TPRC45

This paper reports on research into policy and regulatory scenarios for the successful development and deployment of 5G in Europe, and possibly beyond. The starting point for the research is the combination of two overarching policy objectives:

(1) European leadership in the development and deployment of 5G; and

(2) moving beyond the mass consumer market to serve the specific needs of business users, the so-called vertical industries, such as automotive, health, agriculture, etc.

The research explores how these two objectives might be enabled through policy and regulatory action, using the scenario approach

Since the success of GSM, introduced in 1991, reaching its peak in deployment in 2015 with 3.83 billion subscribers and 700 operators in 219 countries and territories, the question of European leadership in the development and deployment of mobile communications is being raised with each successive generation. European policy makers have a keen interest in the success of the next generation because ubiquitous and high capacity electronic communication infrastructure is recognized as a cornerstone of economic development. This also applies for 5G scheduled for introduction around 2020.

To develop the policy and regulatory options, the first part of this paper researches and identifies the attributes that have led to the success of GSM using historical analysis. The findings are compared with the developments around 3G and 4G. Subsequently the paper investigates how the lessons learned can be transposed to the political and industrial context of 5G. This leads to the “Evolution” scenario as the base line.

The second part of the paper questions whether the path towards the future is predetermined by previous generations, by a prevailing industry structure. It positions that there is indeed a fork in the road ahead that gives way to an alternative future, which is captured in the “Revolution” scenario. This fork in the road needs to be navigated by policy makers and regulators as it will lead to different possible futures. Whereby one future outcome may be more desirable than the other.

The “Revolution” scenario represents a clear break with the trends underpinning the “Evolution” scenario. It exploits the opportunities of standardized APIs for service creation, being enabled by network virtualization as part of 5G. These open APIs allow the market entry of a multitude of virtual mobile network operators (VMNOs), dedicated to serve particular industry verticals or economic sectors with tailored feature sets and qualities of services. As firms compete for end-users, they will compete for providing the best virtual mobile services as well. This is expected to results in a very dynamic wholesale market. A market that unlocks a higher willingness to pay, which, through differentiation of network services, will flow through to incentivize 5G network investments.

The paper will describe the various dimensions of the two scenarios and elaborate the policy and regulatory actions required to enable each of the scenarios, addressing topics such as: retail market access; open and common APIs; net neutrality; liberalization of SIM usage; and multiple VMNOs on a single device.