 5G network. In Europe, many countries have not yet begun the process of creating the framework for building and operating 5G networks.
What is happening in the US, South Korea, and China with 5G is exciting. These countries are building a five-lane highway to the future, removing regulatory barriers at all levels and increasing investment. The EU is going in the opposite direction: putting up more and more control obstacles and reducing financial incentives.
Historical facts show that the declaration made by the Nordic prime ministers has little value. EU leaders made the same statement at the Mobile World Congress in 2015, and nothing came of it. In fact, the situation in the EU for 5G has worsened. These declarations are the worst because the leaders simply make grand pronouncements but fail to implement meaningful policy.
At the 2018 Mobile World Congress, the EU stopped talking about Europe's "leadership" in 5G because the lack of it has become embarrassing. The global mobile power center has shifted to the US and East Asia.
The Nordic vision is already a reality in the US, China, and South Korea. Operators AT&T, Verizon, and T-Mobile are already doing what Europe dreams of.

The EU was once in the lead, but it has been on the wrong track for years.
The GSM agreement was signed in Denmark on September 7, 1987. This was the moment when companies in the Nordic region developed new wireless technology and brought it to market. In Denmark, Nokia, Siemens, Motorola, Intel, and others had major R&D centers where they developed technology and exported it globally. Denmark held a leading position in telecommunications, similar to its current leadership in wind turbines. It wasn't necessary for Denmark and the EU to lose their advantage in telecommunications, but national and EU leaders decided that the telecommunications players should be sacrificed on the altar of political self-interest.

The 2018 Nordic agreement bears a striking resemblance to the 2015 EU agreement: fine words with investment incentives. While European leaders sip tea and sign letters, the Americans and Chinese are forging ahead, building the networks of the future. Many fine words won't resurrect Europe's struggling companies. Action, not words, is what's needed. The US hasn't been afraid to reverse bad telecom policies that didn't work. The EU refuses to admit its mistakes and continues to double down on what failed.

Over the past 12 years, US carriers have invested twice as much in infrastructure as their European counterparts, and 5G networks and solutions are expected to be operational this year. In February, both AT&T and Verizon announced their plans.

As a Dane, I remember the Nordic region as being at the forefront of mobile wireless innovation. Thousands were employed in the industry. We used to develop brilliant wireless technologies, manufacture phones and devices, and export our innovations. Now we only have the memory of that greatness, like seeing the Viking exhibit at the National Museum.

Author: John Strand, Strand Consult