October 09, 2019
AFFORDABLE Fifth Generation (5G)-enabled devices must be in place before telecommunications firms in developing economies, like the Philippines, could capture the masses with prepaid 5G service, Fitch Ratings said.
In a report released on Tuesday, the debt watcher said industry giant Globe Telecom Inc. was initially tapping the household market, allowing it to bolster its position in the fixed-broadband space.
“The Philippines’ second-largest telco, Globe Telecom Inc. (BBB-/Stable), is adopting FWA (fixed wireless access) to cover the country’s archipelago, as well as to address its fixed-line network limitation and the lengthy regulatory approval process for cell site permits,” it said.
Currently, the coverage of Globe’s 5G network has been limited to Metro Manila and nearby provinces.
Just like the Ayala-led telco, its main rival PLDT Inc. is also gearing up to launch its own 5G services to home and enterprise subscribers by early next year, which is a delay from the supposed fourth quarter of 2019.
While Globe has been leading the 5G battle in the country, existing telcos may need to wait for available compatible handsets and the issuance of 5G standard frequency from the International Telecommunication Union for their wireless individual segments.
“Prices of 5G customer-premises equipment would need to fall considerably for mass-market adoption to take place in emerging markets, where the Philippine[s] market is predominantly prepaid,” Fitch Ratings said.
Smartphone manufacturers, including Samsung, Huawei, Xiaomi and Oppo, earlier this year introduced their 5G handsets that cost more than $1,000 and are only available in select regions.
“The country has yet to formally allocate 5G airwaves,” Fitch Ratings added.
In preparation for the 5G network, the Department of Information and Communications Technology (DICT) Undersecretary for Operations Eliseo Rio Jr. previously said the Philippines must have more network infrastructures.
The government’s push for common tower policy, he stressed, could help ramp up the deployment of shared cell sites.
Both telcos, including new player Dito Telecommunity, have showed support to the initiative by securing business deals with common tower providers.
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