Telco: More capex needed to improve 4G connectivity

KUCHING: More capital expenditure (capex) is needed to improve 4G connectivity in Malaysia, analysts observe in a telecommunication sector report.

According to Am Investment Bank Bhd (Am Investment Bank), this is because only 40 per cent of mobile towers in malaysia is fibe rised.

“Additional spending for 4G is still required given that only 40 per cent of mobile towers in the country are fibe rised, which has resulted in sub-optimal speeds and connectivity for 4G services,” the research firm said.

“Evidently, a substantively higher proportion of fibe rised mobile towers is needed to deploy 5G services.”

Am Investment Bank highlighted that the RM7 billion to RM8 billion investment for 5G deployment in Malaysia indicated by the National 5G Task Force of the Malaysian Communications and Multimedia Commission (MCMC) is likely for targeted sites for high data usage.

This is given that the research firm’s channel checks with industry sources have indicated that the capex per square kilometre (km) could be 10-fold higher than 4G for selected locations.

Over the past five to six years, the research firm estimated that 4G capex spent by telcos has already surpassed RM15 billion to date on a nationwide coverage programme.

“In our view, this low 5G investment estimate could involve only the initial 700MHz and 3.5GHz bands which are planned to be awarded to a consortium of multiple licensees, including foreign operators.

“Recall that this single entity approach is envisioned to minimise costs and prevent duplication of infrastructure against the backdrop of additional spending requirements to enhance 4G networks.

“While the lower 700MHz band would be better utilised for 4G, the MCMC’s intentions are for operators to deploy dynamic spectrum sharing (DSS) for layering coverage for both 4G and 5G. “Similarly, for existing 2300MHz spectrums currently deployed for WiMax and 2600MHz for 4G usage, the MCMC is also open for existing LTE bands to be used for 5G.”