In the current turbulent economic environment as it has been formed by the prolonged economic crisis, the modernization of the Greek economy and the transition to a new growth pattern based on innovation are major priorities. Digital transformation and the development of reliable telecommunication infrastructures and services are necessary components for improving the competitiveness of firms, public sector and the economy in general. In this context, the transition from 4G to 5G seems to offer a major technological advancement.
5G technology is expected to transform the environment in which many areas of economic activity operate. Artificial Intelligence and the Internet of Things are technologies that cannot be efficiently supported by the current technologies. These applications will increasingly become part of every network, device, application and service shaping a new digital world and changing the way people and businesses use the Internet. The combination of these technologies is expected to transform all aspects of ICT and consequently all related industries.
With regard to Greece, 5G technology can enable increased economic opportunities through improved access to social services, such as health care (for instance telemedicine considering the large number of islands) and education. Transportation, energy and tourism can also benefit by the technological advancements. It can also support entrepreneurship and enable innovation in universities and startups involved in developing new applications in the ICT field. According to a study by Arthur D. Little and Ericson, the deployment of the 5G technology and the digital transformation of specific sectors of the Greek economy such as the manufacture, public security, health and transportation can increase economic activity, in terms of GDP, by $4.2 billion up to 2026.
Moreover, the integration of technology – driven solutions can improve the daily life of citizens in municipalities and large Greek cities. Smart cities is a key area of digital transformation that will allow a combination of solutions related to an urban environment. Trikala, a city with population of 81 thousand people in Central Greece, is a pioneer in implementing innovating applications. The implementation of smart Lighting System, for instance, has resulted in substantial energy savings – up to 60% – compared to the conventional lighting system. In this direction the development of pilot 5G networks in Greek cities will allow people to gain experience on the best practices for 5G network development.
Smartphones are the primary devices for online access in Greece and mobile data usage is growing exceptionally in Greece. In 2018, it stood at 165.2 million GB, an increase by 71% compared with the previous year, whereas it is five times higher compared to 2015. As a result, data use per subscriber each month stood at 1.05 GB on average compared to 0.6 GB in 2017. This figure has further increased according to preliminary data for 2019.
However, Greece’s position remains very low in the ranking of EU member countries. Finland, Austria, Sweden, Denmark, Latvia and Estonia are among the countries with the highest use, exceeding 5GB per subscription each month. This is closely associated with the fact that digital societies in these countries are very well developed and people are familiar to the new technologies. These countries also score high ratings on the Digital Economy and Society Index (DESI), in contrast to Greece which is ranked in the lowest positions among the EU member states.
The Greek economy can be substantially benefited from the increased use of data and digital infrastructures. A recent study by the Foundation for Industrial and Economic Research (IOBE) showed that there is a statistically significant positive correlation between the use of mobile data and GDP. The effect is stronger in the case where mobile data are primarily used for digital services such as e-governance and e-payments and not just for entertainment. More specifically the benefit to the Greek economy, in terms of GDP, of doubling data consumption from its current level could reach up to EUR 2.6 billion or contribute 1.4% to GDP. The impact is even twice as higher when this increased demand for mobile data in Greece is driven by a more intense use of e-government, e-banking and e-commerce services to the European average on the basis of the DESI Index. In this case, GDP growth could reach 3.7% or EUR 6.8 billion.
But at the same time the transition from 4G to the 5G technology requires upgrading of infrastructures and substantial investments. The mobile communications industry is among the largest investors in the Greek economy having implemented investment plans that exceeded EUR 3.8 billion between 2010 and 2018 which corresponds to approximately one-third of their earnings before taxes, interest and depreciation (EBITDA). The relevant regulatory framework, however, remains bureaucratic and policy makers should focus on supporting a smoother transition, while addressing the challenges and concerns that local societies express.