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Moody's: adoption of 5G slow across Asia Pacific 

Jun 27. 2019
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By The Nation

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Moody's Investors Service says in a new report that a lack of demand and a clear business case for deployment are likely to slow the adoption and roll-out of fifth-generation (5G) mobile technology across Asia Pacific.

"Prospects for 5G investment are currently mainly related to increasing speeds and capacity for existing 4G networks, while more advanced applications – such as medical services, robotics and smart home devices – are still developing and require higher band spectrums to run efficiently," said Nidhi Dhruv of Moody's. 

"Moreover, all rated companies which responded to our survey on 5G believe that implementation will require a reconfiguration of networks and a change in business models, further signaling that it will take time to unlock the full potential of 5G applications," added Dhruv.

Korea, China, Japan and Australia pave the way for 5G services in Asia Pacific, with operators in these pioneer countries seeking to transition their subscribers at premium average revenue per user (ARPU). Operators in these countries have also benefited from strong government backing, inter alia in the form of spectrum-fee waivers, planned infrastructure and technology funding.

Meanwhile, early adopters in Singapore, Malaysia, Hong Kong and the Philippines are targeting commercial launch by the second half of 2020 and into 2021, with 5G and 4G likely to coexist for a long time and become indiscernible as the networks mature.

Finally, Moody's expects the launch of 5G mobile technology will be credit neutral for Asia Pacific mobile carriers over the next three years. 

Companies will limit the initial roll-out to densification of networks with small cells in high traffic urban areas, while financial flexibility, existing spectrum use and fiber assets will influence the pace of each carrier's implementation.

Moody's report covers 20 telecommunications services companies across 11 countries in Asia Pacific, and classifies these countries into pioneers, early adopters and late adopters.

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