This article is the 3rd article of the series of 5G developed by the Technology and Media Working Group of the European Guanxi Editorial Team. Every month we dive into a different aspect of 5G regarding the EU-China dynamics. You can read the rest of the articles here.
In our last article, we talked about the relationship between 5G and the metaverse. We have seen that developing an efficient metaverse requires not only reductions in network latency, but also strong internet speed and power. Aside from the metaverse, 5G can unlock the potential for artificial intelligence (AI) and the Internet of Things (IoT). Growing access to 5G is, therefore, necessary to develop a digital society. But how accessible is 5G in China and the EU?
In this article we attempt to answer the aforementioned fundamental question of 5G coverage in the two regions, highlighting the entrepreneurial journey and the policy decisions that have shaped the current state of affairs. We first look at the steps taken by the European Union to reach its 5G goals; then we explore the different development paths of China – which ultimately led the country to be in an advantageous position for 5G accessibility.
Access to 5G within the European Union: hard to meet the goals
According to Accenture (2021), the impact of 5G on the European economy will add up to €1.0 trillion to the EU’s GDP in the period from 2021 to 2025. Within the same time period, 5G will potentially create up to 20 million jobs across all sectors, with benefits impacting the entire EU. Hence, in the post-pandemic world, 5G technology represents a means to accelerate economic recovery by facilitating flexibility, ensuring enhanced productivity, and fostering R&D investments.
In 2013, the European Commission identified a myriad of 5G opportunities across the EU and subsequently established a public-private partnership on 5G (5G-PPP) to accelerate innovation in this technological field. A few years later, the European Commission committed €700 million in public funds through the Horizon 2020 Programme. The EU is constantly working to reach two medium-term 5G goals: (i) uninterrupted coverage in urban areas by 2025 and (ii) coverage of all populated areas by 2030 (European Commission). Despite the goodwill, some Member States have experienced major delays in the application of 5G networks. At the moment, only 11 countries are likely to meet the target (Nicolás, 2022). According to the 5G Observatory (2021), a monitoring tool established by the European Commission, at the end of March 2021, Malta, Lithuania, and Portugal had not launched 5G services.
The considerable differences in the level of development among the Member States jeopardise the EU's goals regarding universal access to 5G. The European Court of Auditors (ECA, 2022) explained the risks to security represented by missing the 5G goals during a press release following the annual meeting.
Some mobile network operators in the EU have chosen to collaborate with non-EU-based vendors. The choice is considered highly risky because of the different standards in personal data protection, the risk of cyber-attacks and cyber-espionage. Non-EU vendors do not have to comply with EU legal requirements, and often the law of the states in which these vendors are headquartered do not have equal security standards. It is the case of Huawei (China) and Samsung (South Korea), both considered high-risk vendors.
When 5G security awareness started to arise globally, the European Commission reacted with a toolbox on cybersecurity in January 2020. The toolbox focuses on all kinds of risks identified by the EU, including those associated with non-technical causes, such as the risk of interference by foreign states, and includes technical actions to reply to these threats. However, many mobile network operators had already chosen their vendors. At the moment, excluding high-risk vendors from the market without a transitional period will only generate high substitution costs for local mobile network operators, yet compensation measures have not been set.
The toolbox recommendations are not mandatory. Mobile network operators do not have a common European regulation frame to abide by and prefer to continue with their current business procedures. Another difficulty is that there is little information about the security manoeuvres at the state level, making it hard for EU regulating agencies to control the state of play.
Even though the current state of the 5G deployment is not clearly defined at the European level, the EU launched the first group of 6G projects under the 5G-PPP.
The Chinese 5G Dream to come true by next year
According to the guidelines issued by ten government bodies, including the Ministry of Industry and Information Technology (MIIT), 5G users in China will exceed 560 million by 2023 (State Council, 2019). By then, the fifth-generation networks are projected to serve over 40% of smartphone users. The same document reports the creation of new consumption modes within the possibilities of 5G, with a penetration rate of 35% among all the major industrial companies.
The goal is to enable every 10,000 people in the country to enjoy 18 different 5G base stations by 2023, with the government stepping up efforts to increase network coverage.
According to figures from the China Internet Network Information Center and Worldometers (GovInsider, 2019), while 70% of China's urban population has internet connection, less than 40% of the rural population lacks access to it. Because rural residents have limited internet connectivity, they also have limited access to critical resources for healthcare and education. 5G is supposed to be a solution to this issue of accessibility, abridging the digital divide and supporting government efforts towards rural revitalization at the same time. Indeed, 5G technology enables quicker signal transmission and coverage, allowing more people to connect to the internet faster. China has launched a variety of new governmental and private sector projects to address the country's uneven resource distribution, including remote surgery, drone transportation, and virtual reality schools.
With a sizable portion of the country already relying on 5G, even more regions and cities are joining the government's vision for the laying out of the high-speed networks. In the words of Tian Yulong, spokesperson for the MIIT, "all cities, as well as 87% of all rural centres, are expected to have 5G coverage, which puts (China) in the lead globally." (Tabeta, 2022). At the end of 2021, there were almost 1.5 million 5G base stations around the country. Notwithstanding the slowdown in other sectors, the investment in this infrastructure remains unaffected, growing at a fast pace (Tomás, 2022).
There are only a handful of key players shaping 5G in the entire nation. China Mobile, China Telecom, and China Unicom are the three giants of wireless connectivity who first launched their new-generation networks on October 31, 2019, thus immediately becoming global leaders in the field with nearly 10 million advance orders for fifth-generation broadband worldwide (Zhu, 2020).
Meanwhile, Huawei, the Chinese tech giant leading the 5G race, has taken the government initiative to heart, bringing the objective of narrowing the digital divide to the global level, by aiming at connecting more than 500 million people around the world by 2025.
As for the longer-term future, not long after the debut of 5G in China, it was clear to most that development on 6G would soon begin. Before most of the world has even had a taste of 5G, Chinese research institutions, universities, and government agencies are already working on 6G. China's MIIT believes that a commercial version of the sixth generation of wireless technology would be available by 2030, based on research that began in 2018 (Xuanmin and Xinyi, 2021).
Conclusions
Access to 5G technology has reached different stages in the EU and in China.
The EU suffers from the structural problem that characterises its own existence: the difference in development between Member States. The lack of common mandatory regulations creates barriers to a shared European development stage for 5G. Moreover, the fears arising from the economic partnerships of domestic mobile network providers with risky vendors generate security issues which are hardly solvable without compensation funds. It seems difficult to envisage that the entire EU will manage to achieve the goal of having uninterrupted 5G coverage in all urban areas and along major terrestrial transport roads by 2025. The digital divide among nations can cause economic disparity, as warned by the European Court of Auditors (2022).
In the case of China, the centrally-planned 5G strategy has the advantage of following a long-term vision, which is shaped by the effort of multiple departments and ministries, and thus complete in various aspects of its application. Moreover, a few, dominant, private enterprises have immediately seized the opportunities presented by the new infrastructure, investing and leading several projects for the government – and also enjoying a favourable policy environment. All these elements contribute to the milestones achieved by the country in terms of coverage. However, the challenge of abridging the digital divide between urban and rural areas is still a prominent one. Indeed, whether the Chinese government will be able to find suitable and prompt solutions for the digital gap once and for all will define China's position in the worldwide 5G landscape.
About the authors
Giulia Interesse is currently pursuing a PhD at Peking University, focusing on public management and innovation policy research. Her goal is to identify effective and impactful solutions to social issues surrounding international technology transfer and innovation efforts for development. Aside from her interest in Chinese politics and policy-making, she is keen on learning about different cultures and exploring opportunities for global cooperation. She is the co-founder of Chinaly, a daily press review of Chinese newspapers. You can find her on LinkedIn and Instagram.
Noemi Capelli is currently pursuing a master’s degree in Forecasting Innovation and Change at the University of Bologna. She holds a master’s degree in China’s Politics and Economics at Shanghai Jiao Tong and a bachelor’s degree in Asian and African Languages and Cultures at the University of Torino. She is the co-founder of Chinaly, a daily press review of Chinese newspapers. You can find her on Instagram and on LinkedIn.
The opinions expressed here are those of the writers and do not represent the views of European Guanxi.
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References
5G roll-out in the EU: delays in deployment of networks with security issues remaining unresolved. (2022, March). European Court of Auditors. https://www.eca.europa.eu/Lists/ECADocuments/SR22_03/SR_Security-5G-networks_EN.pdf
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