The rise and rise of 4G in Europe

There is much debate right now about what should constitute 5G and how the various industry participants should help realise this next generational shift in mobile networks and services. In Europe, 5G has already been hailed as something of a lifeline for the mobile sector; indeed, former European Commission vice president Neelie Kroes issued what some have described as a "call to arms" to encourage the industry to get a head start with 5G technology developments.

At the same time, Europe's mobile players are extremely focused on the rollout and promotion of 4G services--both LTE and LTE Advanced (indeed, LTE-A better fulfils the original definition of 4G before the marketers got their hands on the term!). So much so that a recent report from the GSM Association (GSMA) claimed that 4G will underpin Europe's mobile recovery

Europe was certainly not as fast to launch 4G as other parts of the world, and indeed 4G accounted for just 5 per cent of mobile subscribers in the region at the start of 2014 according to the GSMA figures. By the end of 2014, Europe is expected to have 431 million unique mobile subscribers, representing 79 per cent of the region's population. By then, 4G penetration is expected to be 10 per cent.

The GSMA forecasts unique subscribers will to rise to 454 million by 2020, representing an 82 per cent penetration rate. The number of mobile connections, excluding machine to machine, currently stands at 688 million and is forecast to rise to 762 million by 2020. 4G is forecast to account for 53 per cent of mobile connections in Europe by this point.

Operator revenues are also expected to reflect this growth in subscribers and the resultant increase in mobile data volumes. Although the GSMA warns that revenue growth in Europe is still expected to be negative over the next two to three years, the financial outlook has shown signs of improvement in 2014 due to the positive impact from 4G deployments and rising mobile data usage.

However, operators are also in something of a chicken and egg situation: they need to grow to invest, and they need to invest to grow. It's going to be a tricky balancing act, and the GSMA has predictably called for greater cooperation between operators and policymakers to give operators the "commercial freedom to develop new business models, innovate at the network and service levels, and offer customised services".

The GSMA is not the only organisation to have predicted that better times are ahead for Europe's war-torn mobile industry. Fitch Ratings, which has the advantage of being a neutral observer, also said in a recent report that the future looks a little brighter for telecoms and cable operators in the European Union as an improving regulatory environment and growing demand for 4G and fibre services look set to ease the pressure on the sector in 2015. These are certainly good sentiments to accompany the industry into 2015.--Anne