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5G connectivity, Why Telecoms Matters by Vodafone

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5G connectivity, Why Telecoms Matters by Vodafone

According to the report ‘Why Telecoms Matters’ by Vodafone 5G connectivity and the digitalisation of industry are priorities for competitiveness in Europe and the Member States. Why Telecoms Matters demonstrates how digitalisation driven by new 5G technologies represents a €1 trillion opportunity for Europe to stimulate innovation, increase industrial efficiency and improve public services.

5G connectivity and competitiveness, focus ‘Why Telecoms Matters’ by Vodafone

This enormous opportunity is based on the potential of the Industrial Internet, which integrates machines with networked sensors, software, artificial intelligence and cloud, thanks to 5G Standalone networks. There digitalzzation of industry thanks to advanced 5G connectivity may represent the “fourth wave” of the industrial revolution with an estimated value of 2,000 billion dollars per year for the manufacturing sector alone.

A continent at risk of decline

However, as the report highlights, Europe is still far from reaching the goals of the 5G digital decade. An alarming is opening gap of connectivity between Europe and other countries, which could put EU citizens, businesses and society at risk of further economic decline. Hence the importance of facilitating investments for infrastructure 5G, so as not to leave Europe faced with a funding gap of several billion euros.

Vodafone: the opportunity of digitalisation and the connectivity gap

The Vodafone report analyzes Europe’s growth and shows how connectivity and digitalisation can revolutionize productivity of Europe and the economy as a whole. The research quantifies this opportunity as a 10% increase in a member state’s Digital Economy and Society Index (DESI) score which would in turn lead to an increase in GDP per capita of 0.65%. It means that if all EU Member States achieved a DESI score of 90 by 2027, GDP per capita across the EU would be 7.2% higher, with a increase of the European Union’s GDP of over one thousand billion euros.

5G connectivity and competitiveness

However, Why Telecoms Matters raises the alarm precisely on how much Europe’s competitiveness and its future sustainability are at risk due to shortage of the continent’s level of digitalisation. The European Commission’s Digital Decade last September reported that “while 5G coverage of the population stands at 81%, the spread of high-performance stand-alone 5G networks is lagging behind. 5G still falls short of end-user expectations and industry needs. As well as in addressing the divide between rural and urban areas.”

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The USA and China are advancing

Ericsson’s most recent report shows the clear gap between coverage 5GSA and Advanced 5G of Europe and that of the United States, China and other global competitors. A delay that also affects other technologies that are based on advanced connectivity. For example, the EU lags behind the US and China when it comes to artificial intelligence. 73% of large models are developed in the US and another 15% in China, while no EU country has yet developed a comparable AI system.

Vodafone – Advanced technologies

5G networks they provide the latency and quality required for IoT growth as well. They are also necessary for its scalability, being able to support one million devices per square kilometer, compared to just 2,000 for 4G LTE. The number of IoT devices worldwide will almost double. In fact, it will go from 15.1 billion in 2020 to over 29 billion in 2030, for a value of between 5.5 and 12.6 trillion dollars globally by 2030, with factories representing the highest percentage of the economic value potential. This ever-increasing number of devices connected will in turn generate exponentially more data within and across sectors of the economy. Data from which you can gain insights with cloud-based AI.

The skills node

As industries and society become increasingly digital, there is a growing demand for workers with specialized digital skills and there is an increasing need for citizens in general to be digitally literate. Europe suffers from a digital skills shortage: the Commission estimates that 9 out of 10 jobs will require digital skills by 2030, but barely half of the European workforce has them.

5G connectivity and competitiveness objective

In terms of occupation, the EU has reached only 47% of the 20 million ICT specialists it needs. European industry is held back, especially because the adoption of AI, big data and cloud by large companies is low, 11%, 19% and 45% respectively. Investing to support the workforce and future generations to develop the digital skills needed to thrive in future labor markets will be a factor differentiation fundamental for Europe’s competitiveness.

Where to invest to improve

The report commissioned by Vodafone therefore illustrates the areas and challenges of the digitalisation of key sectors in Europe:

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in industry the large producers will probably continue to build 5G private mobile networks and tailor-made factory solutions. While smaller companies will have to rely on publicly available 5GSA to access similar innovation opportunities. In healthcare, connectivity can offer immediate returns to patients through telemedicine and remote patient monitoring. At the same time, this allows us to deliver new applications at scale. For example the training medical in augmented reality thanks to 5G.

Vodafone – Benefits for the environment too

For farmers and citizens in rural areas, next-generation connectivity will play a crucial role. In particular in improving crop yields, in sustainability and in increasing remote or flexible working opportunities traditionally the prerogative of those who live in cities.

For the environment, digital connectivity offers solutions that can reduce emissions global greenhouse gas emissions by up to 20% by 2030. Such as smart connectivity applications, meters, networks and platforms that can reduce energy consumption.

The impact on companies

The impact of digitalisation on the global manufacturing industry is estimated at up to $2 trillion per year. While IoT could generate $12.6 trillion in value across all sectors globally by 2030. SMEs represent more than 99% of all EU businesses, employ around 100 million people and they represent more than half of European GDP. Their success is therefore essential for Europe’s competitiveness. However, SMEs in Europe are on average 40% less productive than larger companies, leading to a gap of productivity which in Central and Eastern Europe reaches 70%.

Investments ‘plug and play’ for SMEs

SMEs are also less digitalised than larger enterprises, because they do not employ staff with the necessary transformation or IT skills or the ability to manage digital solutions. It turns out that only 27% of European SMEs enjoy high levels of digital adoption, compared to 54% of larger businesses. According to what emerges from the Vodafone report, 94% of SMEs would face future risks better if they invested in digitalisation. While larger enterprises have the resources and scale to invest in bespoke solutions, SMEs could benefit enormously from affordable, ready-to-use (‘plug and play’) solutions and products.

The digitalisation of healthcare

In healthcare and hospital settings, connectivity and digitalisation improve outcomes and reduce pressure on scarce healthcare resources by enabling remote consultations, telemedicine solutions and virtual monitoring. If adopted on a large scale, the impact of the digitalisation of the healthcare system would be even greater: according to a recent European Commission study, a five percentage point increase in telemedicine consultations in the EU was associated with a reduction of 3.7% of healthcare costs and 3.6% of mortality.

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The solutions come from 5G connectivity and competitiveness

According to what emerges from Why telecoms matter, connectivity and digitalisation also offer solutions that can reduce global greenhouse gas emissions by up to 20% by 2030. These include intelligent connectivity applications such as meters, networks and platforms that can reduce energy consumption. A study has shown that the implementation of these technologies for smart cities could deliver energy cost savings of around €876 million per year in 80 large EU cities. As well as energy reductions equivalent to the entire annual energy consumption of Estonia and Latvia.

The advantages of the transition digital rural

As regards rural areas, a European Commission study found that for every 1,000 new broadband users in rural areas created 80 new jobs. Smart livestock identification and tracking solutions can help farmers manage resources to maximize production and efficiency. The report estimates that connecting just 20% of EU farmers to smart farming applications could increase the sector’s annual profits by almost €10 billion.

A new era

Joakim Reiter, Chief External & Corporate Affairs Officer di Vodafone
Europe is on the cusp of a major boost to innovation and productivity thanks to next-generation 5GSA and the digitalisation it enables for businesses and the economy. Just as 4G unlocked the mobile Internet for consumers, 5GSA can inaugurate the era of the industrial Internet and bring Europe back to growth.

Europe has a trillion-euro opportunity to digitalize its industry and compete globally. However, this achievement depends entirely on speed of adoption. The five-year mandate of the next European Parliament and the next Commission must allow Europe to correct course. This allows us to reboot existing telecoms regulation and create a single market framework that attracts the investment needed to roll out 5GSA at a rapid pace.

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