Johan Dennelind: Turning Nordic 5G vision into action

As a response to the letter of intent on 5G signed by the Nordic Prime Ministers on 23 May 2018 in Örnsköldsvik, Johan Dennelind outlines in an open letter Telia Company views on practical actions to be taken in order to deliver on the political commitment on 5G in the Nordics.

Open letter to 

Prime Minister Jakobsdóttir
Prime Minister Löfvén
Prime Minister Løkke Rasmussen
Prime Minister Sipilä
Prime Minister Solberg

Dear Prime Ministers,

The recent Letter of Intent on 5G agreed by you at the Nordic Council meeting in Örnsköldsvik sends a strong message to the telecommunications industry. In the markets we operate, it is now time to focus and put in place the necessary steps for our region to push further ahead as the world’s leading digital region. As is rightly pointed out in the letter, this is about collaboration and cooperation between the Nordic neighbors as well as between the public and private sectors. Such collaboration is a must if our region is going to be globally competitive.

We cannot take 5G development lightly, as other regions of the world, especially the USA and markets in Asia, are moving at full speed ahead. Like you, they realize that having world leading connectivity and 5G networks will be the determining factor for economic success and will be the driving force for every industrial sector in the future. Their plans are detailed, finalized and are being executed on now.

In this light, I would like to offer some suggestions about how we at Telia Company believe the high-level principles you agreed, could be turned into actions to deliver success swiftly.

1. Spectrum policy – With many auctions on the horizon, it is vital that we get the license processes right. The swift allocation of spectrum in both high and low bands is a must. It is also a matter of fact that the more money the operator community pays in spectrum fees, the less will be invested in 5G infrastructure - a crucial trade-off. Also, importantly, the World Radio Conference will take place in 2019 and we believe that your Government’s should be engaged at a high level and unequivocally support proposals which have both short and long term 5G spectrum harmonization at their core. The preparations are beginning in your Government’s now and I would encourage you to make sure the level of ambition for 5G leadership you showed as Prime Ministers of the Nordic Council is carried through in this work.

2. Operational cost – 5G networks will be denser and, whilst being more efficient, they will have an increased overall level of energy consumption. Site rental and energy costs together account for the largest proportion of running costs and without steps to reduce those costs, they will act as a limiting factor on the ability to invest in widespread 5G networks. I believe that governments should be looking at innovative ways to help, similar to what many countries in our region have done to attract data centers. For example, I believe there should be a strategic (and low) tax on energy that supplies 5G infrastructure; access to key land/sites owned by public authorities should be offered to all market players at low and predictable prices.

3. Collaborative relationships – For 5G to be a success, the walls between public and private sectors need to be lowered significantly. We need to work on co-developing demand and ensuring that society – consumers and enterprises – get the right incentives to adopt new services, thus creating a demand, which in turn will incentivize investment. Success in 5G is as much a responsibility of the Ministers of Agriculture, Health, Energy and Transport as it is of Digital Ministers. The government’s massive purchasing power should be used to steer authorities towards supporting innovation and not only procuring the same services of yesterday at a lower price point. To enable innovation, we need to look at longer term commitments with more collaborative innovation requirements.

4. Regulation – Together with over 30 of my CEO peers, I recently wrote an open letter
regarding the soon to be finalized European Electronic Communication Code. The letter stated that “[…]there has been little progress on vital measures to facilitate 5G roll-out…”*. The work that has been carried out in Brussels over the past 24 months has been disappointing and has done little other than increasing the regulatory complexity. As an industry, we are resigned to the fact that it will create a stronger headwind on our journey towards 5G. As a continent and as a region, we all must do better. There have been numerous occasions that the commitment to network investment and achieving European Digital Single Market has been expressed by the European Heads of State and Government, only to be lost in the process at the operational level. Equally, the practical and sensible implementation of net neutrality regulation will be one of the determining factors on the ability to maximize the value of 5G investments. It is vital 5G innovation is not stifled.

From a practical perspective, I would suggest convening a cross-sectoral action group lead by one of your Ministers with a mandate to deliver an agreed, actionable plan for the above points within six months. I guarantee our full commitment and participation.

I am fully committed to our shared vision on 5G because, to put it bluntly, there is no other
choice. 5G and further digital infrastructure is and will continue to be the fabric that underpins our entire economy. The Nordic region already has an advantage in digitalization that we must capitalize on to continue fueling growth and jobs for citizens.

Yours faithfully,

Johan Dennelind
President and CEO

Letter of Intent on Development of 5G by Nordic Prime Ministers 
CEO statement on development of 5G in the Nordic countries 

* Statement of Europe’s CEOs on finalizing the Electronic Communications Code, https://etno.eu/news/etno/2018/967