With the rising number of internet users and applications, the world seems to be ready to progress to the next generation of cellular network technology – 5G. And as telecom companies, governments, and other industry players work to bring in this fifth-generation technology that provides super-fast broadband access, there are key challenges to 5G technology implementation in Southeast Asia, which could, however, be overcome with some planning and effort.
Moody’s Investors Service in its June sector report pointed out several challenges to 5G implementation in the region. At the top of the list, was the lack of demand and a clear business case for 5G deployment. The American credit rating agency, explained that the current focus in the region was more towards increasing the speed and capacity of existing 4G networks than to enable the use of advanced 5G applications such as medical services, robotics, and smart home devices, which require higher band spectrums to run effectively.
Ericsson, the Swedish networking and telecommunications company, had its own take on the same. Speaking exclusively to International Finance, their spokesperson argued there was an increase of almost 27 percent in its forecasted 5G subscriptions. “The June 2019 edition of the Ericsson Mobility Report forecasts 1.9 billion 5G subscriptions – up from 1.5 billion forecasted in the November 2018 edition.”
The spokesperson further added that according to one of its global surveys, smartphone and data users had a keen interest for 5G. “Today, consumers demand perfect network performance and are even willing to switch providers if their own provider does not roll out 5G. More than half in China, one-third in South Korea and one in four in the US and Australia will change either immediately or within six months should this be the case.” This further signified the huge demand 5G was expected to receive in the region.
Hong Kong telecom operator OFCA too was optimistic on 5G demand, at least from a consumer viewpoint. It told International Finance, that the adoption of 5G services will be similar to previous generations of mobile services. It would be a “gradual process, subject to factors like the competitiveness of 5G service packages offered by the operators, the wide and affordable supply of 5G handsets and devices, as well as the attractiveness of new applications and use cases supported by 5G.”
It added that considering the keen interest of industry players and early public awareness of 5G technologies, it wouldn’t be surprised if 5G would become as popular as 4G in much lesser time.
Now, with regards to the lack of use cases, Ericsson’s spokesperson said, it was expected that most 5G use cases would go mainstream within two to three years of 5G’s launch.
And interestingly it had observed that 67 percent of those surveyed were willing to pay for these use cases, indicating that consumers saw value in 5G services.
Ericsson was optimistic of developing use cases not just for mobile phone users, but for industry players as well. In this regard, the spokesperson told International Finance, “When we look at the potential of 5G-enabled industry digitisation revenues for ICT players by 2026 – it is expected to be around $1,307 billion globally. Industries are moving towards digitsation for better business outcomes: to increase revenue by better serving their customers, to explore new revenue streams”.
According to various online newswires, many Asian governments too seem to be exploring industry use cases for 5G. For instance, in Singapore, telecom regulator, IMDA was reported to be exploring 5G usage in maritime operations, urban mobility, smart estates, Industry 4.0, consumer applications and government applications. Meanwhile, in Malaysia, the government was said to be looking to partner with industry players to develop 5G applications in verticals such as agriculture, automotive and education.
Another challenge as per Moody’s was spectrum allocation availability. In this context, Ericsson’s spokesperson said it was their belief that this was the most essential element in 5G implementation. “We believe one of the most essential elements for 5G is spectrum as the technology inherently is spectrum hungry.” This, it said would play a pivotal role in deciding on the actual 5G roll out in different countries across the region.
With regards to how this challenge could be handled, the spokesperson suggested that the governments should follow global standards in order to avail the economies of scale. Making the spectrum available and pricing it, should be done by the governments after factoring “in the long-term societal benefits of increasing mobile broadband penetration and its effect on their country’s economy.”
While Ericsson pointed out the pricing aspect of the spectrum as a challenge, OFCA, referred to the frequency aspect. It explained, “the implementation of 5G requires large bandwidth of spectrum in various frequency bands. Although 5G spectrum allocation for low and mid-frequency bands has been harmonised at the global and regional levels, the International Telecommunication Union (ITU) will determine the global allocation of high frequency bands between 24.25 GHz and 86 GHz at the World Radiocommunication Conference to be held in November 2019 to support 5G applications requiring high capacity transmission”.
Another related challenge pointed out by the OFCA was regarding 5G standards. This, it said was still evolving. It explained that there were three types of 5G services, namely, eMBB, uRLLC and mMTC and while 3GPP, the global standardisation body which defines 5G standards had finalised the first set of standards only for eMBB, the ones for the other two, were expected to be developed around the first quarter of 2020.
With regards to how these challenges were being overcome, Hong Kong’s OFCA said that it had in association with the Hong Kong Government “proactively prepared the groundwork” for the launch of 5G. For one, it has released new spectrum for the provision of 5G services that is more than eight times the existing spectrum used for 2G, 3G and 4G services put together.
It added that the first batch of 5G spectrum had already been allocated to three mobile network operators to help them provide large-scale public 5G services. OFCA further said that, it was encouraging industry players to conduct 5G trials. As of end of June it had issued 35 trial permits, with temporary, free-of-charge spectrum assignment for test purposes. This, it said would allow network operators “to make better preparations for design, planning and implementation of their 5G networks and systems.”
Such trials seem to be the norm in the region as telecom operators in other Asia countries too are carrying out the same, in partnership with 5G equipment manufacturers. For instance, in Cambodia, telecom operator Smart Axiata has begun 5G trials with help from China’s Huawei Technologies, whereas in Vietnam, telco, Viettel has in partnership with Ericsson recently demonstrated the first 5G connection in the country.
The next challenge as per Moody’s is government regulations. It has said that support from governments through 5G-friendly policies were essential to boost a successful 5G rollout. In this regards, Hong Kong seems to be a frontrunner. As per OFCA, Hong Kong, where 5G services are expected to be launched in 2020, had allowed for the installation of radio base stations (RBSs) at a scale more extensive than those for 2G, 3G, and 4G services. The regulator explained that a pilot scheme which had been rolled out in this connection since March 2019 was making available more than 1,000 suitable Government venues for installation of RBSs.
“As the use of Government venues for installation of RBSs is only subject to nominal rental charge, these facilitating measures are expected to help the operators speed up and lower the cost of building their 5G networks.” OFCA told International Finance.
Other Asian governments too have shown positive support towards 5G. For instance, in Thailand, the government has extended the payment deadlines for existing telcos to help them maintain their liquidity so they can bid for new 5G spectrum and allow for its rollout in 2020. Meanwhile, in Malaysia, an exclusive body called the National 5G Task Force has been set up to look into all aspects of 5G and ensure its successful rollout.
That said, a few Asian governments are not too proactive towards 5G. Indonesia is one such example. As per various online reports, this Southeast Asian nation will start working towards 5G only after the WRC 2019 event.
Dr. I.R. Ismail MT, Director General of local regulator, SDPPI has, according to aa few media reports, suggested that the government was not in any hurry to provide a 5G network in the country, reasoning that this was still in the development stage in the world.
The last notable challenge as per Moody’s was the need for a reconfiguration of networks and business models. 5G implementation, it said would require installation of billions of new cell sites. This, hinted at the need for additional capital spends by telecom operators.
With regards to this, there are both governments and telecom operators who have shown intent to make investments to boost implementation of 5G in Asia. In Singapore, where a 5G rollout is expected by 2020, telecom regulator IMDA has in association with another state department set aside S$ 40 million to build an open and inclusive 5G Innovation ecosystem. This is expected to be used for 5G technology trials for enterprise use-cases, creating new open testbeds and R&D. This could help offset capital spending, at least in part, for telecom operators. Meanwhile, in Cambodia, Thomas Hundt, CEO of telecom player Smart Axiata, has indicated that Axiata is open to investing millions of dollars to roll out 5G commercially provided it gets government’s nod.
So, while there seems to be quite a few challenges for implementation of 5G in Asia, these could definitely be overcome. What seems more important is teamwork and efforts in the right direction. Ericsson’s spokesperson corroborated the same. He said, for 5G to become a reality in the region, efforts would be required by not just the region’s telecom operators or governments, but the whole ecosystem. And hence, it was working with not just the telecom operators but “partners from other industries as well as academia to develop use cases and share best practices from our experience around the world.”
To conclude, while most Asian countries seem to be putting their foot forward in the race to 5G, there are a few that have adopted a wait and watch policy. And while there are some obstacles to its implementation, different governments, telecom companies and other industry players in the region are doing their bit to tackle the same, to ensure the use of 5G, both at the consumer and industry level, becomes a reality. So, all-in-all, it is pretty evident that 5G will see an effective roll-out in Asia.