Opportunities in digital infrastructure seem to multiply every year. With 5G and fibreoptic broadband taking off, Internet-of-things maturing, and large-scale electric mobility just around the corner — the prospects appear virtually limitless.
For markets and nations, the needs and expectations around technology are immense, driven by political vision, research initiatives, and an ever-growing, ever-more normalised public appetite for data. Here are a number of major European development projections and the players expected to make an impact.
From 5G & Fibre to IoT & E-mobility
Worldwide, 5G is expected to spread rapidly with governments understanding the economic benefits of getting ahead. By 2025, the developed Asia Pacific market is predicted to have about 53% 5G coverage, followed by 51% in North America, 48% in China, and in typical runner-up position, 35% for Europe. That being said, European leaders have demonstrated an understanding of the costs of lagging; significant political energy and capital are being invested into next generation telecommunication infrastructure. As part of the Digital Compass, the European Commission set itself the target of covering all populated areas in Europe with 5G by 2030.
Accelerating 5G deployment could help the EU unlock its potential and gain significant economic and social benefits. According to Ericsson, full 5G penetration in Europe could unlock €250 billion in net GDP benefits across the continent. The European 5G infrastructure market was valued at $359 million in 2019, but is projected to reach $42.7 billion by 2027.
European operators Ericsson and Nokia are particularly well-positioned for success in 5G infrastructure deployment. The European market number two, Huawei has been losing out ever since the United States started pressuring its partners to drop the Chinese operator over security concerns.
As well as mobile network projects, there are huge plans for fibreoptic broadband. Fibre to the Home (FTTH) Council Europe is one organisation pushing for maximum coverage with the super-fast infrastructure.
Data prepared for the FTTH Council Europe found that in 2021 FTTH/Business coverage in Europe now amounted to more than half the total number of homes. The study revealed that the top five countries in terms of annual fibre growth rate in homes passed were Belgium (up 155% compared with the last survey), Serbia (up 110%), Germany (up 66%), the UK (up 65%) and Ireland (up 49%). The country adding the most subscribers in the survey year was France, with 2.8 million new FTTH/B subscriptions.
The European nations leading the charge in total percentage of homes with fibre coverage are Latvia (with 92%), Lithuania (90%), Spain (88%), Portugal (83%), and Sweden (81%). Those lagging in terms of total coverage are Austria (with 21%), Germany (16%), the UK (15%), Greece (10%), and in last place, Belgium (6%).
Fibre deployment is a fundamental requirement for digital development. Fast connection speeds make future innovation possible; high-speed data transmission is essential if nations are to remain competitive in any domain of digital services.
Germany, the United Kingdom, the Netherlands, and Italy are projected to experience the most significant growth in this area.
Turning to the European market for internet-of-things, there too we find a landscape with great potential. It is projected to move from the €151.2 billion seen in 2019 to €213.1 billion in 2022. Again, the opportunities are substantial. Mainstays Capgemini, Orange, and Atos SE have plans. Ericsson for its part is in the process of acquiring cloud communications specialist Vontage, advancing its portfolio and its IoT agenda.
As infrastructure evolves, so too must mobility. The climate situation has inadvertently created incredible demand for e-vehicles. Governments and the private sector are converging on the problem, creating a concerted effort. In the area of infrastructure, electric charging will be a lucrative vector for growth. The EV charging station market in Europe is expected to swell by $6.36 billion between 2021 and 2025.
Example charging providers include Virta, Etrel, Easee, Siemens, Engie’s EVBox, and Shell Group’s NewMotion. Nordic hardware providers CTEK and Zaptec also have large numbers of connected charging points. Interestingly, in the US, carmakers have signalled that they intend to make the shift into the energy provision space too; similar moves in Europe could intensify market competition, creating additional opportunities.
Major players and subcontractors feed their ambitions
When it comes to significant infrastructure projects, major players in telecoms are getting ready for a fight. Pekka Lundmark, the CEO of Finland’s Nokia, which sees annual revenues of around €23 billion — made his position on network infrastructure crystal clear: “We will invest whatever it takes to win in 5G.”
Nokia made a turnaround in mobile networks a top priority through 2021, and the strategy brought success. The company enjoyed a 9% increase in total revenues off the back of a 28% increase in network infrastructure revenues.
European mainstay Deutsche Telekom, which has annual turnovers of €100.1 billion in 2020, is equally single-minded. The telco recently claimed that its 5G infrastructure currently provides coverage to 80% of the German population. By the end of March, more than 66 million people in around 5,000 towns and cities across Germany will be able to use the company’s 5G network — with coverage reportedly rising to 90% by year’s end.
The company has been seeking to offload certain assets in fund-raising efforts for reinvestment back into 5G. Telekom’s long-standing CEO, Tim Höttges indicated that his strategy could come down to playing the role of ‘kingmaker’. By selling Telekom’s 12% stake in BT to rival Altice, cash could be redirected into the German 5G rollout along with some debt reduction.
“We have an asset where we have a lot to say and a lot of influence,” Höttges noted.
Regardless of the technology — 5G, IoT, EV charging — major infrastructure design and implementation relies heavily on intermediary field management service providers. Even business-to-government relationships would struggle to function without the real-world hands of these companies to connect clients and major infrastructure.
For digital infrastructure to roll out efficiently, there is a clear need for major players to form stable and consolidated relationships with field operators, relying on their recognised competence and ability to operate the same way anywhere in Europe.
For example in Italy, hope continues for a merger between the two largest national telecom providers TIM and Open Fiber, to make way for a single national broadband network across the country. The government aims to avoid overbuild of infrastructure, accelerate fibre deployment, and reduce costs for consumers.
In the area of field management, TIM have already signed with European service provider Solutions 30 in a €210 million contract. The decision was likely made based on Solutions 30’s demonstrated ability to replicate successful operations on a large scale. This was mostly recently confirmed by the company’s external growth strategy. Solutions 30 has been working to acquire smaller service providers, such as the UK’s Mono Consultants Ltd, before integrating them into its standardised process and services that are already working in Belgium or in Poland.
With projects of such importance, these kinds of partnership will play an increasingly vital role as competition heats up in Europe. Whatever happens, it will make for fascinating viewing, as the rival strategies of companies and nations play out in real time. Crucially, it will not take long before consumers feel the consequences, good or ill — of the decisions being taken today for the future of digital infrastructure.