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The 5G Frontier (The Business Times)

DRIVERLESS cars, drones and virtual reality. These are just some of the headline-grabbing technologies that could be part of our lives once fifth-generation, or 5G, mobile networks roll out, telcos say.

5G networks would enable faster and more reliable connections, which could speed up the Internet of Things (IoT) and open new fronts for telco incumbents under pressure. A pilot network in the one-north district is in the pipeline, announced jointly by Singtel and Ericsson in July. M1 will start South-east Asia field trials, and StarHub plans to switch on 5G base stations, both by year-end. But experts and industry players acknowledge that there may be a long road to 5G coverage in Singapore, not least because the dots that are to be connected aren't all in place yet. While the propounded benefits of 5G include higher data volumes and speeds, some raise eyebrows at holding trials and building infrastructure for a system not yet in place.

Shekar Ayyar, executive vice-president for strategy and corporate development at communications company VMWare, says: "The rational way is to look at the market demand today, and then, based on that, come up with an ROI (return on investment) use case and therefore go and make the deployment of investment.

"Unfortunately, I think that the kinds of applications that are going to be opened up by true 5G, that are going to leverage that architecture, are not yet there today. Trying to build your business case based on existing applications is, to me, a fallacy." Still, he says that both today's and next-generation applications - such as augmented and virtual reality, artificial intelligence and IoT - will "inevitably" need 5G to function.

Setting up 5G "is crucial to the development of a smart city", as Navin Vohra, CommScope vice-president for Asia-Pacific service provider sales, points out. "With 5G, we will see IoT sensors and devices everywhere, and there will be bespoke applications such as traffic management, dynamic parking, public Wi-Fi, smart meters, for land-scarce Singapore... Even if every corner of the city is 'smart', it would be pointless if data cannot be transmitted in real time to deliver critical information."

With the IoT expected to add billions more smart devices, such as robotic manufacturing in smart factories, "network operators need to consider how to meet increased connectivity demands", Mr Vohra adds.

Neo Teck Guan, director of strategy marketing for Huawei South Pacific, also notes that connected cars and drones, as well as virtual and augmented reality, are some use cases that are gaining traction here. "But how feasible the use cases are depends very much on the industry's and end-users' acceptance of the packaged services, which are too early to determine at this stage," he says.

Mark Jansen, technology, media and telecommunications (TMT) industry leader at PwC Singapore, says that use cases "will be both public and enterprise... because the initiatives around smart cities also draw in enterprise to do things in an ecosystem".

Who stands to gain?

Drone deliveries and augmented reality experiences would certainly be life-changing for ordinary citizens. But telcos may also be counting more on 5G tech than consumers are aware, as their core consumer businesses get eroded by virtual operators and over-the-top services. Fixed wireless access - a 5G alternative to fibre broadband networks, and one that Singtel's Australian subsidiary Optus is eyeing - is pegged as the immediate consumer use case.

But Andrew Milroy, head of Asia-Pacific consulting for technology consultancy Ovum, tells The Business Timesthat "in Singapore, because of the high level of fixed broadband connections, the urgency from the consumer perspective won't be as huge". StarHub, for one, has an eye on new enterprise solutions, and work on a pilot 5G network is under way, says its chief technology officer Chong Siew Loong. "Where 5G would shine is in the enterprise space," he says. "Its ultra-low-latency data transfer and network slicing abilities, for instance, can open up new business opportunities in terms of digitalisation and automation."

Credit Suisse analyst Johnson Loh also notes that some early industry trials are focusing on narrower, enterprise-related scenarios, such as process automation and drones to carry out tasks like building inspections. "Over time, new innovative consumer-related use cases should appear as the technology matures. Meanwhile, given the telcos' declining traditional revenue streams, we have seen a greater focus towards product and service offerings in the enterprise sphere, such as cybersecurity and cloud-based solutions."

Whether telcos are truly ready to put their money where their mouth remains uncertain. Ovum's Mr Milroy believes that, while smart factory adoption of 5G could be on the cards, "the extent to which people are going to make the investment in it is still inconclusive". He argues that telcos, facing stiff competition, would be less willing to make costly investments - especially with the business case as yet unclear. "From a consumer perspective, we've done a lot of work around 5G," he says, adding that the market has eyed localised applications such as stadium coverage. "In spite of the early expectation... the use case, on a large scale, has to be consumer."

Likewise, Kenny Liew, an analyst at Fitch Solutions, predicts that 5G won't yield new gains in the enterprise business: "While having the first-mover advantage is important, we maintain that 5G will be niche at the start, and being late to the market will not have adverse effects on any telco." Yet Mr Liew is bearish on consumer demand too: "Singapore, with its technologically advanced populace, will be keen to adopt 5G when consumer handsets are launched. But for the most part, if 4G trends are to be believed, this will not have a very significant impact on the mobile ARPUs (average revenues per user) of telcos."

Mr Ayyar predicts Singapore's network operators will pick specific business niches for a 5G roll-out. "Not that they'll remain within their boxes and offer only one service or the other. But I think the reasons and the justifications... will be segmented as they begin." M1's chief technical officer Denis Seek agrees: "Eventually, it's a matter of time that of course everyone will cover a big area, because Singapore is a small island. But (operators) may start off very differently, and they will grow the network very differently."

Singtel, Singapore's biggest telco, referred BT to an earlier statement by group chief technology officer Mark Chong, which said 5G could "accelerate the digital transformation of industries, as well as empower consumers with innovative applications".

To read the rest of the article, please use this link: https://www.businesstimes.com.sg/brunch/the-5g-frontier


By The Business Times | November 2nd, 2018

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