Research 24 July 2020

5G: The Next Generation Communications Challenges Facing Europe’s Mobile Network Operators

The last major technology shift in the telecoms industry was transformational. With the advent of 4G came the smartphone and the mobile internet took off, opening up new applications and services to consumers across the world. Why then is there such pessimism regarding the prospects of 5G in many of the boardrooms of Europe’s major mobile operators?

Part of the answer is history. While the shift to 4G created new business models and new revenue streams, in particular for the OTT players, operators found themselves unable to provide an adequate return on the significant investments they made across the network.  Consequently, the telecoms sector has languished as one of the worst performing sectors in recent years. The question operators are now asking themselves is, how can they be winners in a 5G world?

For consumers, 5G means enabling opportunities that are not possible today – such as downloading a complete HD movie in seconds. However, the transformational opportunities are to be found in new applications, primarily for enterprises. Low latency enables remote robotics, for example, and longer battery life makes billions of remote sensors possible.  In short, 5G allows the Internet of Things (IoT) to become a reality.

While it’s easy to understand the new technical applications of 5G, it is not so easy to turn these ideas into real commercial propositions. It is similarly difficult to transform legacy operator organizations to be successful in a 5G world. Corporate communications will play a critical role here, not only in driving growth opportunities, but also managing the added reputational risk that inevitably comes from more potent technology and networks. We see the communications priorities for mobile operators as they shift to 5G in three core areas:

  • Growth: Reputation and differentiation in a 5G world
  • Transformation: Organizational transformation to meet the needs of 5G
  • Protection: Surviving the reputational challenge



By and large mobile operators have passed the resilience test during the COVID-19 crisis and are emerging with credit. For years, operators have argued that their role in supporting economic growth and social progression has been underestimated by regulators across Europe, who have steadfastly resisted further consolidation in the industry, have treated spectrum auctions as tax revenue, all while insisting on accelerated infrastructure investments to expand the network. 

But now the operators have leverage and an opportunity to re-set their relationships with regulators. Already there is evidence of a thawing in this often-frosty relationship. The general Court, the EU’s second highest court, caught the industry by surprise when overturning the decision by Margarethe Vestager, the EU’s competition commissioner, to block the merger of 02 and Three in the UK. And Vestager herself then highlighted the telecoms sector as one which would benefit from more EU consolidation.

Operators should also look to re-think their relationships with enterprise customers. COVID-19 has forced businesses to reassess how they operate, accelerating many of the innovations that will rely on 5G for success. Operators can accelerate the transformation of their own narrative and position themselves more effectively with enterprises than they have in the past. While some customers will continue to simply want network availability, the high value commercial opportunities will lie in those areas where operators partner with enterprise customers, to jointly innovate around opportunities. This requires a fundamentally different communications approach. Success will depend on the operators shedding their reputation as simple utilities and instead positioning themselves as innovative technology partners. 



As a result, success in 5G will require a significant departure from the way mobile operators have operated in the past. They will need to be more innovative, more agile, more collaborative and more able to attract the sort of talent that can truly impact the enterprise-focused model that will develop.  In the same way that the traditionally ponderous financial services industry has been forced by the sudden rise in fin-tech to embed innovation into their culture, so too will mobile operators. Two factors, cultural transformation and talent attraction, will be important in this regard.

Of course, designing and implementing cultural transformation starts with leadership.  Leaders must very visibly live and breathe the values that underpin the organizational transformation and support a culture of customer-centricity and risk-taking. Actively encouraging closer, more collaborative relationships with enterprise customers will be a significant leap for many companies, but it should be led from the top. 

Cultural transformation can also be driven by new talent, but it is not so easy to attract the risk-takers, the visionaries and the disruptive thinkers. However operators can help themselves by more actively managing their employer reputations across the new platforms and online career communities where this talent interacts. 



“Too big to fail” – a catchphrase used to depict banks that had become so large and interconnected that their collapse threatened the national and international economic order – became synonymous with the financial crisis of 2008.  While even the largest network operators would not put themselves in the same bracket as those systemically important financial institutions that shook the foundations of the global economy, the growing importance of mobile networks has heightened the risks for operators, even more so as the world emerges from COVID-19.  

5G will lead to exponential growth in data. It will connect many more millions of devices as the Internet of Things takes hold, as well as other critically important functions such as supply chains, productions systems and traffic management systems. As a result, threats to the smooth operation of services, such as network outages or cyberattacks, will not be tolerated, by either customers or regulators.  The recent announcement to strip Huawei equipment from 5G infrastructure in the UK shows just how focused authorities are now on this area. The ability to manage these growing threats, and protect the integrity and reputation of the operator, will be critical. Some operators are beginning to embed security as a fundamental issue of sustainability which helps to focus minds within the organisation and build trust outside of it.  

To summarise, 5G can be transformational for Europe’s leading mobile operators. However, to succeed, operators should be acting now to re-set their relationships with regulators, enterprise customers, and investors. 5G will push mobile operators into a more systemic societal role, accelerated by the COVID-19 pandemic. Corporate narratives at a minimum need to change to reflect that, and organizations should be prepared for the additional scrutiny that their elevated role will engender. Mobile operators should be active in shaping their future role, or else risk missing the opportunities that 5G will invariably bring. 

This article is a summary of the Kekst CNC report entitled ‘5G: The next generation communications challenges facing Europe’s mobile network operators.’  The report was based on research conducted among 20 of Europe’s largest mobile operators.  A full copy of the report can be downloaded here: