5G in Europe could be held back by a lack of M&A activity across the continent, Orange has said, as telcos struggle to gain the scale to fully invest in new technology.
Gervais Pellissier, Deputy Executive Director for Europe, said the operator was taking a twin pronged approach to 5G, which will focus as much of fixed networks, including Wi-Fi, as well as cellular.
Europe has seen takeover activity grind to a halt in recent months, with the European Commission dismissing Telenor and Teliasonera’s attempts to form a joint venture in Denmark and Three’s attempts to buy O2 in the UK. Orange recently halted its own merger talks with Bouygues.
[Read more – Orange to launch 4G NB-IoT network in 2018, happy to play it cool on 5G race]
He said: “5G is coming but my fear is there’s a high fragmentation of the market and there won’t be enough investment. There could be a delay in 5G.”
As well as the capex concerns, Pellissier said there were also issues regarding densification of networks, with operators facing difficulties in seeking planning permission. He said: “Japan and South Korea are a little less sensitive than that.”
He also remarked there were also pressures to avoid the mistakes of previous generations, noting Orange felt it invested too early in 3G.
Nevertheless, the operator is working on developing the use cases for 5G and what traffic consumption will be by 2020. Pellissier said there was a split among operators as to how traffic will be delivered. He said: “We are strong believers that a good part of the traffic will be conveyed over fixed networks [with] Wi-Fi. We don’t believe something like 90 percent of traffic will be on mobile infrastructure.”
However, he said many operators, aside from Orange, still do not have the correct infrastructure in place, again underlying the need for competition authorities to allow telcos to scale. He said: “It’s not just the problem of the antennas. We need to make sure there’s the right fixed backbone in place. I’m not sure all of the operators are ready.”