- NextGenerationEU represents an opportunity for Irish companies to break into new markets or scale their presence in existing markets
- EU member states as part of their national priorities are supporting the rollout of high-speed 5G networks, which in turn is enabling extraordinary growth in cloud computing and other innovative products and services
- Click or scroll down for more information about the 5G market in:
As digitalisation and technological innovation rapidly become both more complex and more widespread, it’s increasingly critical for Europe to have reliable, superfast connectivity. The 5G mobile telecommunications standard not only enables real-time data transmission at scale, but also intelligent real-time networking of products, processes and industrial value creation chains
And that is where opportunity lies, both around products and services that facilitate the rollout of 5G, but also in the more or less endless universe of products and services made possible by these hyperfast mobile networks.
“In the end, 5G is only the connection,” says Raul Marigorta, a Senior Market Advisor for Enterprise Ireland in Spain, who specialises in telecoms and digital technologies. “It’s what we do with 5G that will prove most interesting, whether that is eHealth and remote healthcare, VR and AR in education, smart cities, private network, Internet of Things (IoT) or many other innovations.”
The rapid rollout of 5G across European markets
Following the auction of relevant spectrum, the rollout of 5G has kicked off in most EU markets. While there are more distinct differences between markets when it comes to other aspects of technological innovation, Marigorta explains that 5G is somewhat different.
“Europe in general is quite homogeneous in the development of 5G. We don’t see many differences in the 5G rollout across countries like Italy, France, Germany, Spain, Belgium and the Netherlands. That is because most telecom operators in Europe are mature providers such as Deutsche Telekom, Telefónica, Orange and/ or Telecom Italia, who are well in sync when it comes to 5G.”
How the EU is facilitating digital transformation
Through the Next Generation funds administered through the Recovery and Resilience Facility, the European Commission is actively enabling EU member states to accelerate their digital transitions, including the rollout of 5G, which is a key area for investment.
Of the €723.8 billion in loans and grants it is giving, at least 20% must be spent by member states on digitalisation, although in reality the Commission reports that at least 26% of this funding is going to digital transformation projects.
Much of that funding, in turn, is going to 5G. In April 2022, for example, the European Commission approved €2 billion in funding for Italy’s 5G rollout.
Driving SME digitalisation through cloud services
In 2022, the growth of cloud services will outpace the growth of traditional IT solutions, says Gartner. This makes cloud computing one of the most influential changes in the IT market since the early days of digitisation.
Infrastructure-as-a-service (IaaS) or cloud infrastructure services will grow tremendously in the coming years, as will platform-as-a-service (PaaS) and software-as-a-service (SaaS) cloud computing services. It’s the ongoing rollout of high speed 5G networks that makes this skyrocketing growth possible.
“Enabling SMEs to benefit from cloud technology is a key focus of the Next Generation funding, and it’s an area where Irish firms have strong capabilities,” says Marigorta.
“While Amazon Web Services, Microsoft Azure and Google Cloud dominate the cloud market, there is ample opportunity for Irish firms that can offer products and services to customise and facilitate access to the cloud for SMEs who may have thought they couldn’t use cloud technology,” he explains.
SMEs are not interested in 5G as such, Marigorta points out, but in what this high speed connectivity can enable them to do. “5G is the highway that we need to facilitate cloud adoption by SMEs. If I am an SME owner, I don’t care what the underlying technology is as long as it works. I need to manage my accounting and my clients. I need to develop my operation quickly but in a quality way, and I need to do proper customer service.
“Technology is a key enabler for these classic SME needs, so there is huge space for agile new start-ups that can come up with smart ideas that make the most of fast connectivity and new technology. Irish companies are fantastic at doing this.”
Understand the 5G market opportunity for Irish firms
The strong Irish cluster of cybersecurity firms, for example, has clear opportunities across key European markets as do Irish firms specialising in Open RAN, a technology that facilitates the deployment of 5G. Other thriving areas where Enterprise Ireland has identified significant opportunities for Irish firms include IoT and smart cities.
Among the Irish firms specialising in 5G and connectivity products and services, and thriving in EU markets, are Open RAN radio infrastructure specialists Benetel or Aspire and core cellular network software company Druid Software.
Expert advisors in Enterprise Ireland’s network of offices across Europe, together with its Market Research Centre in Dublin, can support your business as it investigates market opportunities, including by making local introductions and helping you to build your network.
If you are not sure where to start your export journey, get in touch.
While Belgium has lagged in 5G connectivity, that is set to change completely by 2025. Meanwhile, uptake of private cloud and data services is strong.
The 5G and connectivity landscape in Belgium
Proximus, Orange Belgium and Telenet are the main mobile network operators (MNOs), with local private network provider CityMesh expected to become the fourth, following a recent auction of 5G spectrum band. There is limited 5G availability currently, with Proximus offering some pockets of coverage, but that is set to transform following the auction.
The Belgian national strategy for broadband kicked off in April 2021 with full coverage planned for 2025. At present, 65% of the market has access to fibre broadband, with Proximus aiming to cover 70% of premises by 2028.
Private cloud and data services are readily available in Belgium from providers such as Combell, with the country’s wide broadband coverage, fast download speeds and reliable networks making them possible.
According to Statista, 64% of Belgian organisations used cloud solutions in 2018, while 43% of the Belgian population used cloud services in 2019. Both figures have likely grown since.
Key stakeholders in Belgium
- The Federal Public Service (FPS) Economy, particularly the new Broadband Unit in the Telecom department, which will implement the national broadband plan
- The Broadband Competence Office, which oversees all competences in this area and supervises the implementation of the EU Connectivity Toolbox
- Mobile network operators Proximus, Orange Belgium and Telenet (and CityMesh once it becomes one)
Understand the 5G and connectivity opportunity in Belgium
The EU is providing Belgium with €5.9 billion in recovery and resilience funding, and €480m of that is going towards supporting the digital transition. Quality goes a long way in Belgium and Irish companies have a solid reputation in the telecoms space.
Both factors contribute to this market offering solid opportunities around 5G and connectivity for Irish firms with innovative or best-in-class solutions, especially around:
- Open RAN
- private networks
- Internet of Things (IoT) services.
Partnership with local firms or providing infrastructure, network or IoT services to incumbents may prove the best routes forward for many Irish firms. Cloud or data services providers should look to sell to systems integrators, solutions providers or value-added resellers in particular.
Selling into Belgium
Broadly speaking, Belgium ranks highly in innovation and is a good test market for companies looking to grow into the broader European markets by establishing a local presence or through trade.
With high levels of English fluency, language is not necessarily a barrier to entry here, although it can be useful to have a local partner who speaks French and Flemish. Belgium is an open economy, but business relationships are based on trust, meaning sales cycles take longer than in the UK or the US.
Committing to the market and finding the right market entry strategy can be the biggest challenge for Irish firms. Druid Software, for example, has found success in the market through partnering with Belgian MNO Proximus and others on a number of collaborative initiatives, including an AI-powered safety app for motorcyclists.
Come to the market, attend the relevant trade shows, meet the right partners and establish strong relationships. Belgian partners are willing to engage, but in person works best!
Back to top
As France demands a cloud-first approach, 5G sites and antennas are multiplying rapidly there. That represents real opportunity for Irish firms.
The 5G and connectivity landscape in France
France Relance, the French government’s economic recovery plan, emphasises a cloud-first strategy for the public sector, while the government also announced a €1.8 billion support plan for cloud computing firms in 2021. Many French companies are also embracing the public cloud, despite lingering concerns over data privacy and sovereignty.
Most people in France support the implementation of 5G, with around half of the population expecting to get a subscription, especially to download and swap large files or to use telehealth devices.
Since the deployment of 5G in November 2020, sites and antennas have multiplied, and telcos have initiated the transition to the new generation of mobile phone standards. Marseille and Paris lead in terms of antennas, while 5G coverage remains unevenly distributed nationally.
In March 2022, the French government announced new measures aimed at promoting access to 5G for manufacturers and vertical sectors. The government also wants to simplify access to the 2.6GHz spectrum to stimulate industrial 5G projects, while exploring potential access to the 3.8GHz and 4GHz bands.
Understand the 5G and connectivity opportunity in France
Having already funded 31 research and development (R&D) projects to the tune of €478m under the national 5G acceleration plan (launched in July 2021), the government is set to provide a further €47m to seven new projects under the plan.
Irish firms can find particular opportunity in France around:
- Private networks
- Open RAN
- Smart cities
- Autonomous vehicles
Likewise, it’s worth targeting businesses engaged in:
- Industry 4.0 or 5.0
- 5G use cases
- Data centres.
Selling into France
There are opportunities for innovative products and services. Irish firm Benetel, for example, is providing French telco Orange with radio units for Open RAN development and testing.
Flexibility in product development and collaboration is a real advantage for Irish firms, but be aware of the challenge around access to the 2.6GHz spectrum and enabling 5G private networks.
The French market can be a long sales cycle and requires trust and reliability. It usually helps to have a base in-market, visit regularly, or work with a local partner. No matter what, patience and persistence is key.
Work with French experts to overcome complexity around tech harmonisation and spectrum access in France. Alternatively, look to work with systems integrators and operators at the forefront of 5G private network deployment.
Back to top
Leading the way in spectrum allocation, Germany is focusing on the connectivity needs of industry, while also seeking to make 5G available to everyone.
The 5G and connectivity landscape in Germany
Germany leads Europe when it comes to 5G readiness, or the proportion of relevant spectrum already allocated. Industry needs are the priority, as Germany seeks to modernise production processes through broadband, wireless real-time communications.
The Federal Republic has taken on a pioneering role in networks for local 5G applications (or campus networks), representing an important milestone for German industry
Germany has also pushed to make sure the general population has access to 5G. Telekom says 40m people have been able to benefit from the 5G network since July 2020 and providers are aiming to offer 99% of the population a connection to 5G by 2025.
Providers such as Telekom and Vodafone have already set up many 5G mobile base stations, meaning 5G is already available in some large German cities.
To achieve high coverage with 5G, Telekom and Vodafone are also using Dynamic Spectrum Sharing (DSS), which makes use of existing 4G infrastructure for 5G, depending on demand and particularly outside of cities, where the 3.6GHz frequencies used exclusively for 5G are being used first.
Understand the 5G and connectivity opportunity in Germany
Any innovative or value-adding product or service that helps to enable industrial applications, products and services that harness 5G is likely to be of interest to German customers.
Particular opportunities for Irish companies include:
Selling into Germany
German business culture is usually risk-averse and new entrants need to show strong commitment to the market. As the market is still fragmented, any company seeking to sell in Germany needs to build a clear go-to-market plan and to identify in-market partners.
This is a competitive market, so it’s vital to articulate a strong USP and be able to show how your offer brings significant commercial benefit.
Bray-based Druid Software, for example, has brought its 5G Raemis platform to Germany where it is partnering with others on cutting-edge 5G projects, including one relating to smart factory research at the University of Kaiserslautern.
Be as prepared and committed as you can. Germany isn’t a market for opportunistic sales. If possible, a physical presence there and constant visits to the market for trade shows and direct prospect visits are key for success. This ensures you can take advantage of the long-lasting opportunity the German market offers.
Back to top
Italy is vigorously pursuing digitalisation and cloud adoption, with significant funding for extensive infrastructure and service development.
The 5G and connectivity landscape in Italy
Italy was a front runner in the EU for the commercial launch of 5G services. All four MNOs (TIM, Vodafone Italia, Wind3 and Iliad) launched 5G networks between June 2019 and December 2020 and have since expanded their 5G services, offering aggressive pricing to capture share in this competitive market.
This high-speed connectivity is vital to Italy’s efforts to accelerate:
- digital skill-building across its population and workforce
- the digitalisation of businesses
- the offering of digital public services
- the implementation of key e-government processes.
In fact, migrating public administration to the cloud is one of the key drivers of the Italian recovery and resilience plan. Italy is now fourth in Europe in cloud adoption after the Nordics (Eurostat), with the market there worth €3.84 billion market in 2021, €2.89 billion of which related to public and hybrid cloud and €891m to virtual and hosted private cloud.
Understand the 5G and connectivity opportunity in Italy
Italy’s national recovery plan supports the digital transition with a €6.7 billion investment for the deployment of a 5G/fibre high capacity network. That should bring 5G to populated areas, schools and healthcare facilities, with widespread 1 Gbps connectivity by 2026.
The EU Commission has also approved a €2 billion in Recovery and Resilience Facility (RRF) funding for Italy to roll out a high-performing 5G mobile network.
To gain a foothold in the market, Irish companies with relevant offers should look to target:
- Local telecom operators
- Large system integrators
- Local distributors or value-added resellers (VARs) for partnerships in the market.
It’s also worth noting that growth in cloud adoption is being particularly driven by skyrocketing use of platform-as-a-service (PaaS), which was up 31% in 2021. Meanwhile, data centre automation is also a fast-growing area.
Selling into Italy
Take your time and be prepared. Invest in validating the market opportunity and building the right market entry strategy. Italian customers value strong relationships so it is worth spending time investing in building your network.
Irish firms typically find it useful to have a strong local partner in this competitive market, as this can help shorten the sales cycle, deal with the language barrier and navigate local bureaucracy.
Direct relationships matter. Invest time in coming to the market and meeting your counterparts in person.
Back to top
While opportunity abounds in this tech-savvy market, regulatory processes may slow down the growth of 5G.
The 5G and connectivity landscape in the Netherlands
The Dutch rank second in the world for online connectivity, with 98% of households having broadband connection and the country enjoying 95% 4G coverage. About 60% of the country is expected to have 5G services by 2030, with leading MNOs KPN and T-Mobile having launched commercial 5G services in July 2020.
The regulator, the Netherlands Authority for Consumers and Markets (ACM) has been reluctant to set out a comprehensive 5G roadmap while the shape of the future consumer and industrial Internet of Things (IoT) solutions landscape, including security and value chain implications, is still only sketchily defined. Progress will therefore be slow.
ACM is also studying how well the cloud market is working for people and businesses in the Netherlands, where Amazon Web Services, Microsoft Azure and Google Cloud all operate, with Azure having 73% of the cloud computing marketing in 2020.
The Netherlands is also home to the Amsterdam Internet Exchange (AMS-IX), one of the world’s leading digital data distributors.
Understand the 5G and connectivity opportunity in the Netherlands
While the Netherlands did not submit a recovery and resilience plan to the EU and, therefore, is not accessing any related funding, there are still plenty of opportunities in this vibrant, tech-savvy market. There is a keen appetite for cloud services, for example – the Netherlands ranks fourth globally when it comes to public cloud expenditure.
Opportunities for Irish companies include:
- Selling into MNOs, such as T-mobile, Vodafone Ziggo and KPN, which are all open to putting in place contracts relating to innovation, Internet of Things and partnerships
- Finding opportunities around Open RAN, which is being trialled by network operators since October 2020 and will be key in future
- Providing cloud and data services through a system integrator/VAR.
Selling into the Netherlands
It’s vital to show commitment to the market and boots on the ground give a strong advantage. Take the time to develop a tailored market entry strategy, bearing in mind the market is competitive and being the cheapest won’t guarantee success. A quality service and the right network connections should do the trick.
Come to the market, attend the relevant trade shows, meet the right partners and establish strong relationships. Dutch partners are willing to engage, but in person works best!
Back to top
As Spain seeks to bring ultrafast connectivity to everyone in the country, there is keen take-up of cloud services in business and industry.
The 5G and connectivity landscape in Spain
The Spain Digital 2025 Agenda supports EU connectivity objectives. It aims to extend ultrafast network coverage to the entire population (under the Plan for Connectivity and Digital Infrastructures) and prepare 100% of the radio spectrum for 5G by 2025 (following the Strategy to Promote 5G Technology).
Spain is improving on digitalisation, but there is room to improve the uptake and use of digital technologies, and information and communication (ICT) skills.
The adoption rate of digital technologies by firms is close to the OECD average, but is below the best performing countries in Europe. There is keen and growing interest in cloud services, where Amazon Web Services, Microsoft Azure and Google Cloud are the main actors in the market.
The private cloud remains the preferred option for security services (41%), communications (41%) and storage (40%). For its part, the public cloud is consolidated in areas such as the implementation and deployment of workstation services (52%).
Understand the 5G and connectivity opportunity in Spain
Under the EU Next Generation funding programme, Spain is receiving €4 billion to support fixed and 5G connectivity, data infrastructure and the related ecosystem. It is also getting €4.6 billion for the digitalisation of industry, SMEs and tourism and culture systems, along with investments in AI.
Particular growth areas worth addressing include:
- big data
- open RAN
- cloud security.
While public sector bodies such as the central government, the regional governments and local councils are potential customers, the private sector (MNOs, system integrators and so on) are more dynamic and more accessible customers. Companies to target include Telefónica, Vodafone Spain, Orange, Más Móvil and Cellnex.
Selling into Spain
The most important factor when it comes to the market around 5G and connectivity in Spain is being committed to it, which includes dedicating people to this opportunity. Furthermore, the sales cycle tends to be long so you need adequate financing in place.
Local competition is the main barrier to entry here, but there are openings for innovative offerings. Make sure you have local support in the market, so you overcome any language barrier and be mindful of cultural considerations. Bear in mind too that sales are heavily based on reputation and relationships.
To succeed in Spain, you need to pursue a strategy of continuous and thorough follow up.
Back to top