Digital slowpoke

German business sounds the alarm on 5G networks

Key Speakers At The Mobile World Congress Americas
Not about to miss out on 5G. Source: Bloomberg

In a remarkable show of unity and concern, more than 20 German CEOs, across many economic sectors, called on the government and telecommunications companies to speed up the construction of 5G mobile phone networks.

In statements to Handelsblatt, senior executives from BMW, VW, Deutsche Bank, Deutsche Bahn, Continental, among others, criticized Germany’s infrastructure plans, saying a lack of ambition and coordination could endanger Germany’s international competitiveness.

Once in place, fifth generation mobile phone networks (5G) will bring 100 times the current data-transfer capacity, at 10 times the current network speed. These massive quantities of real-time data transfer are a prerequisite to make self-driving cars a reality, and to revolutionize industrial production with digital innovation.

Last week, Deutsche Telekom CEO Timotheus Höttges laid out a vision for his company’s place in Germany’s future digital infrastructure, with the words: “Without us, nothing in the digital world will work.”

Digital bottleneck

For other companies, that phrase is as much a threat as a promise. As is increasingly clear, industry’s ambitious “digitalization” plans are alarmingly dependent on the ability of Deutsche Telekom, Vodafone and Telefónica to build and run world-class 5G networks.

“Cars are increasingly becoming networked devices. But that cannot work without a fast, comprehensive 5G network,” said Herbert Diess, Volkswagen’s CEO. Nicola Leibinger-Kammüller, CEO of machine tool maker Trumpf, said she was concerned that Germany was falling behind.

G S4 Connection Germany

Business concerns have intensified after the recent release of the Federal Network Agency’s (BNA) plans to award 5G frequencies in 2019. Not all details have yet been made public, but the agency’s plans fall short of what business and political parties have demanded.

In a major blow to the car industry’s plans for self-driving vehicles, by 2022 only autobahns and some other roads will be equipped with coverage at speeds of 100 megabits per second. Carmakers desperately want the country’s entire road system to reach that standard.

They also point out that in two years’ time China will already have built 10,000 5G mobile phone masts, but Germany only plans to build 500 by 2022.

Unrealistic targets

The 5G network plan aims to cover 98 percent of Germany’s population by 2022. But seen in terms of area, this will leave large swathes of the country without coverage. This will inevitably hinder the digital transformation plans of many regional firms and agricultural enterprises, as well as the country’s rail network.

The three major telecoms companies also complained that even the BNA targets are unrealistic and are lobbying to have their infrastructure obligations further reduced. They say they will only release details of their 5G plans once they have been awarded frequencies next year.

Their stance drew harsh criticism from Stefan Dohler, CEO of the energy and telecommunications firm EWE AG: “The oligopoly currently in place in mobile phone network technology is damaging both to consumers and to Germany’s economic position.”

Markus Fasse, Jürgen Flauger, Dieter Fockenbrock, Kevin Knitterscheidt, Jens Koenen, Stefan Menzel, Stephan Scheuer and Daniel Schäfer all contributed to this story. Brían Hanrahan adapted it into English for Handelsblatt Global. To reach the authors: fasse@handelsblatt.com, scheuer@handelsblatt.com, dschaefer@handelsblatt.com.

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