FRMCS Competition: Europe’s Rail Tech Future – Ericsson, Siemens, Huawei

Introduction

The Future Railway Mobile Communication System (FRMCS), designed to replace the GSM-R network, is set to become the backbone of Europe’s digital railways, representing a multi-billion-euro investment. However, concerns have arisen regarding the potential dominance of a few key players in the FRMCS market, which could lead to vendor lock-in, inflated costs, and reduced innovation.

FRMCS Overview and Market Dynamics

FRMCS, built on 5G technology, is designed to handle critical railway operations, including train control, signaling, remote diagnostics, and passenger information. It is intended to support automated train operation, predictive maintenance, and smarter logistics, while replacing legacy GSM-R systems. The transition to FRMCS is a significant undertaking, given the scale of Europe’s rail network. This transition is expected to shape the sector for decades, highlighting the importance of supplier diversity and competition to control costs, drive innovation, and ensure resilience.

Risks Associated with Market Concentration

The concentration of the FRMCS market among a few dominant players carries several risks, including limited choice for operators, reduced price competition, innovation bottlenecks, vendor lock-in, and interoperability concerns. Given these high stakes and technological lock-in, competition authorities are urged to take notice. Potential actions include requiring open procurement frameworks, mandating modular and interoperable interfaces, market monitoring, support for challenger firms, remedies for incumbents, and standardization governance. Concerns exist that opening the market might increase the risk of nonconforming or incompatible solutions, but a properly governed FRMCS certification framework can ensure safety without stifling competition. While large players may claim they are the only ones capable of bearing the investment in standards, testing labs, integration, and global support, modular and consortia-based models can also reap scale advantages. It is important to mitigate the risk of fragmentation by mandating compliance with strict standards and open interfaces. Proactive regulation is needed to ensure the future market is not locked into a few incumbents.

Recommendations for Regulatory Action

The Competition Commissioner should commission a market study into FRMCS procurement across the EU, examining tender practices, interoperability clauses, and supplier concentration. Furthermore, guidance or regulation on how future FRMCS tenders must be structured should be issued, ensuring they are technology-neutral, modular, and include compulsory interoperability clauses. EU funding for railway digitalization projects should be conditioned on compliance with open procurement principles. It is also recommended to liaise with national rail regulators, such as the European Union Agency for Railways (ERA), to embed competition safeguards into tram/rail digital standards. Member states should be empowered to challenge unfair practices in FRMCS contracts, ensuring smaller firms can appeal or complain under competition rules.

Potential Suppliers and Their Roles

The FRMCS market could be diversified through procurement frameworks encouraging multi-vendor participation. Different suppliers bring strengths in specific layers of the system—radio access, core networks, and applications—and could be combined to create robust, interoperable solutions. Potential players in the Radio Access Network (RAN) include Ericsson, Huawei, ZTE, NEC, Mavenir, and Funkwerk. Ericsson and Funkwerk have an established EU presence, while Huawei and ZTE can offer cost advantages, though they face political and security challenges. NEC and Mavenir bring flexible Open RAN designs. The core network (5G/FRMCS Central System) could involve Ericsson, Huawei, ZTE, Mavenir, and NEC. Ericsson offers politically acceptable solutions, while Mavenir and NEC specialize in cloud-native, software-driven platforms. Applications and Dispatcher Systems (MCX, Voice, ETCS Integration) could involve Frequentis, Siemens Mobility, Thales, Funkwerk, and Viavi. Frequentis is a leader in dispatcher systems, Siemens brings ETCS integration expertise, and Thales has experience in rail telecoms and defence communications. Funkwerk supplies FRMCS-ready products, and Viavi specializes in testing and validation.

Conclusion

European rail is expected to invest billions in digital communications infrastructure in the next decade. The question is whether this money will flow into a healthy, competitive ecosystem. The FRMCS market could be diversified if procurement frameworks encouraged multi-vendor participation.

Company Summary

Ericsson: Offers solutions within Europe.

Frequentis: A leader in mission-critical dispatcher systems.

Funkwerk: Supplies FRMCS-ready onboard and radio products and has an established EU presence.

Huawei: Can offer cost advantages but faces political and security challenges in Europe.

Mavenir: Specializes in cloud-native, software-driven platforms.

NEC: Brings flexible Open RAN designs and specializes in cloud-native, software-driven platforms.

Siemens Mobility: Brings deep ETCS integration expertise.

Thales: Has global experience in rail telecoms and defence communications.

Viavi: Specialises in independent testing and validation.

ZTE: Can offer cost advantages but faces political and security challenges in Europe.

Technology

ETCS: European Train Control System.

FRMCS: Future Railway Mobile Communication System.

GSM-R: Global System for Mobile Communications – Railway.

MCX: Mission Critical.

RAN: Radio Access Network.