
Europe falls behind in digital communications as 6G approaches
Europe is falling behind in digital communications warns the latest State of Digital Communications 2025 report from Connect Europe.
Although Europe has made progress in critical areas, investment has fallen for the first time in seven years and it still lags behind global peers in key areas such as edge AI says the report prepared by Analysis Mason.
For the first time in seven years, the total telecom investment in the region has declined by 2%, going from €59.1bn in 2022 to €57.9bn in 2023.
The report points to the limited rollout 5G Standalone (5G SA) – the most advanced form of 5G, designed to meet the complex needs of industrial customers – which has reached only 40% population coverage in Europe by the end of 2024, compared to 91% in North America and 45% in Asia-Pacific.
In Open RAN, Europe has made strides, with 16 trials and commercial deployments in 2024, compared to 10 in North America but still trailing the 24 in Asia. This progress reflects growing momentum among European operators, 52% of whom have already implemented, or are trialling, AI functionalities for network automation and optimization.
Meanwhile, edge cloud deployment in Europe remains limited, with just 320 live operator edge nodes and 1100 overall edge nodes, falling short of the EU’s ambitious 10,000-node target. These gaps highlight the urgent need for Europe to accelerate innovation in network infrastructure to secure its competitiveness and technological sovereignty.
The report covers the EU27 nations plus Albania, Bosnia and Herzegovina, Iceland, Montenegro, North Macedonia, Norway, Serbia, Switzerland and the UK with both mobile and fixed fibre networks.
Recognising the decline in the European telecoms market is key as 6G emerges.
3GPP has said that Release 20 of its standards, which are well under way and should be completed in 2027, will be a crossover release between 5G and 6G, while Release 21 will be a full 6G release and should be completed by early 2029, allowing for commercial equipment in 2030.
The decision to have a crossover release indicates that 3GPP, guided by the cellular operator and vendor community, will aim to build on 5G foundations rather than creating 6G from scratch. That aligns with the attitude of many large operators, especially in Europe, which have publicly stated that they will not sustain another big upgrade with major capex costs.
Capex levels at most major operators have fallen in the past two to three years and are not expected to return to pre-2021 levels, and so there is considerable pressure on the technology ecosystem to devise 6G as a series of incremental improvements that can be introduced when required without having to replace 5G systems.
This approach will be helped by 6G networks being cloud-native and AI-native to support a significant increase in automation, network adaptability, resource efficiency and therefore reduce costs.
For most operators, however, the priority for the rest of this decade will be to maximise the return on investment in 5G. But it is still important for large operators to be active in 6G R&D and standards-setting, to ensure that the development of the next-generation mobile network.
That is also shown by the fact that most operators plan to decommission their 3G networks before their 2G networks, particularly in Europe. 3G networks are often replaced by 4G and 5G and it is expected that 3G networks will be decommissioned in Europe by 2030. Many Connect Europe members that are planning to shut off their 3G networks are already doing so; they are all expected to complete this process by the end of 2028. 2G networks are also being deactivated. A few operators plan to leave their 2G networks running but many will decommission them over the next ten years.
The evolution of mobile standards, in the 5G-Advanced and future 6G specifications, is heavily focused on the integration of RAN and AI, initially for automation use cases such as self-organising network (SON) or automated beamforming, but looking ahead to an AI-native platform with AI embedded in the network itself as far as the digital front end.
The report shows that 25% of European operators have already deployed some AI functionality for RAN automation and optimisation, either enhancing an existing OSS use case, or implementing new functions, often related to beamforming in Massive MIMO sites. Another 27% said they have reached large-scale lab or field trials for their most advanced use cases and over 80% have RAN AI activity of some kind.
Satellite networks
Partnerships between satellite and terrestrial communications providers constitute a very small part of the European telecoms landscape, but they are becoming more strategic to telecoms operators as a rising number of use cases rely on the ubiquitous coverage that a combination of satellite and terrestrial broadband can deliver.
The upcoming 3GPP Release 19 will enhance the use cases and performance for 5G NTN 9non-terrestrial networks), improving coverage and capacity, extending support to the new 5G RedCap IoT standard, and adding multicast and broadcast services. In addition to 3GPP standards, other industry bodies such as TM Forum and MEF are working on common APIs to simplify integration and support an at-scale platform for apps developers. Many large European operators are forming NTN partnerships.
All these developments should help to increase the revenues from 5G satellite services in Europe by over 130 times between 2025 and 2033, from a tiny base of US$17 million at the start of that period to $2.4 billion by the end.
While this is small compared to total European telecoms services, these revenues will also help operators to attract new enterprise businesses and offer value-added services for additional monetisation. The biggest 5G satellite market will be commercial aeronautical mobile connectivity (aeroSat), followed by corporate networks and mobile backhaul.
Many corporate network revenues are supporting new use cases such as IoT and these will experience the highest compound annual growth rate, at 150% between 2027 and 2033.
“Strong and innovative operators are crucial to build a European technology stack and boost competitiveness. Deregulation and more scale are both needed to free up investment and ignite innovation,” said Alessandro Gropelli, Director General of Connect Europe.
“Current regulatory frameworks and competition policies not only hinder meeting challenging build-out targets, but also the development of the kind of new businesses, adjacent to connectivity, which could deliver real economic growth,” said Rupert Wood, Research Director at Analysys Mason.
The State of Digital Communications – 2025 edition report is here
