At this juncture, Kenanga believes that industries and enterprises are the early beneficiaries and adopters of 5G. However, there is a lack of awareness of 5G’s capabilities amongst the business community in Malaysia.
Therefore, monetisation of 5G will take time and eventually take place when awareness, consumer offerings, and coverage are ramped up. The house maintains forecasts for CelcomDigi.
After a mega showcase by CelcomDigi for its MY5G Conference & Showcase, Kenanga said it felt largely neutral on 5G mobile technology in Malaysia at this juncture.
This conference reinforced the role of telco companies as an enabler of advanced technologies via 5G infrastructure. The latest equipment, devices and solutions require high-speed 5G networks to transmit large amounts of data at ultra-low latency. Modern devices and machinery that utilize advanced artificial intelligence (AI), internet of things (IoT), etc. are unable to function effectively on legacy 4G networks.
There are copious and diverse applications of 5G technology for industries and enterprises. These include (i) automation via drones and robots, (ii) remote surveillance, broadcasting or telemedicine via high-definition cameras that transmit visuals in real time, and (iii) supply chain and logistics fleet management via the analysis of vast amounts of data on cloud AI. Such applications result in the transformation of business processes that enable organizations to scale up, enhance efficiency, and achieve breakthrough innovations.
A recent use case is the implementation of an AI autonomous inventory system at DHL’s Integrated Logistics Centre in Shah Alam. This system comprises a combination of robots and drones equipped with high-resolution cameras that are connected to CDB’s 5G network. Following its installation, efficiency is boosted by 20-fold and precision is enhanced following the elimination of human errors.
Whereas for consumers, applications that require 5G services at this juncture include: (i) interactions within the metaverse, (ii) high-speed streaming services for gaming, (iii) virtual reality experiences, (iv) autonomous driving for passenger vehicles etc. Nevertheless, the house believes that consumer applications will progressively expand as hardware, software and content developers harness 5G’s capabilities.
Based on remarks by Huawei Technologies’ advisor to the president and former chief technology officer, Kees Lemmens, we understand that the greatest challenge for 5G currently is the lack of awareness of its potential and benefits. Additionally, some members of the business community are averse to transformation and prefer systems
and processes to remain the status quo. This could be demonstrated by their reluctance to commit to hefty technology investments and hence may present hurdles to the adoption of 5G services. On top of that, Kenanga also understands that there is some resistance from telco carriers to realign their marketing strategies to focus on enterprises instead
of the traditional consumer when selling 5G services.
According to SK Telecom’s (SKT) head of strategy, Will Cho, 64% of its customers (15.7m) are 5G users. Nevertheless, he believes that 5G adoption is still at its infancy in Korea despite SKT having first commercialized 5G back in Jan 2019. This corresponds with Lemmens’ view that 5G is here to stay until 2030 at the least.
However, Kenanga commends CDB’s efforts to promote knowledge of 5G applications to businesses via this conference and other initiatives. Given the current backdrop, the house believes that industries and commercial enterprises are the early beneficiaries of 5G at this juncture. Hence, they will likely be the early adopters of 5G ahead of the traditional individual consumer. Nevertheless, monetization of 5G will take time, as reflected by its subdued take-up rate. Evidently, only 15% of CDB subscribers have signed up for 5G, and out of this, merely 11% are active users.
