By Loewe Tan
With the world entering a period of great social-economic turmoil just as it was gaining a respite from the Covid-19 pandemic, the rollout of 5G technology considered by some economists as the backbone of the Fourth Industry Revolution (4IR) is being impacted. Governments all over the world are now focusing on how to deal with rising interest rates, inflation, volatility in energy and food prices as well as natural and man-made disasters. The 5G torch is flickering.
Compounding the existential climate challenges are proxy wars, sanctions and blockade of ports disrupting supplies of food as well as critical key industrial components, slowing or curtailing factory production — thereby creating anxieties of a recession that in turn will affect consumer spending.
However, amidst the gloomy global uncertainties, the ASEAN region is still expected to emerge strongly from COVID-19. Being the fifth-largest economy in 2019, ASEAN has been pushing out innovations and talents to propel the IoT (Internet of Things) forward leveraging on artificial intelligence (AI), 3D printing, advanced robotics and AR/VR enabled wearables. Its member countries were able to attract a fair number of foreign investments and ASEAN was slowly becoming the hub for consumer demand — with the aim of making 5G as the key enabler in their march towards the 4IR.
According to a report by A.T. Kearney, 5G technology could enhance cross-sector profits and become the 4IR backbone for the ASEAN countries. It maintained that 4IR could generate up to US$150 billion by 2025 and 5G would unlock 40%-50% of that value.
The big question is whether the ASEAN countries can ride out the current turmoil and stay the course to roll out 5G technology?
The authors of the 5G in ASEAN: Reigniting Growth in Enterprise & Consumer Markets, Nikolai Dobberstein and fellow A.T. Kearney partner Hari Venkataramani, cited the case of South Korea deploying 5G network and after commercialising it at a premium rate to consumers, LG UPlus experienced a 2% increase in top-line revenue — and a 4% increase in market share.
Can the success be re-enacted in ASEAN?
With proper government support and increased investments in infrastructure/operations, 5G deployment is no longer a far-fetch concept in ASEAN countries; however, each country will have to conceptualise 5G differently to suit local market conditions.
In broad terms, the two A.T. Kearney partners maintained that there would be five scenarios underpinning the value chain.
The first scenario is a “win-win for all” where operators assist advanced enterprises and OTT providers to embrace 5G connectivity by offering attractive service and solution bundling to them as well as to consumers who are willing to pay for premium performance.
The second scenario is a “win for some, lose for most” where some leading B2B operators in the country while touting the benefits of 5G technology go on a price war, thereby leading to value destruction … and this may put off OTT’s willingness to enter the fray.
The third scenario is where “consumers save the day”. Excited by 5G performance, consumers and gamers are willing to pay for high fidelity FWA (Fixed Wireless Access) and OTT providers for higher quality streaming.
The fourth is a “lose-lose for most” scenario where consumers regards 5G as just another technology layer, especially as rollout is selective and quality not consistent … and open access rules may prevent OTT imposing charges.
The fifth scenario is where “operators are regarded as infrastructure utilities”, focusing on infrastructure rollout and network slicing and wholesale slices to third-party providers, OTTs and MVNOs (mobile virtual network operators) to provide services to enterprises and consumers.
With a low fixed broadband penetration rate at the moment, the ASEAN region has the potential to unlock sustainable commercial value from 5G technology. For example, with about 2.4 million connections, Indonesia is poised to be the leading contender, followed by the Philippines and Thailand. Hence, the market opportunity for 5G is attractive.
The two authors also offer “Use Cases” to substantiate the drift of their report.
Thailand and B2B Use Case
With five times the speed of 4G, Thailand was ranked as the Top 10 cities in the world for 5G performance. Siriraj Hospital, Thailand’s largest hospital, has worked with Huawei to build a smart hospital that provides remote healthcare, imaging and analytics capabilities, and unmanned vehicles.
Moreover, the 5G technology is expected to transform its agriculture and transportation industries by providing remote connectivity between devices and vehicles. Therefore, the 5G technology market is expected to grow to US$1.67 trillion by 2030.
Indonesia and B2C Use Case
Indonesia is the most populous country in ASEAN. Being the fourth-largest consumer market (based on population size), Indonesian telecom operators are growing defensively against the backdrop of an upcoming recession. For instance, mobile and fixed broadband subscriptions are still climbing since 2020. The country has also increased its heavy investments and expanded its fibre-optic network and 4G coverage.
For the operators to profit, it is important that operators offer differentiated services with tiered pricing mechanism such as bundling video streaming, cloud gaming and fixed broadband. Therefore, the 5G mobile subscribers is projected to represent 43.5% of all subscriptions by 2027 in Indonesia.
With faster content delivery, 5G will propel the country forward, as rural areas in the country will also be able to gain access to education, financial systems and more.
Singapore and B2B2X Use Cases
In Singapore, public safety is of utmost importance. Hence, 5G will enhance the connectivity of the security devices and delivery of high-resolution videos and data to the command centre.
Singapore is also in talks with local telecoms to offer wholesale bandwidth to organisations, adding top line revenues for the telecom industry; this will also lead to new business models between operators and integrators, advancing the whole ecosystem.
For ASEAN to achieve its projected 200 million 5G subscriptions by 2025 and to enable telcom operators to reap additional 9% – 12% of current revenues so as to provide high-speed broadband services for ICT sector as well as consumers, all stakeholders, including regulators to address spectrum and cybersecurity issues in a clear and timely manner, must come together to ignite and ensure the 5G torch is not extinguished.
A good example of what a proper 5G rollout can do for a country to move forward and prepare for Industry 4.0 is Singapore.
Khoong Hock Yun, who was the Chief Digital Evangelist and Assistant Chief Executive Officer (Development) at the Infocomm Media Development Authority (IMDA) of Singapore — and regarded by many as the man behind the rollout of 5G — went further and promoted the adoption of 5G and its use in ICT in the republic.
Under his tenure, Singapore became a vibrant ICT hub with ICT industrial revenues grew from S$20 billion in 2000 to S$70 billion in 2015.
Indeed, he was the pioneer behind Singapore’s S$1billion Nation-wide Broadband Network (NGNBN) programme that delivered fibre-optics broadband nationwide to all homes and businesses. As a result, Singapore is able to attract substantial inward investments to accelerate its entry into 4IR.
So, keep faith as 5G can breathe new life into the economies of our fellow ASEAN countries.
Keep the 5G torch burning brightly.