Exclusive: Zyxel Networks A/S president talks Europe 5G market and opportunities
2022 is set to be a big year for 5G, with faster development and commercialization already being seen. We spoke with Zyxel Networks A/S President Jean-Marc Guignier, who shared his observations on European market opportunities and how SMBs can benefit from this fast-evolving technology.
How do you see the 5G market developing in Europe?
5G coverage is now ramping up in Europe. I think most countries will have around 90% population coverage and 80% geographical coverage within two years. However, the 5G ecosystem is still far from complete, so the adoption may take longer to prevail across all Europe.
GSMA Intelligence forecasts that Europe will reach 276 million 5G connections by the end of 2025. That’s 40% of total regional connections, with the Nordics and Western Europe recording the highest adoption rates.¹
We can see that the market development of 5G networks differs throughout Europe. In some countries, there are several service providers and stronger competition, which is pushing 5G adoption and lowering prices. However, in countries where the local service provider has a kind of monopoly, pricing is higher and that’s slowing down adoption.
In my opinion, adoption by end-customers depends on service providers, including the speeds and bandwidth they can get per month, and the rates. As a result, the price of hardware, like 5G routers, isn’t so sensitive at this stage.
Do you see any emerging 5G customer needs or applications over the next few years?
For me, 5G is the first real mobile network that is genuinely targeted at B2B use, especially as it can be applied for many applications that can’t be fully realized through 4G.
Our 4G routers are primarily used as a backup network; however, we're seeing 5G routers being used for primary internet connection. These can replace existing low-speed ADSL and VDSL wired connections because 5G has the bandwidth necessary to transmit large volumes of data in a short time.
There’s also the growing trend of cloud integration, and there’s a strong and growing demand among our customers for their mobile routers to be administered via our Nebula cloud networking solution. As one of the few suppliers who offer cloud-managed 5G solutions to SMBs, we’ve integrated Nebula into 5G routers to simplify always-on connectivity and allow for easier network management with a GUI and more detailed information than traditional admin tools.
The post-pandemic new normal of hybrid work is also notable. Companies require productive remote work, and 5G can provide the same level of network services that you have in an office. When working remotely, it gives you enough network bandwidth to access the office’s network, get large files from the cloud, and ensure uninterrupted video conference calls.
How will 5G benefit business? Can you share some use cases?
5G really shines here because it can facilitate easier, quicker, and more affordable network deployment.
The pandemic has brought into sharp focus the importance of stable and flexible connectivity. We’re seeing more and more people who don’t want to drive an hour to the office or stay at home all day. Shared offices are booming as a result, and 5G routers are ideal for such applications as well as any working-on-the-go needs.
5G is also a great alternative for delivering the exact bandwidth you want. Many hybrid work locations in Europe are in the countryside, where fiberoptic links aren’t as readily available. It gives companies a new option that is fiber-fast and often cheaper than a conventional wired broadband connection.
We had a Monaco-based customer selling 5G routers for cruise boats in the Mediterranean. Our routers are now providing significantly better bandwidth for people to work or use social networks during cruises. It’s a new application that can bypass satellite connections, which in comparison are expensive and limited in bandwidth.
Similarly, another customer was a large bank in France who used 5G to create its SD-WAN with better SLAs on the application. They’ve been impressed with the robustness of the 5G service, which has allowed them to deploy several hundred 5G devices so far.
What’s your channel strategy for 5G solutions in Europe moving forward?
We’re applying two main approaches for different customer bases: one through system integrators and the other through the E-tail. E-tail addresses the B2C market like prosumers, who require 5G speeds at home or for their small offices.
When integrators are considering a new application, they’ll deploy the 5G routers on top of it. From my point of view, it’s essential to develop solutions, not just sell routers. We need to find more new integrators and resellers, and support them in rolling out new applications.