5G follies take on new urgency

5G follies take on new urgency

Failure to adopt standard by 2020 risks losing out to Malaysia, Singapore and Vietnam

Allocation of spectrum meant for 5G technology is now the top concern in telecom circles. (Bloomberg photo)
Allocation of spectrum meant for 5G technology is now the top concern in telecom circles. (Bloomberg photo)

Despite tremendous efforts by the telecom regulator to press ahead with 5G adoption by next year, achieving the goal may be a tall order considering the slow process of spectrum recall and the lack of a strong push by telecom players, wary as they are that such a plan may be too soon for Thailand.

Digital Economy and Society (DE) Minister Buddhipongse Punnakanta has made it clear that he supports the National Broadcasting and Telecommunications Commission (NBTC) removing any obstacles that could hold back 5G adoption by next year.

The clock is ticking on how various challenges must be overcome for the development of the 5G ecosystem on a par with global 5G adoption.

Allocation of spectrum ranges intended for 5G technology is now the top concern in telecom circles.

To pursue 5G development, a mobile operator must hold at least 100 megahertz of bandwidth for upload and download capability. Operators now need more spectrum bandwidth to proceed.

But the regulator faces an uphill task in recalling spectrum ranges that have not been fully leveraged by some agencies and enterprises.

The regulator is seen as having no clear roadmap for frequency allocation. At the same time, major operators appear reluctant to join the bidding for spectrum ranges with steep prices, as there are still no use cases or business models for a commercial 5G drive in Thailand.

What's known is that the country's three major mobile operators have already shouldered a big financial burden from the 3G and 4G auctions, amounting to 300 billion baht, plus an average annual investment in network expansion of 100 billion baht by each operator over the past four years.

Strategy committee

NBTC secretary-general Takorn Tantasith has indicated he will ask the government to form a national 5G strategy committee, chaired by the prime minister, to accelerate 5G adoption next year as planned.

Mr Takorn said many countries, including Indonesia, Malaysia, Singapore and Vietnam, have create such a committee to guide 5G development plans.

The committee, he said, could help clear hindrances involving the recall of spectrum from state agencies and the army to develop 5G technology.

"Accelerating 5G adoption in the country needs not only the NBTC, but also cooperation from other related parties," Mr Takorn said, adding that the process ultimately requires decisions from the top -- the prime minister.

Mr Takorn said Malaysia, Singapore and Vietnam will launch 5G commercial services in June 2020, so Thailand risks losing out on global investment moving to those countries.

The secretary-general said one way to encourage telecom operators to get spectrum licences for 5G development is to offer a grace period for licence payment, which would ease their financial burden.

He said the bid winners could be allowed to pay in instalments, spanning three or five years, thus encouraging them to adopt and develop 5G service.

According to an NBTC report, if Thailand fails to develop a 5G ecosystem by 2030, the country could face an opportunity cost of 2.3 trillion baht, or 20% of the country's current GDP.

Failing to adopt 5G by that time would mean that the manufacturing sector loses the opportunity to create added-value products worth between 70 billion and 1.6 trillion baht.

Mr Buddhipongse has also thrown his support behind the NBTC's push for 5G adoption, stressing that the initiative needs collaboration among related parties.

"I aim to see use case adoption at least in the Eastern Economic Corridor areas by 2020 to attract global tech firms to invest in innovation in the country," he said.

Spectrum recall woes

Prawit Leesathapornwongsa, a member of the NBTC representing the consumer promotion sector, said it's still hard to see 5G adoption or business use cases by 2020, due to various factors.

5G adoption requires investment from telecom operators, ranging from infrastructure and devices to ecosystem development. It also requires proper spectrum ranges for the service.

Operators have shown reluctance to follow suit for fear that their investment may not be economically viable right now.

"Mobile operators have not seen the urgent need to invest in the scheme to catch up with the 5G global trend in 2020," Mr Prawit said.

The operators would need to invest a lot in licences and infrastructure while being unsure what they would get back in return, he said.

Perhaps the biggest stumbling block is the NBTC's task of recalling spectrum ranges held by various agencies.

The 2600MHz band is held by state-owned broadcaster MCOT Plc, which needs to return an unused 190MHz of bandwidth to the NBTC in exchange for compensation. MCOT has urged the NBTC to pay 50 billion baht in compensation.

Another small portion of the 2600MHz spectrum is held by the Royal Thai Army's Signal Department.

According to Mr Prawit, obtaining all the spectra needed for 5G service will be difficult, especially for the high bands being partly used by satellite businesses.

5G ecosystem development will also require cooperation from vertical industries that would directly benefit from 5G use cases.

"The proposed national 5G strategy committee should not be prioritised if it lacks participation from relevant parties," Mr Prawit said.

He said businesses need to see a clear roadmap of the regulator's spectrum allocation plan, as well as examples of how 5G technology can be used in vertical industries.

"The 5G first-mover in the region may not stand to benefit from investment now, compared with one or two years later," Mr Prawit said.

Unclear returns

Pisut Ngamvijitwong, a senior analyst at Kasikorn Securities, said that before telecom operators join the bidding for spectrum, they may have to consider the regulators' measures with regards to licence payment reprieves and other assistance.

Unlike 3G or 4G, which already enjoy crucial demand in the market, 5G is uncharted territory with respect to how returns will pan out after investment, Mr Pisut said.

Regardless of whether 5G is taken up in 2020 or the following year, the NBTC and the government must clear any hindrance to get prepared for 5G adoption, particularly spectrum recall, he said.

He voiced support for the NBTC's initiatives that would grant a grace period for spectrum payment and encourage operators to join the bidding.

No rush to invest

Somchai Lertsutiwong, chief executive of Advanced Info Service (AIS), said 2019-20 should be a period for 5G lab trials and studies of 5G business use cases in the global market.

5G implementation and investment should proceed when the proper time comes or once the 5G ecosystem takes shape, Mr Somchai said.

He said 2021 is the proper time for local operators to embark on the 5G journey.

Spectrum auctions must be designed with practical conditions in order to support 5G infrastructure investment, he said. The first priority should not be steep bidding prices.

Although 5G is an important agenda item for the country's innovation development, "we [AIS] do not want to see the telecom industry in the 5G trap due to premature investment without taking into account real business use cases", Mr Somchai said.

Suphachai Chearavanont, chairman of the board at True Corp, agreed that the right time for Thailand's 5G adoption is 2021, since the industry needs to wait for spectrum allocation and collaboration from all stakeholders.

The company also needs to see a spectrum allocation roadmap from the NBTC, including low-band, middle-band and high-band allocation for 5G technology.

True Move H Universal Communication Co (TUC), the mobile business arm of True, aims to become the first-mover in 5G technology in the country, thanks to the collaboration with its strategic partner, China Mobile, which was the first firm in China to launch commercial 5G development, starting in some parts of Shanghai.

"We [TUC] and China Mobile are studying ways to provide upcoming 5G technology in the country," Mr Suphachai said. Even so, return on investment needs to be figured out first before the company moves ahead with the investment, he said.

Hakon Bruaset Kjol, senior vice-president for Asian partner and external relations at Telenor Group, the major shareholder of telecom company DTAC, said the price of spectrum licences is not the only factor in investment decisions.

The regulator's spectrum roadmap, he said, is key because it will help telecom operators make a precise evaluation of their investment plan.

"The spectrum roadmap is a basket of spectrum which can help telecom operators plan and evaluate their investment because one range is not meant only for one specific tech," Mr Kjol said.

The slow process of spectrum recall and the lack of a strong push by telecom players pose hurdles to 5G adoption in Thailand.

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