5G services could boost annual revenues of Singapore telecom operators by as much as US$500 million by 2025, according to a new study commissioned by Cisco.
The study, conducted by management consulting firm AT Kearney, highlights that 5G promises faster Internet connections that enable streaming of high-definition videos, cloud gaming and delivery of interactive augmented and virtual reality (AR/VR)-powered content to consumers. The rollout of 5G services will also help to fast-track the commercialisation of advanced use cases of 5G, including smart cities, Industry 4.0, large-scale Internet of Things (IoT) deployments, and more.
5G has speeds up to 50 times faster, 10 times more responsiveness, and lower power consumption than 4G. The high throughput, ultra-low latency, and support for connections from devices that use very little power (low-power connectivity) will enable telecom operators to increase revenues from consumers and enterprises, the report said.
Titled 5G in ASEAN: Reigniting growth in enterprise and consumer markets, the study states that Singapore will lead the region in launching 5G as early as 2020. Initial growth of 5G adoption is expected to come from high-value customers and high-value devices, and subscriptions will start to scale as devices become more affordable.
As a result, the study expects 5G penetration to be around 25 to 40% in major countries in the region by 2025, with Singapore seeing more than 50% penetration. The total number of 5G subscriptions in ASEAN is forecast to exceed 200 million in 2025.
Naveen Menon, President ASEAN at Cisco, said: “The expected rollout of 5G services comes at a perfect time for telecom operators. The usage of cellular data is growing rapidly as users consume increasing amount of services and content on their personal devices. At the same time, enterprises are looking to leverage the Fourth Industrial Revolution (4IR), which is underpinned by artificial intelligence, IoT, 3D printing, advanced robotics and wearables, to boost growth.
"The successful adoption of these technologies is largely dependent on the underlying connectivity. This provides a huge opportunity for telecom operators to increase their presence in the enterprise market and sustain their long-term growth.”
As telecom operators get ready to roll out 5G services, they are likely to invest about US$10 billion into the region’s 5G infrastructure by 2025.
Dharmesh Malhotra, MD ASEAN, Service Provider, at Cisco, said: “The rollout of 5G services will require substantial investments in technology to modernise underlying networks. In ASEAN, telecom operators are likely to continue to invest in upgrading their 4G networks and build the 5G capabilities in a phased manner.
"This will allow 4G and 5G to operate simultaneously and help the operators manage their capex and ROI in a sustainable manner. Cisco is partnering with network operators in their journey to 5G rollout and is already engaged with customers in ASEAN on 5G transformation.”
The study also highlights challenges for the region:
Slow availability of spectrum for 5G services
This would result in suboptimal network rollout. 5G will be deployed across multiple bands, with three bands likely to be important globally in the near-term: low-band (700 MHz), mid-band (3.5 to 4.2 GHz), and high-band on the mmWave spectrum (24 to 28 GHz).
In ASEAN, many of these bands are already being used to provide other services. Low-band is being used for free-to-air (FTA) TV, and mid-band is being used for satellite services. Although mmWave bands are available, deployment will need to be combined with low-band spectrum to enable economically-viable coverage of suburban and rural areas as well as in-building access.
Attracting customers
In addition, operators will need to craft 5G product and pricing portfolios that maximise their revenue while appealing to their customers. They also need to migrate consumers to the high-speed network. Consumers are excited about 5G and are willing to pay for better-quality services, unlike with 3G and 4G technology. It would be fatal for operators to engage in a price war just to attract a higher number of subscribers in the hope they can charge them more at a later stage.
On the enterprise side, operators will need to build new capabilities and bundle enhanced connectivity with solutions and applications to help customers understand, implement, and scale up value-enhancing use cases. They will also have to contend with a new set of competitors that provide private networks to enterprises.
Nikolai Dobberstein, Partner at AT Kearney and a lead author of the report, said: “The overall potential of 5G rollout in ASEAN is substantial. However, to live up to the full potential, the region will need to address the main challenges. This will require a coordinated effort from all stakeholders — regulators, operators, and enterprises. Given the ecosystem challenges and the large value at stake, regulators will play a central role.
"Among the key issues that regulators would need to take the lead on are: ensuring near-term spectrum availability, fostering infrastructure sharing and nurturing the development of national cybersecurity capabilities across the region.”
The study highlights that in Singapore, the Info-communications Media Development Authority (IMDA) is considering all three bands for 5G. The low bands are already allocated to telecom operators on technology-neutral terms and can be repurposed for 5G. Co-existence trials are ongoing in the 3.5 and 28 GHz bands.
The study, conducted by management consulting firm AT Kearney, highlights that 5G promises faster Internet connections that enable streaming of high-definition videos, cloud gaming and delivery of interactive augmented and virtual reality (AR/VR)-powered content to consumers. The rollout of 5G services will also help to fast-track the commercialisation of advanced use cases of 5G, including smart cities, Industry 4.0, large-scale Internet of Things (IoT) deployments, and more.
5G has speeds up to 50 times faster, 10 times more responsiveness, and lower power consumption than 4G. The high throughput, ultra-low latency, and support for connections from devices that use very little power (low-power connectivity) will enable telecom operators to increase revenues from consumers and enterprises, the report said.
Titled 5G in ASEAN: Reigniting growth in enterprise and consumer markets, the study states that Singapore will lead the region in launching 5G as early as 2020. Initial growth of 5G adoption is expected to come from high-value customers and high-value devices, and subscriptions will start to scale as devices become more affordable.
As a result, the study expects 5G penetration to be around 25 to 40% in major countries in the region by 2025, with Singapore seeing more than 50% penetration. The total number of 5G subscriptions in ASEAN is forecast to exceed 200 million in 2025.
Naveen Menon, President ASEAN at Cisco, said: “The expected rollout of 5G services comes at a perfect time for telecom operators. The usage of cellular data is growing rapidly as users consume increasing amount of services and content on their personal devices. At the same time, enterprises are looking to leverage the Fourth Industrial Revolution (4IR), which is underpinned by artificial intelligence, IoT, 3D printing, advanced robotics and wearables, to boost growth.
"The successful adoption of these technologies is largely dependent on the underlying connectivity. This provides a huge opportunity for telecom operators to increase their presence in the enterprise market and sustain their long-term growth.”
As telecom operators get ready to roll out 5G services, they are likely to invest about US$10 billion into the region’s 5G infrastructure by 2025.
Dharmesh Malhotra, MD ASEAN, Service Provider, at Cisco, said: “The rollout of 5G services will require substantial investments in technology to modernise underlying networks. In ASEAN, telecom operators are likely to continue to invest in upgrading their 4G networks and build the 5G capabilities in a phased manner.
"This will allow 4G and 5G to operate simultaneously and help the operators manage their capex and ROI in a sustainable manner. Cisco is partnering with network operators in their journey to 5G rollout and is already engaged with customers in ASEAN on 5G transformation.”
The study also highlights challenges for the region:
Slow availability of spectrum for 5G services
This would result in suboptimal network rollout. 5G will be deployed across multiple bands, with three bands likely to be important globally in the near-term: low-band (700 MHz), mid-band (3.5 to 4.2 GHz), and high-band on the mmWave spectrum (24 to 28 GHz).
In ASEAN, many of these bands are already being used to provide other services. Low-band is being used for free-to-air (FTA) TV, and mid-band is being used for satellite services. Although mmWave bands are available, deployment will need to be combined with low-band spectrum to enable economically-viable coverage of suburban and rural areas as well as in-building access.
Attracting customers
In addition, operators will need to craft 5G product and pricing portfolios that maximise their revenue while appealing to their customers. They also need to migrate consumers to the high-speed network. Consumers are excited about 5G and are willing to pay for better-quality services, unlike with 3G and 4G technology. It would be fatal for operators to engage in a price war just to attract a higher number of subscribers in the hope they can charge them more at a later stage.
On the enterprise side, operators will need to build new capabilities and bundle enhanced connectivity with solutions and applications to help customers understand, implement, and scale up value-enhancing use cases. They will also have to contend with a new set of competitors that provide private networks to enterprises.
Nikolai Dobberstein, Partner at AT Kearney and a lead author of the report, said: “The overall potential of 5G rollout in ASEAN is substantial. However, to live up to the full potential, the region will need to address the main challenges. This will require a coordinated effort from all stakeholders — regulators, operators, and enterprises. Given the ecosystem challenges and the large value at stake, regulators will play a central role.
"Among the key issues that regulators would need to take the lead on are: ensuring near-term spectrum availability, fostering infrastructure sharing and nurturing the development of national cybersecurity capabilities across the region.”
The study highlights that in Singapore, the Info-communications Media Development Authority (IMDA) is considering all three bands for 5G. The low bands are already allocated to telecom operators on technology-neutral terms and can be repurposed for 5G. Co-existence trials are ongoing in the 3.5 and 28 GHz bands.
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