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Connecting 5G opportunities in Southeast Asia

Anurag Gaur
Anurag Gaur • 5 min read
Connecting 5G opportunities in Southeast Asia
The prospect of 5G has long presented a pivotal promise for businesses, governments and citizens across Southeast Asia.
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The prospect of 5G has long presented a pivotal promise for businesses, governments and citizens across Southeast Asia, offering a future of high-speed, low-latency, reliable data networks.

Global mobile data has seen remarkable growth over the last decade, with the Cisco Visual Network Index (VNI) Forecast projecting global internet traffic will reach 235.7 exabytes per month in 2021, up from 73.1 exabytes per month in 2016.

The Covid-19 pandemic has amplified this shift, with the proliferation of remote working and digital business solutions accelerating our data-thirsty transition.

Early 2G and 3G technologies offered just a hint of the current promise. 4G technologies provided a clearer window into the potential of mobile connectivity, allowing cost-effective uses from multimedia streaming to reliable voice and video calls.

5G promises a more transformative solution that goes beyond the earlier iterations of mobile technologies, powered by additional C-Band and mmWave spectrums alongside innovations such as active antennas and network function virtualisation.

This is a step change in connectivity that promises 50-times faster speeds and ten-times more responsiveness in supporting innovation, but one which requires a considered strategic approach for nations in Southeast Asia.

This is not simply about faster connections — 5G provides technological innovations such as active antennas and network function virtualisation which will unlock powerful and valuable use cases for business and society.

These widespread and diverse use cases offer promising evolution in both business-to-consumer (B2C) and business-to-business (B2B) arenas. The 5G B2C opportunity is being driven by mobile broadband and fixed wireless.

Enabling new opportunities

These 5G deployments will allow high-speed internet capable of enabling high-definition videos, cloud gaming, virtual and augmented reality (AR/VR) content and holographic communication. Growth in fixed wireless access (FWA) is also enabling speedy internet in markets where fixed broadband penetration is low. In the B2B ecosystem, 5G encompasses a wide variety of use cases that can be deployed across various industries. 5G will enable new business models leveraging the Internet of Things (IoT), analytics and smart cities with the potential to impact multiple industries. It will accelerate deployment of use cases with artificial intelligence (AI) data from connected objects at scale, use of autonomous guided vehicles (AGVs), drones, and immersive collaboration technologies based on AR/VR.

However, the roll-out of 5G is not without its challenges. The availability of 5G spectrum is one critical hurdle. Satellite networks in the mid-band spectrum (3,500MHz), and overlapping broadcast television usage of the low-frequency spectrum (700MHz) both constrict the currently available bandwidth. Managing the complex coordination between countries and operators will require a strategic approach.

To support the innovative use cases, operators will have to invest in upgrading their networks and installing new 5G macro sites. The core networks will need to be designed to support new features such as network slicing, and enable improved quality of service and cloud-native friendly architecture as well as new fibre-optic infrastructure. All these require a significant amount of capital expenditure and investment. These will have to be supplemented alongside investments in building and maintaining 3G and 4G networks to support the existing subscribers on those networks. Approaches across Southeast Asia Given the massive capital commitment required and the development of revenue streams from new business cases, the 5G technology rollout will be gradual. Unleashing this generational change in connectivity will require coordinated efforts from regulatory authorities.

This will necessitate intervention in both passive and active infrastructure sharing and policies that support the new network infrastructure models.

We are seeing a range of different approaches being undertaken across the region. Last year, Thailand adopted a traditional spectrum auction, raising US$3.2 billion ($4.3 billion) in a competitive auction selling off 48 licenses for 5G spectrum portions in the 700MHz, 2,600MHz and 26GHz range.

Indonesia originally adopted a similar approach, with an auction for the 2.3GHz band held in February last year. The outcome was ultimately revoked, as Indonesia made steps to align the auction process with local regulations, showing the challenging nature of this transition. In March, a spectrum auction was reopened on a ‘beauty auction’ framework.

While the Philippines was the first country to assign a large amount of spectrum in the 3.5GHz band for mobile and other wireless operators, Singapore has now taken bold steps to become an innovative frontrunner in the region.

Infocom Media Development Agency (IMDA) has adopted an ambitious 5G agenda, leading to an innovative partnership between winning bidders of a beauty contest that have inspired a joint rollout approach. In April last year, IMDA announced Singtel and a consortium made up of StarHub and M1 as the contest winners.

Deploying networks

Operators have deployed standalone 5G networks in 2021, and are required under the agreement to ensure at least 50% coverage by 2022, scaling up to nationwide coverage by 2025. This marks Singapore as the first country in the world to mandate standalone architecture with extensive coverage that ensures nationwide accessibility which can empower use cases.

Malaysia is another unique example, taking the novel approach of a special purpose vehicle (SPV) to drive forward 5G adoption.

Digital Nasional Berhad will lead with 5G infrastructure development, operation, and leases to telco operators. Existing operators will lease wholesale capacity from the SPV, competing on a service rather than network proposition.

This 5G approach forms part of the wider Malaysia Digital Economy Blueprint (MyDIGITAL), which seeks to drive forward the value generation of digital transformation. This structure represents the first global example of an SPV approach to 5G rollout and will require careful collaboration with stakeholders.

While the routes forward chosen by nations in Southeast Asia may be different, the ultimate end point for 5G rollout is clear.

If these ambitions are realised, business, society, and government stand to reap the benefits of a reliable, high-speed and low-latency connected landscape.

Anurag Gaur is the lead knowledge analyst, TMT at Boston Consulting Group

Photo: Albert Chua/The Edge Singapore

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