EU, South Korea to Ally on Faster Mobile Access
So-Called 5G Could be Crucial for European Bloc, Which Trails Telecom Rival
By FRANCES ROBINSON in Brussels and MIN-JEONG LEE in Seoul CONNECT
June 15, 2014 11:02 a.m. ET
In the race to get the world's fastest mobile Internet, South Korea and the European Union will on Monday announce a major new pact to join forces on so-called 5G networks, according to a draft of the agreement seen by The Wall Street Journal.
The deal sets up a joint group to develop systems, set standards and get radio frequencies ready to accommodate the new technology. The aim is to have a global consensus and vision on 5G by the end of 2015.
The agreement could be crucial for the EU, which is lagging behind in the global telecommunications race after late and patchy implementation of the current 4G standard. While users can download a one-hour high-definition film in six minutes on 4G mobile Internet, 5G would slash this to six seconds, according to EU figures.
European businesses have long warned the region's growth will suffer if the bloc continues to trail its rivals on mobile technology. The 5G race is already on: Huawei Technologies Co. of China is investing heavily—$600 million through 2018—in the next-generation network. The U.S. doesn't have a nationally backed program, but universities are researching various aspects of the next-generation standard.
The EU is eager to regain its position as a global leader in mobile standards after the European GSM standard led the world when people first started using portable phones.
While Europe rested on its laurels, South Korea pushed ahead amid hopes to set out fresh revenue streams, with the first comers to the technology expected to hold a leading share in the industry. South Koreans are perhaps the world's most dedicated smartphone users, with a mobile penetration rate in the country of more than 100%.
Forging ahead together would benefit both Europe's mobile-equipment manufacturers—such as Ericsson, ERIC-B.SK -1.45% Nokia Siemens Networks Oy and Alcatel-Lucent SA ALU.FR -1.51% —and, among others, South Korea's Samsung Electronics Co. 005930.SE -3.26% , the world's largest maker of smartphones.
Samsung, which relies heavily on its mobile business to derive profit, is expected to play an active role in realizing South Korea's goal of seizing a firm foothold on patent rights over related telecom technologies.
Last year, the company claimed a breakthrough in the development of 5G technology, saying that it found a way to transmit large volumes of data using a much higher frequency band than conventional ones, which would eventually allow users to send massive data files at much faster speeds through their mobile devices, "practically without limitation."
In January, the South Korean government announced its road map for 5G wireless communication technology, setting a goal of being the first to bring the technology to commercial markets in December 2020.
This would be achieved through joint efforts from the private sector involving the country's three mobile carriers— SK Telecom Co. 017670.SE 0.00% , KT Corp. 030200.SE -0.83% and LG Uplus Corp. 032640.SE -0.32% —and manufacturers such as Samsung and LG Electronics Inc. 066570.SE 0.00% The government forecast the country would invest a combined 1.6 trillion won ($1.57 billion) over the next seven years in attempting to bring the technology live.
Under the plan, the government is aiming for total revenue of 331 trillion won from sales of mobile devices and network equipment that support 5G communications technology, during the 2020-26 period.
From the EU side, in December 2013 the European Commission said it would allot €700 million ($948 million) and industry partners more than €3 billion to conduct exploratory research into 5G "without delay." The commission intends to select the first set of projects to fund at the end of this year, with €125 million to allocate.
The partnership will be led by two groups: Europe's 5G PPP, which is based in Belgium and includes European technology and telecom companies such as Telefónica SA and Nokia Oyj NOK1V.HE -0.59% ; and its South Korean equivalent, the 5G Forum.
Work on 5G should start "the sooner the better—it is extremely important that we take the lead again," EU digital commissioner Neelie Kroes said. "In the '90s we were in the driver seat, talking about GSM, so it would nice to be back in that position."
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