SINGAPORE -- Singapore will increase the number of its 5G networks from two to four, spurring competition and thus facilitating an early rollout in 2020, according to Fitch Ratings.
The global ratings agency said that the decision to increase the number of licenses would intensify competition and spur product innovation, particularly in the enterprise segment. This would drive the execution of timely 5G network services in the city-state, it highlighted in a statement.
Singapore's Infocomm Media Development Authority recently announced the 5G regulatory framework to "drive a timely, cost-effective and robust 5G network rollout" by 2020.
Fitch noted that the regulator plans to assign 5G spectrum based on the financial standing of applicants and their network security designs. IMDA expects to announce the results by mid-2020.
As per IMDA's latest call for proposals, the authority will award four 5G telecom licenses. It will award two mobile network operators the rights to operate nationwide networks -- as proposed in a public consultation in May -- and another two mobile network operators that will have the flexibility to deliver localized 5G services on a non-standalone basis during the initial period. Since a non-standalone network was less costly, it would give small network operators such as TPG a fair chance to roll out 5G services, Fitch said.
For the uninitiated, a blog post by Swedish telecoms group Ericsson explains that non-standalone and standalone are two 5G tracks that communication service providers can opt for when transitioning from 4G to next-generation technology.
5G investment risk will remain low over the next 18 months since two mobile network operators will have the option to offer only localized services in the interim period, and because that spectrum will be reasonably priced, Fitch said.
Deploying 5G services is expensive, as seen from how telecoms groups even in South Korea, which is the most advanced 5G market, are struggling to boost their operating cash flow. This is because 5G deployment requires an entirely new core infrastructure, Fitch noted.
Despite this, the cost of deploying 5G is reasonable in Singapore. The price is $0.07 per MHz per capita, as compared to $0.09 in Hong Kong. In Europe, the cost of 5G spectrum is cheaper, ranging between $0.02 and 0.05 per MHz per capital in countries such as Spain, Finland and the Czech republic. Fitch believes that sufficient and affordable spectrum is crucial to the realization of 5G's potential.
There are four mobile network operators in Singapore: Singapore Telecommunications, StarHub, M1 and TPG. Of these, Fitch believes Singtel is best positioned to win 5G spectrum given its strong financial standing.
Singapore has identified 5G as a key connectivity infrastructure that is capable of supporting the transformation of many industries. IMDA said it had partnered with the National Research Foundation to jointly set aside S$40 million ($29.3 million) to build an open and inclusive 5G innovation ecosystem. The regulator aims to achieve nationwide 5G coverage by 2025, with 50% coverage by 2023, Fitch noted.
Other countries in the region are also in the process of testing and building 5G infrastructure. Viettel, the biggest telco and IT services provider in Vietnam, has been awarded the country's first 5G trial license. In addition, Maxis, a major Malaysian telco, recently signed an agreement with China's Huawei to build its 5G network.
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