According to a recent report by Moody’s Investors Service, countries in the Asia-Pacific region, including India, that are late in adopting 5G technology will get insignificant revenue from the services.
Governments in late adopter markets will have to play a significant role in 5G services roll-out, the report added. Revenues from 5G services will be insignificant for the late adopter markets of Bangladesh, Indonesia and India. The report also said late adopter markets could benefit from concrete timelines for 5G spectrum auctions and government support.
Further, it added that governments have been one of the main drivers in early adopter markets like China, Hong Kong and Malaysia. Support typically comes in the form of reasonable spectrum prices and infrastructure planning. According to the report, the four pioneer markets, which include (South) Korea and China, will maintain their lead in the adoption of 5G services. Among the four early adopter markets, Hong Kong SAR, China was the first to roll out 5G services, and its 5G adoption rate will be the highest. While, operators in Hong Kong and Philippines commercially launched 5G networks in April 2020 and 2019, respectively, the telcos in Singapore and Malaysia are expected to begin commercial roll-out of 5G services by 2021-end, as per the report.
Further, it said that for the late adopters – Bangladesh, India and Indonesia, we do not expect material 5G mobile service revenues over the next 12-18 months. The late adopters will continue to focus mainly on increasing capacity for 4G networks, with investments in 5G infrastructure mainly for spectrum payments and to keep pace with competition. It added that in late adopter markets, coronavirus has delayed the roll-out of 5G networks, and lockdowns have also caused operational disruptions and delayed the roll-out of 4G networks, which operators are now prioritising. However, pending spectrum allocation and operators in India are conducting advanced trials on 5G to improve their readiness to launch, the report said. Further, it said that lower spectrum prices would be beneficial in Bangladesh and India, where spectrum has been prohibitively expensive. Local operators have been lobbying for more reasonable 5G spectrum prices. However, it expect a low likelihood of government subsidies, given the history of high reserve prices set by the governments for spectrum auctions amid ongoing fiscal deficits.
As per Moody’s, telcos in South Korea and China have had early success in increasing average revenue per user (ARPU) for 5G services.
