ASEAN telcos teased with annual $6 billion 5G boon by 2025

18 September 2019 3 min. read

 A study conducted by global consultancy A.T. Kearney has concluded that 5G technology could deliver operators up to $6 billion in bonus annual revenues across the ASEAN region by 2025.

In a report commissioned by Cisco, global management consultancy A.T. Kearney has calculated that ASEAN telecom operators could be in line for a potential $6 billion boost to annual revenues within five years of the initial rollout of 5G mobile technology – which is set to be led by Singapore in 2020. While Indonesia has the highest value potential in the region, Singapore is expected to best capitalise.

Although the public buzz around 5G has been somewhat generally muted compared to other more prominent emerging technologies, the further development and widespread use cases of much of that technology, such as AR/VR, advanced robotics and IoT, will be underpinned by 5G, which A.T. Kearney notes will deliver speeds up to 50 times faster, with 10 times more responsiveness and much lower power connectivity than 4G.ASEAN 5G subscriptions are expected to reach 200 million by 2025On the back of existing ICT maturity and projected local penetration rates upwards of 56 percent by 2025, telcos in Singapore could be eyeing a $500 million-plus annual slice of the regional share as a calculation of unrestrained potential, with Singapore the only ASEAN nation predicted to come close to capturing its potential – at between $310-$430 million of the total $370-$510 million at stake. Other ASEAN nations sit closer to only 50 percent.

Indonesia, for example, has the highest unrestrained potential, at between $1.4 billion to $1.8 billion – thanks in part to the size of its manufacturing sector and high number of data users, but is only projected to capture value of between $1 billion to $1.3 billion, leaving at the very least $100 million of the table. Thailand, Malaysia and the Philippines meanwhile feature expected upper value-capture rates at less than half the bottom of the potential range.

Value at stake for ASEAN telcos through 5GBefore arriving at their conclusions, the analysts from A.T. Kearney applied game theory principles to determine the best possible scenarios for each country in ASEAN, assessing consumer and enterprise ICT maturity and the ability of operators to generate value in the enterprise space, the eagerness of policymakers to push 5G, and past competitive pricing behaviors – an issue which has created a near unsustainable SEAsian telecom market.  

Singapore was determined as likely to experience a win-win. “Telcos in Singapore are relatively more advanced in terms of their mobile and enterprise capabilities, and there is a big push for the digitalisation of enterprises in the country,” commented Nikolai Dobberstein, who heads up A.T. Kearney’s Communications, Media and Technology practice for APAC. “At the same time, consumers in the country are tech-savvy and willing to pay more for enhanced experiences.”

But challenges for Singapore telcos remain. Operators will need to carefully construct their 5G product and pricing portfolios, the authors caution, arguing that a price war to attract subscribers would be ‘fatal’ on the grounds that consumers are willing to pay for better quality. “It is critical they avoid it,” stated Dobberstein, who also cited the need for local operators to work together with enterprises on pain-points and solutions.

“To live up to the full potential, the region will need to address the main challenges. This will require a coordinated effort from all stakeholders – regulators, operators, and enterprises,” concludes Dobberstein. “Among the key issues that regulators would need to take the lead on are; ensuring near-term spectrum availability, fostering infrastructure sharing and nurturing the development of national cybersecurity capabilities across the region.”