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5G bid deadline extension may be 'prudent for industry'

Nitty-gritty of collaboration deals is likely behind the month-long holdup in operators' bid readiness, say market watchers

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Sharing 5G networks has been touted as a way to spread the financial load of the wireless technology, but actually getting players to work together may be like herding cats.

Singapore

SHARING 5G networks has been touted as a way to spread the financial load of the wireless technology, but actually getting players to work together may be like herding cats.

The nitty-gritty of collaboration deals is likely behind the month-long holdup in operators' bid readiness, watchers told The Business Times.

But they also agreed that there ought to be little delay to Singapore's overall 5G roll-out plans, even with a longer runway for mobile network operators (MNO) to apply for licences.

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The Infocomm Media Development Authority on Thursday pushed back the closing date for 5G proposals, from Jan 21 to Feb 17, while citing operators' requests for more time.

Last year's 5G industry consultation deadline was similarly extended, again at telecom operators' request.

Still, Thompson Teo, professor of analytics and operations at the NUS Business School, was not fazed about MNOs' prospects, saying: "As this requires significant investments, it is prudent for the industry to seek more time so that they can do a deeper analysis of what they can or cannot do."

With two nationwide and up to two localised 5G networks on the table, the market is abuzz over how MNOs could opt for joint ventures or consortia to make stronger bids.

That's especially since "telcos are grappling with the need to balance unrelenting capex demand, uncertain economics of 5G services, as well as revenue pressure", as Credit Suisse analyst Johnson Loh summed it up.

"Potential discussion or negotiation between MNOs and regulator on the terms of network-sharing partnership could add to such complexity."

Financial capability is among the judging criteria for proposals, along with bid size, plus network design, resilience, roll-out and performance.

Sachin Mittal, who covers telecoms at DBS, reaffirmed a positive view on the 5G licensing structure, especially with the leeway for tie-ups.

Compared with earlier 4G networks, 5G has a lower spectrum price and longer roll-out, Mr Mittal noted - which bodes well for MNOs' ability to pay: "Annual 5G capex should be similar to 4G capex, despite 5G being two to three times more expensive."

To be sure, telcos might need more time to come up with business plans for 5G use cases, said Juvanus Tjandra, head of technology, media and telco at KPMG, who noted that last year's overlapping window for digital bank licences may have split the industry's attention.

"5G requires you to create the demand or the killer apps, to create the opportunities for the fast, big pipe. From that perspective, the business case requires a lot more thinking," he told BT on the phone. "The network roll-out is not an issue in Singapore; it's just how to create the demand."

But all the same, Prof Teo told BT: "The one-month extension should be sufficient for MNOs to seek clarifications with the authorities as well as better negotiate their partnerships."