KUALA LUMPUR, Oct 30 — Roll-out of 5G services could boost annual revenues of Malaysian telecom operators by up to RM3.76 billion (US$900 million) starting 2025, according to a study commissioned by global technology firm Cisco.
The study forecast 5G penetration in major countries in the ASEAN region to be 25 to 40 per cent by 2025, with Malaysia expected to see nearly a 40 per cent penetration.
“The total number of 5G subscriptions in ASEAN is forecast to exceed 200 million in 2025,” Cisco said in a statement today.
Cisco Malaysia managing director Albert Chai said Malaysia’s commitment to the successful roll-out of 5G could be seen through the recent 2020 Budget allocation that included a RM50 million grant for the development of the 5G ecosystem and an additional RM25 million in matching grant funds for the promotion of digital application pilot projects for fibre optics and 5G infrastructure.
“This has been complemented by a private-public sector project that will see 5G use cases rolled out on 32 sites across six states,” he added.
Cisco said telecom operators were likely to invest about RM41.83 billion (US$10 billion) into the region’s 5G infrastructure by 2025.
“In ASEAN, telecom operators are likely to continue to invest in upgrading their 4G networks and build the 5G capabilities in a phased manner. This will allow 4G and 5G to operate simultaneously and help the operators manage their capital expenditure and return on investment in a sustainable manner,” said Cisco managing director (ASEAN, service provider) Dharmesh Malhotra.
The study indicates the need for the region to address several key challenges to unlock the 5G potential, most importantly the slow availability of spectrum for 5G services and the resulting suboptimal network roll-out.
Other challenges are consumer pricing and value-enhancing uses for the enterprise side.
“It would be fatal for operators to engage in a price war just to attract a higher number of subscribers in the hope they can charge them more at a later stage,” Cisco said.
The study, titled “5G in ASEAN: Reigniting growth in enterprise and consumer markets”, noted that 5G promised speed up to 50 times faster, 10 times more responsiveness, and much lower power connectivity than 4G.
“This will be driven by a combination of three distinctive features – high throughput, ultra-low latency, and low power connectivity,” Cisco said.
The study, which was conducted by management consulting firm AT Kearney, also indicated that speed, low latency, and enhanced connectivity would help telecom operators provide super-fast Internet connections that enable streaming of high-definition videos, cloud gaming and delivery of interactive augmented and virtual reality-powered content to consumers.
It would also help to fast-track the commercialisation of several advanced use cases of 5G, including smart cities, the fourth industrial revolution, large-scale Internet of Things deployments, and more.
“This will enable telecom operators to increase revenues both from consumers as well as enterprise clients,” it added.