• Mobile broadband: Eyeing 5G efforts
Malaysia's mobile broadband has experienced an exponential growth since 2014 where the penetration rate surged from 39 per cent with 17.6 million subscribers to 81 per cent or about 35.3 million subscribers in 1Q18.
This is attributed to to the affordable handsets and continued widening fourth generation mobile (4G) coverage whereby private players namely Maxis Bhd, Digi.com Bhd and Celcom's 4G's coverages reached 92,87 and 87 per cents of the population areas respectively, as of the end of 2017.
While Kenanga Research expect the mobile broadband subscribers base will continue to climb; the growth rate, however, is expected to be moderate in view of the current high penetration rate.
While 4G network is expected to continue playing a vital role, at least for the next couple of years, to lure mobile broadband subscribers, the local incumbents have started to take aproactive step to trial the upcoming fifth generation mobile (5G) technology.
This comes as Celcom had run Malaysia's first-ever 5G trial in partnership with Ericsson in mid-2017.
Apart from Celcom, Digi's parent Telenor Group has also started its first 5G test since March last year with technology partner Huawei, and will start with offering 5G in Norway before expanding to other countries.
“4G has become the leading mobile network technology worldwide since the launch of early commercial services approximately 10 years ago.
“While the 4G technology is set to remain as the key network for the next couple of years, the mobile industry continues to make progress with 5G, including trials and the approval of the non-standalone 5G new radio specifications in December 2017.
“A number of mobile 5G commercial launches are expected over the next three years with China, the US and Japan set to be the leading countries in 2025, according to GSMA.”
The research outfit also expected two-thirds of mobile connections across the world will operate on high-speed networks by year 2025, with 4G accounting for 53 per cent of total mobile SIMs and 5G at 14 per cent.
5G: The future network
To support customer migration and further drive consumer engagement in the digital era, global telco analyst GSMA is predicting that mobile operators will invest US$ 0.5 trillion in mobile capex worldwide between 2018 and 2020.
GSMA estimated that between 2018 and 2020, mobile operators in Asia Pacific are expected to invest 14 per cent of revenue or circa US$188 billion in mobile capex (excluding onetime spectrum acquisitions) with key focus still on upgrading 4G networks to faster speeds and lower latencies.
“Moving forward, network investments are set to shit to the 5G progressively, although there are little guidance on the potential necessary investment,” Kenanga Research opined.
While the network investments will depend on a number of factors ( such as business model, targeted coverage area, the range of spectrum bands and the availability of fibre infrastructure), the research house said 5G is expected to cost less per unit of data than 4G given the better network and equipment efficiencies (as a result of newer technology) as well as the potential cost savings arising from network optimisation.
“Based on our understanding, network deployment strategies have firmed up to involve the dual use of standalone and nonstandalone architectures,” it said.
“Standalone builds refer to a new network, including sites, RAN and core (contigent on NR standars) while the nonstandalone depoloyment would piggyback 5G RAN on existing LTE sites.
“If a lower frequency spectrum is available for use, operator indications are that deployment would use a standalone model in urban centres, according to GSMA.
“Alternatively, should lower frequency spectrum be not available; a dual-use strategy could be used where standalone networks are deployed in dense urban centers with nonstandalone builds in suburban and rural areas.”
While many things along the journey to 5G are still uncertain, many elements of 5G technology are likely to be build on the current 4G networks to optimise the infrastructure investment, according to Mckinsey.
That said, mobile operators can take an evolutionary approach to infrastructure investment, where operators could begin by upgrading the capacity of their existing 4G macro network by refarming a portion of their 2G and 3G spectrum, or by acquiring additional spectrum when available.
Prepare for 5G in Malaysia by 2022, 2023
Supporting the 5G movement is Ericsson ( Malaysia) Sdn Bhd President Todd Ashton who said telcos in Malaysia must be ready to embrace 5G as it is expected to be used widely in Malaysia by 2022- 2023.
He believed that the use of 5G in the country could be implemented less than five years if the groundwork is done now.
“The spectrum for 5G will be agreed globally in 2019 and the whole industry will need to create products once it has been agreed upon,” said Ashton at a press conference earlier this year.
However, Ashton warned that it would take some years before the 5G becomes a mainstream in Malaysia as the infrastructure would need time to be put in place.
Ericsson has been collaborating with Universiti Teknologi Malaysia since 2016 and Celcom Axiata Bhd, from last year, to conduct ground studies on the implementation of 5G.
“The studies conducted so far include the propagation of radio in tropical climate, the milimetre wave and spectrum that will be used for 5G and how 5G will work in Malaysia,” he said.
Players in countries such as South Korea are expected to launch 5G this year for the Olympic Winter Games in February, while Japan, China and the US are also anticipated to deploy the technology in 2018.
According to a recent mobility report by Ericsson, the global market is predicted to boast over one billion 5G subscriptions for enhanced mobile broadband by 2023, covering 20 per cent of the world’s population.
The 5G growth is expected to be driven by both organic demand due to its faster coverage speed and lower cost compared to 4G. It also offers new case uses, extending into fixed wireless access, smart manufacturing, transportation and logistics, and power- grid management.
In other 5G efforts, Malaysia is roping in South Korea’s mega conglomerate, SK Group, to realise its smart cities ambition -- marking Cyberjaya to be the first smart city in Malaysia to boast 5G technology and other smart city infrastructures.
Government-owned Cyberview Sdn Bhd in February this year signed a memorandum of understanding with SK Group to develop Blue Ocean Smart Cities in the country, starting with Cyberjaya.
The move came following Malaysia’s partnership with Ali-baba Group to set up a traffic control system harnessing artificial intelligence for Kuala Lumpur.
SK Group’s unit, SK Telecom chief executive officer Park Jung-ho said the firm intended to test its 5G technology in Cyberjaya and South Korea by the end of the year.
He said the company was looking forward to working with telecommunications companies in Malaysia.
“( We hope) the ( Malaysian) government can provide a spectrum for 5G, because for us to roll out this technology, we need the right equipment and infrastructure.
“We expect to test 5G in South Korea later this year and hope to do so simultaneously in Malaysia.
“This is because you ( the government) provide a more open environment, especially in terms of legislation (for this technology).”