Will it be one, two or three for 5G?

Singapore

SINGAPORE telecom operators are divided on the regulator's plans for a 5G network model, though industry analysts largely stuck with the structure put forth by the Infocomm Media Development Authority (IMDA).

In a two-month consultation that closed last week, the IMDA proposed "at least two nationwide networks" for 5G from the get-go. It would also mandate wholesale access to other players, and encourage network sharing.

Yet a "neutral host" model, where a single operator offers 5G wholesale, was also suggested by the industry, in documents out late on Monday.

The Association of Telecommunication Industry of Singapore and national broadband provider NetLink Trust were proponents of this approach, as NetLink touted its experience with Singapore's fibre network.

"The company can be required and incentivised to give access to all interested parties, which could open up the market to greater retail competition," NetLink said in its submission.

Still, StarHub, which wants two independent networks, has hit back. Chief executive Peter Kaliaropoulos, who maintained that a wholesale model would not meet long-term growth needs, called in a press statement for equity-based sharing if only one network is ultimately deployed.

"Spectrum ownership and infrastructure-based operations are core value creators for telcos in the long run, as there is a fair break-even point," he added in an e-mail.

Going in the other direction, TPG Telecom - which is still plodding ahead with its own 4G roll-out - has asked for all network operators to get the same stake in the game.

"Having only two 5G nationwide networks based on the artificial scarcity of 3.5GHz spectrum runs contrary to fundamental economic principles," it argued in its response.

All the same, industry watchers were largely fans of two networks, for the sake of security and competition.

Oliver Wilkinson, a technology, media and telecommunications partner at PwC, said that a key factor for whether to have one neutral network or multiple systems is whether there is enough bandwidth to go around in the key 3.5 GHz spectrum band.

"We have just enough . . . to support two nationwide 5G networks, and not multiple networks," he stressed, adding that two networks would offer some security from redundancy.

With 5G still a novel technology, a single operator runs the risk of stagnating infrastructure, Tony May, a partner in Bain's Telecommunications practice, told The Business Times.

"It makes sense to me to have two networks, to retain some degree of facilities-based competition, so you keep pushing the boundaries for investing in the right technologies."

Mr May vetoed a neutral host model on similar grounds: That may work for fibre networks, which would not need replacement once installed, but "it's a different situation with 5G" as the technology is still evolving and may need to be upgraded more often.

Spectrum allowances on the two proposed networks was another point of contention for the industry.

M1 and StarHub called for identical spectrum parcels to be dished out to the two planned operators, while Singtel suggested that the IMDA give more spectrum to one network and stagger the deployment of the other.

Maybank Kim Eng analyst Luis Hilado suggested in a note on Tuesday that, based on factors such as previous cost-sharing alliances, StarHub and M1 could submit a joint proposal for 5G spectrum or even join forces after the assignments have been made.

Johnson Loh, a regional research analyst, at Credit Suisse, told BT that "the rationale for sharing also goes beyond costs in cities like Singapore".

Joint infrastructure could fix problems around the lack of suitable sites in a high-density environment, as well as "excessive installation of equipment and fibre", Mr Loh added.

In fact, if the industry grapples with the lack of initial use cases, telcos' issues "would be more about the coverage requirements that the Government is putting on these networks", according to Mr May.

Alvin Chia, a research analyst at Phillip Securities, also said that the lack of clear consumer 5G uses "limits incentives for a nationwide roll-out" and called pending quality of service standards a barrier to investment.

The IMDA's proposed requirement for 50 per cent coverage within 24 months should be relaxed, with a longer grace period or lower coverage, Mr Chia suggested. He added that spectrum rights should last at least 20 years, rather than the 12 to 15 years that the IMDA has floated.

The IMDA, which got 62 replies to its consultation, plans to announce its decision near the end of the year.