Monetising 5G: Europe’s road to 2025 connectivity goals

The European Union’s 2025 connectivity targets, originally established in 2016, aim to provide high-speed, ultra-reliable internet access across the continent. However, with anticipated costs reaching €500 billion, meeting these goals has proven to be a monumental task.

As legacy 3G networks are gradually switched off, operators are releasing more spectrum, which is providing a clearer path forward. But the challenge remains: how can operators monetise 5G to justify the enormous investment?

At a recent panel on Monetising 5G at Capacity Europe 2024, industry leaders from telecommunications, consultancies and data centre services gathered to discuss the current state of 5G deployment, the obstacles standing in the way and the future of monetisation strategies.

Mohamed ElSayad, chief business development and innovation officer at Budapest-based telecommunications firm 4iG, noted that while 5G rollouts are happening across Europe, operators are still trying to figure out how to fully monetise their investments.

“What we've seen is that there’s quite a lot of excitement and adoption from operators,” ElSayad said, but emphasised that “operators still don’t have the full understanding of how 5G is going to bring all the revenues back”.

In its early days, 5G deployment was concentrated in dense urban areas, sports stadiums and hospitals – places where high-speed, reliable connections were immediately necessary.

In rural areas, deployment lagged, primarily because operators could not foresee substantial returns on investment there. ElSayad added: “Rural areas are left out except for mobile-only operators, which see it as their only way to fight against fibre incumbents.”

Stuart Curzon, chief commercial officer at Cambridge Management Consulting, echoed these concerns. He noted that while 5G has moved beyond the hype stage, the real challenge lies in moving past pilot projects and finding viable, scalable use cases.

“We're at the stage where 5G is no longer a nice-to-have, but essential,” Curzon explained. “With AI, machine learning and applications like ChatGPT growing, 5G will be indispensable for businesses needing the bandwidth, security and latency it offers.”

Cristian Grigore, owner and president of Prime Telecom, a Romanian infrastructure provider, painted a varied picture of 5G deployment across Europe.

According to Grigore, the UK and Germany lead the continent, with substantial 5G initiatives in place.

“Germany has some very nice projects for private networks, like the one at Hamburg harbour, or with BMW and Siemens,” he said.

However, Grigore noted that while countries like Sweden and Finland have also made significant strides, much of Eastern Europe, particularly in rural areas, lags behind. “Operators in these regions are hesitant to deploy 5G because they don’t see immediate revenue,” he said.

Looking outside Europe, Grigore cited countries like the US and China as being ahead on rollouts, while Latin America and Africa are only beginning to launch their 5G projects. He singled out the UAE and Dubai as technological hubs in the Middle East, although much of the rest of the region is still developing its 5G infrastructure.

Curzon pointed to historical barriers to 5G’s success – namely, spectrum availability and a lack of 5G-enabled devices. But with both issues largely resolved, the next hurdle is operational rather than technical.

He explained: “The mindset has shifted. Companies are no longer looking for proofs-of-concept to justify 5G – they’re figuring out how to operationalise and roll it out at scale.”

ElSayad agreed but stressed the need for more spectrum, especially in the mid range. “There’s still a lot of need in the mid-band frequency,” he explained.

However, he was optimistic about the future, saying that operators are beginning to invest in the technology now that 3G sunsets are freeing up bandwidth. “The financial burden on operators is still significant, but infrastructure sharing is helping reduce these costs by about 30%,” he said.

One of the most significant factors in reducing the cost of 5G deployment has been infrastructure sharing. By sharing towers, cables and other infrastructure, operators can avoid duplicating costs and focus their investments on new technology and services.

Grigore confirmed that Prime Telecom has embraced this model, particularly in Romania. “We’re providing infrastructure for most networks in Romania and abroad, and raising tower heights to accept more antennas,” he said.

He added that many companies, such as Vodafone and Telefónica, are even selling their towers and leasing them back as part of this infrastructure-as-a-service model.

ElSayad also highlighted the benefits of sharing. “We believe in passive infrastructure sharing,” he said. “We’re working on projects like building a fibre network in Egypt to connect 6 million households, and we’re doing this as a shared infrastructure for all operators.”

However, ElSayad cautioned that while passive sharing is beneficial, active infrastructure such as network management and data services should remain under the control of operators.

“There’s a lot of data to be monetised from active infrastructure, and operators need to stay close to that,” he explained.

For Curzon, partnerships will be key to monetising 5G, particularly as the technology’s use cases expand beyond traditional mobile services.

“The complexity of use cases means an operator alone won’t have all the answers,” he said. “5G isn’t just about infrastructure any more. You’ve got ports, airports, smart cities – all of which will require diverse applications running on the same network.”

Curzon argued that operators will need to build a wider ecosystem of partners, including infrastructure operators, application developers and cloud service providers, to make 5G monetisation work.

“You’ll need partnerships with companies offering edge computing, AI and other applications that drive the demand for 5G.”

One company Curzon mentioned, SmartCIC, has developed technology to measure the availability and strength of 5G across various locations. Such tools are increasingly critical in optimising network performance, particularly in areas where 5G is being rolled out for smart city applications.

Curzon’s thoughts were echoed by ElSayad. He noted that the involvement of cloud providers, systems integrators and other critical partners is crucial for delivering effective solutions that meet the specific needs of enterprises.

ElSayad shared a real-world example of a mega-logistics centre in Hungary, whereby the collaboration between the enterprise, a systems integrator and a cloud service provider resulted in a significant boost in productivity.

By addressing safety concerns and inefficiencies, such as those involved in operating cranes, the deployment of a 5G mobile private network (MPN) not only enhanced worker safety but also cut operational time by 60%. This showcases how customised 5G solutions can drive substantial improvements in industrial environments.

ElSayad, though, noted that while the technical benefits of MPNs are clear, financing can present a challenge, particularly in the context of smart city initiatives. As 5G technology expands into such areas, as well as the likes of autonomous transportation, financial models and investment strategies will need to evolve to accommodate the scale and complexity of these projects.

The discussion around monetising 5G networks revealed some interesting insights, particularly in terms of how private networks differ from public deployments.

While public 5G networks are aimed at providing faster speeds and lower latency for consumers, private networks are more focused on meeting specific enterprise needs.

In particular, MPNs offer a range of benefits for businesses, from enhanced security to greater control over network performance, making them an attractive investment for companies in sectors such as manufacturing, logistics and transportation.

Curzon argued that traditional return-on-investment (ROI) metrics may not always capture the full value of 5G deployments. While financial business cases can be difficult to quantify, the real value of 5G lies in the new capabilities it unlocks.

In the context of Industry 4.0, for example, 5G enables a smarter, more scalable approach to manufacturing that simply would not be possible with previous generations of technology. By tying production lines, inventory systems and autonomous vehicles into a single, cohesive network, enterprises can achieve higher levels of productivity, reduce error rates and respond more quickly to changes in demand.

ElSayad, on the other hand, provided a more concrete example of how MPNs can deliver measurable ROI. In the case of BYD, a leading car manufacturer, the deployment of an MPN resulted in a significant increase in productivity and a reduction in human error.

This underscores the fact that for enterprises, the ROI of 5G MPNs is often more straightforward than it is for consumer-focused 5G services.

However, ElSayad also noted that the financial feasibility of consumer-related 5G deployments remains a challenge, particularly as operators struggle to monetise the increased speeds and lower latency that consumers now expect as standard.

As Europe pushes towards its 2025 connectivity goals, the outlook for 5G remains promising but challenging.

The EU’s targets may be ambitious, but the financial, logistical and technological hurdles are slowly being overcome.

Infrastructure sharing, spectrum availability and the rise of partnerships across industries are setting the stage for more widespread 5G adoption.

In the words of ElSayad, “the roadblocks are clearing, but the next steps will require operators to innovate and embrace new business models”.

Whether Europe can meet its 2025 targets is still up for debate, but one thing is clear: the future of 5G will depend not only on the technology itself but on the partnerships and strategies built around it.

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