Is 2020 finally the year for German 5G? | Business| Economy and finance news from a German perspective | DW | 01.01.2020
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Is 2020 finally the year for German 5G?

After the first 5G smartphones made their market debut in 2019, what new developments can we expect in the area of mobile communications in 2020?

The good news: Fast mobile browsing with 5G is enjoying great popularity. Half a year after the launch of the first 5G network, there were already four million users, and by the end of the year the number is expected to reach five million.   

The bad news: the figures are not from Germany, but from South Korea, where the world's first commercial 5G network was launched in April 2019. Shortly after the Koreans, providers in China and the US followed suit. US provider Verizon, for example, plans to offer 5G services in 30 cities by the end of the year.

In Germany, the development of the 5G network is still in its infancy. In 2019, four mobile phone carriers bid for 5G licenses and paid a total of €6.6 billion ($7.4 billion) to the federal government — money that's missing for network construction.  

Vodafone's 5G network, which was launched this summer, currently has only around 10,000 users, company spokesman Tobias Krzossa told DW. They are "early adopters," i.e. people who want to use new technologies as early as possible. In addition, there are only a handful of 5G-capable smartphones on the market at the moment.

Tens of millions

The current mobile phone tariffs of Vodafone already offer the possibility to use 5G, but only a few places in Germany offer 5G coverage.

This is set to change, and not only in big cities, said Krzossa: "By the end of 2020, we want to connect ten million people to the 5G network." Vodafone currently has around 30 million mobile phone customers in Germany.

But the 2020 target doesn't mean that Vodafone will have ten million customers browsing at 5G speeds. It means that ten million people would be able to surf on Vodafone's 5G network if they were customers of the company and had the appropriate smartphones.

At Deutsche Telekom people prefer to remain vague, too. Company representatives don't seem to want to give a direct response to questions like how many of their customers are already using 5G or how many 5G customers they will have by the end of 2020. The detail that 500,000 Deutsche Telekom customers have already opted for a tariff that also includes 5G usage, says nothing about current and future usage.

Telekom sounded more specific when it came to the number of antennas that are already transmitting in the 5G network. By the end of the year, there will be 450, and by the end of 2020, at least 1,500, the company said. "We deliver on 5G," said Telekom CEO for the German market, Dirk Wössner. "Our technicians deliver top performance."

First the cities

According to Germany's Federal Network Agency (BnetzA), there are currently around 72,000 mobile phone transmitter sites across the country, and about 30,000 are being operated by Telekom. Each of these sites has several antennas, and yet network coverage in the country is patchy at best.

By way of comparison, according to the Chinese telecom giant Huawei, the special economic zone in and around Shenzhen alone — with its 13 million inhabitants — has 35,000 LTE transmitting stations.

For the time being, Telekom is focusing on cities for rolling out its 5G network. In the course of 2020, the company wants to extend the coverage to the capital cities of all 16 German states. In doing so, it is focusing "on contiguous areas instead of heavily isolated spots," said Walter Goldenits, Telekom's head of technology. But there are no details about the extent of coverage.

Telefonica, which owns the O2 brand and is the third major provider in Germany, also wants to concentrate on the cities, for the time being. At present, there are no 5G tariffs for customers yet, but these are expected to come in early 2020.

By the end of 2021, the company wants to offer 5G in the five largest German cities, and by 2022, it wants to expand it to the 30 biggest cities. The aim is to offer "extensive coverage to larger areas" in these cities, said Gerald Huber, who is responsible for 5G operations at Telefonica Germany, told DW.

The Huawei problem

Another challenge hindering the expansion of the 5G network is the controversy surrounding Huawei. The Chinese giant is one of the major mobile tech suppliers, along with Nokia from Finland and Ericsson from Sweden.

Unlike in the US, Huawei is not excluded from participating in Germany's 5G network. However, just like its competitors, the company must pass certification by the German Federal Office for Information Security (BSI).

During a speech in the Bundestag on December 18, German Chancellor Angela Merkel underscored her stance, which is controversial in the government, not to exclude Huawei from participation in Germany's 5G network. "I am against the exclusion of a company in principle. But I am in favor of doing everything we can to ensure security," said Merkel.

Asked whether China had threatened economic consequences if Huawei was excluded, Merkel said: "There has been no pressure on me from the Chinese government authorities."

By when this process will be completed is still open. Some observers expect it to be completed by mid-2020, and various government stakeholders are aiming to reach an agreement by January.

The uncertainty has been contributing to reluctance on the part of German mobile operators to expand their networks.

Deutsche Telekom, for example, announced in December that "in view of the unclear political situation in Germany, it is currently not entering into any contracts for 5G, not with any manufacturer." The company hopes "to get political clarity for 5G expansion in Germany as soon as possible," a company spokesperson told DW.

Huawei views itself as a leader in 5G technology and hopes to be at the forefront of the coverage expansion in Germany. "We have been investing in 5G since 2009," Huawei boss Liang Hua said in a DW interview. "Since then, we have invested nearly $4 billion in development."

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Moving slowly

The development of the 5G infrastructure in Germany is taking place rather gradually, and expanding coverage to rural areas is being done at a snail's pace.

This is in line with the requirements of the Federal Network Agency, the regulatory authority for the mobile communications industry.

They are not tied to any particular technology and oblige providers to ensure that 98% of households, as well as travelers on highways and railways, have internet access at a speed of at least 100 megabits per second by the end of 2022.

This speed can already be achieved with the existing 4G / LTE technology, which theoretically allows for internet speeds of up to 500 megabits per second. And that is one reason why all providers in Germany will continue to invest a great deal of money and energy in expanding their LTE networks in the coming years.

First come, first serve

The fact that Germany will boast LTE coverage in a few years' time, while 5G is already widely available in other countries, is not a completely erroneous scenario.

Telefonica's Gerald Huber finds the rapid 5G rollout in South Korea "impressive and great."

However, he has not yet noticed any revolutionary, 5G-specific application there. "The technology is there, but it's being used like previous technology," which currently means fast video streaming.

At almost 27 gigabytes per month, 5G users in South Korea have almost three times the data consumption of LTE users.

It's still unclear what groundbreaking new applications the fast technology will bring to private users. Many experts see 5G as a prerequisite for autonomous driving, in which cars communicate with each other in real time. 5G could also be used in telemedicine, for example for medical tests or for even carrying out surgeries from a distance.

Businesses anyway have high hopes for 5G.

The technology enables so-called "slicing," which allows companies to create their own 5G network, within which robots in production communicate with pieces of machinery and incoming goods.

Here, firms lagging behind could actually be disadvantageous for Germany as an industrial powerhouse. 

The future is (still) video

In its latest Mobility Report, network equipment supplier Ericsson at least leaves no doubt that 5G will establish itself much faster than its predecessor technologies. "By the end of 2025, we expect 2.6 billion 5G users worldwide," the report said, who will then account for almost half the global mobile data traffic.

And what are they doing with this fast technology? Mainly watch videos, according to the report — whether movies, TV series, commercials or chats. By 2025, videos will account for 76% of all mobile data, a significant increase from the current 60%.

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