5G Infra Costs Sharing


Infrastructure upgrades, necessary to accommodate 5G, are estimated to need $1 trillion of investment.

What is the real agenda of different telcos voicing the need to share costs and infrastructure for 5G?


At the Mobile World Congress (MWC) gathering at Barcelona in Spain last week, beginning 25 Feb 2019, the CEOs of some of the biggest name telcos in Europe has come out openly and propose that going forward in implementing 5G, the telcos needs to do more sharing as it is prohibitive and costly for a telco to go it alone in implementing 5G for their own network.


Huawei was not mentioned in this call this week. 


At the same time, Greensill, a leading global non-bank provider of supply chain financing in a report released the same week said that the roll out of 5G technology is expected to hit $2.7 trillion by the end of 2020. Infrastructure upgrades, necessary to accommodate 5G, are estimated to need $1 trillion of investment.


The above estimates excludes funding the growth of the Internet of Things (IoT) and industrial connection to that. The similarity in theme by CEOs of different telcos who competes with each other normally by marketing their speed and coverage to their respective customers, is indeed telling.


Why?


Firstly, it revealed that the western world are actually facing constraints, specifically financing, in implementing 5G. It is common knowledge that telcos in the western world are facing declining subscribers base. Thus, there is a possibility that these telcos might find it difficult to justify a declining return against the substantial costs required to invest in 5G to their bankers and shareholders. The potential of what 5G can do are still unproven. As set out in the Greensill report, to realise this potential would require further substantial funding that has yet to be quantified / estimated by any study at the present moment. It could be extremely prohibitive or affordable. If it is prohibitive, returns could be years in the making instead of mid term.


For different telcos from different countries to 'share' the same call i.e., telcos share infrastructure in investing in 5G is not only unusual but appears to have a different agenda other than offering their subscribers exceptional speed and coverage. If these telcos do finally converge as proposed this week, they would no longer be able to emphasise on their respective speed and coverage in trying to increase their subscriber base. Then where is each other's competitive advantage?


Hmmmm... one wonders. The Game of Thrones in 5G rollout continues...



CALL US

Tel: +603-9171 1562 

Fax: +603-9173 7600

HOURS

Mon - Fri: 9am to 6pm

MEMBER OF SYSTECH BHD
OUR SERVICES

Copyright © 2019 SysArmy Sdn Bhd (1122083-K)