Telco Deep Dive 2017: Malaysian spectrum refarming: Where are we after a year?: Page 3 of 3

What the future looks like?

While much of the efforts to date have been focused on spectrum refarming, operators in Malaysia are keeping one eye on the future too. After all, the main objective of refarming is to prepare for the future, noted Ovum practice leader Nicole McCormick.

Arguing that on a LTE/ 4G network, operators can increase data revenues and data average revenue per user (ARPU) and lower per-bit-cost, she said, “One of the main reasons for moving customers off 2G is to enable better data monetisation prospects. On a 4G network, operators can increase data revenues while lowering per-bit costs.

Counterpoint Research’s Shah said comparatively speaking 2G and 3G networks were optimised for voice-centric or lighter data-centric applications, which often generate low ARPU and are being cannibalised by over-the-top (OTT) apps and services which are mostly IP (Internet protocol) driven, and also are spectrally less efficient.

“There is a case to move 2G/ 3G subs to 4G networks to maximise ARPU and in the process boosting their bottom lines with more efficient network,” he argued. “It’s all about lowering the cost per bit, driving more revenue opportunities and maximising the user experience.”

Analysys’ Wilson agreed, adding the better spectral efficiency offered by LTE and LTE Advanced (LTE-A) versus 3G and 2G could allow operators to increase the size of their data bundles.

There is even a chance for operators, including those in Malaysia, to move to once again offer complete unlimited data packages, Wilson speculated.

“It is worth noting that traffic per head of population in Malaysia is higher than in some Western European markets such as Germany,” he said. “A central challenge for operators globally is how to better monetise data traffic growth.”

But what about vendors touting the much-vaunted 5G technology, as Celcom recently did with the demonstration of the technology at its headquarters?

Ovum’s Inderpreet cautioned against getting too excited about the case for 5G as there are a lot of issues to consider before getting there.

“5G would require new spectrum, she argued, “The frequencies around 3.5GHz and in the lower C-band spectrum up to 4.2GHz are gaining attention as they promise higher bandwidth and capacity than the sub-3GHz bands. So too are some trials focused on 28GHz band for extreme high capacity networks.”

Analysys’ Wilson concurs, noting there remains a good deal of uncertainty around investing heavily in a new technology such as 5G in a challenging business environment for global operators.

“Spectrum is one area of uncertainty around 5G. One option would be to use millimeter wave, such as 28GHz, spectrum but the cell range for such high frequencies is low and significant investments will need to be made in fibre backhaul also.

“A further area of uncertainty is with regard to the value of 5G Internet of Things (IoT), he said. “IoT forms an important part of the 5G vision but it is unclear at this point which IoT applications will actually require 5G as opposed to existing IoT technologies.”

However, such spectrum and 5G in general might offer possibilities for operators in Malaysia to monetise fixed wireless broadband connections, Wilson argued, as further spectrum releases will be required to meet the growing demand in traffic.

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