THE world is moving towards 5G, as the latest in digital telecommunications is expected to revolutionise the way machines and humans interact with one another.

If implemented correctly, the 5G network will change our lives, as the technologies it will enable are varied and include autonomous cars, autonomous robotics in manufacturing processes, remote healthcare services, drone deliveries and warehouse management, to name a few.

Yet, even as Malaysia steps into the 5G era, which requires high-band spectrum for telcos to deliver top speed, the country’s mobile players are still in need of more low-band spectrum to address a continuing problem — how to increase network coverage of digital connectivity to semi-urban and rural areas.

High-band spectrum — typically above 6GHz — is used to deliver high-speed, low-latency data connection, while low-band spectrum — below 1GHz — is used to achieve reach and capacity of data connections.

Speaking to The Edge on a virtual platform, Todd Ashton, president of Ericsson Malaysia, Sri Lanka and Bangladesh, says there are various elements that need to come together for Malaysia to successfully roll out its 5G network.

“Let’s take a step back to see the real problem statements for Malaysia. Number one is the digital divide, and that is a well-acknowledged challenge. The second problem statement is a lot of companies, such as in the manufacturing sector, really want more reliable connectivity.

“The third problem statement is how to deliver a good customer experience for mobile service today, and the fourth is how to increase broadband penetration everywhere,” says Ashton.

To address the digital divide in Malaysia, it is a mistake to think that 5G is a solution, he says. The digital divide involves communities that have less of an ability to afford devices with the latest technology.

This therefore makes the business case for mobile operators to be quite long tail if 5G is used to narrow the digital divide in the country, says Ashton.

“So, you wouldn’t solve that problem with 5G. You wouldn’t solve that problem with 4G, where you have devices that are well below US$100 [RM424] price points, whereas for 5G, we are very early on in the lifecycle of the devices,” he says.

So, how does Malaysia solve its digital divide, now that telcos are going to develop 5G, which means a huge chunk of their capital expenditure will be divided between developing the legacy networks of 3G, 4G LTE and also 5G?

According to Ashton, it is very important for Malaysia to ensure that it has enough low-band spectrum, so its telcos can avoid building lots of sites to provide network coverage, especially in semi-urban and rural areas.

This is because developing physical network transmission sites is costly, and the more cost a mobile operator incurs to develop its networks, the more costly it would be for its customers, which would deter digital adoption by those with smaller purchasing power.

Ashton points out that the cost of a site tends to take up the bulk of capital expenditure, and that technology only makes up 30% of the cost. The rest of capex goes to land and building costs and the maintenance of the site.

Therefore, to narrow the digital divide, he suggests Malaysia should think about developing its 4G network, and then eventually and gradually develop its 5G network in more areas from the initial rollout stages.

To do so, the authorities really need to ensure that the low-band spectrum is available for the mobile operators, which will be able to leverage the universal service provider (USP) fund for that as well as where the business case does not exist, says Ashton.

According to the USP Annual Report 2018 published by the Malaysian Communication and Multimedia Commission (MCMC), as at Dec 31, 2018, about RM3.8 billion was available after taking into account commitments to implement digital connectivity initiatives.

Among initiatives taken by MCMC using the USP fund were the development of 1,833 communication towers between 2009 and 2018, and upgrading of base stations at existing towers involving 4,895 sites between 2014 and 2018.

The USP fund was also used to expand the fibre-optic network (1,009km completed), rural broadband (102,692 ports), submarine cable system to Sabah and Sarawak (3,819km) and suburban broadband (457,398 ports completed).

In developing the 5G network and leveraging technology, Malaysia should not neglect its 4G network, as it is the backbone of the digitalisation of the economy.

In the manufacturing sector, for example, companies that need better connectivity to digitalise their operations might want to start with 4G-level technology before moving up to 5G-enabled technologies, says Ashton.

“If we [look at] industry protocol like manufacturing, as you get into more lower-latency applications, you will need 5G. But you might want to start with 4G, because maybe the first problem to solve is just improving the connectivity.

“Then when you start getting into, let’s say, advanced robotics, where you need very low latency, yes, you will use 5G.”

Fibre is important, but not to achieve connection to every household

An oft-repeated mantra is that fibre infrastructure is the best way to deliver data connection. While it is true in an urban setting, it does not really make business sense in semi-urban and rural areas.

This is because developing fibre infrastructure involves high investment, and given the low population density in semi-urban and rural areas, the returns might not justify the cost of investment.

According to Ashton, for semi-urban and rural areas, wireless connection is a better option for connection to digital infrastructure.

“If you are 10km out of Kuala Terengganu, you may not want to solve your home broadband problem with fibre. Instead, you may want to solve it using wireless or fixed wireless,” says Ashton.

Fixed wireless has been used by mobile operators around the world to solve connectivity issues in areas with low population density. The technology uses the 4G LTE network, instead of fibre, as the backhaul infrastructure.

As the prices of devices with 5G connectivity fall, rural households can be connected to both 4G and 5G modes, says Ashton.

This plan is already in the works in Malaysia, with Telekom Malaysia Bhd (TM) leading the implementation through Unifi Air, whose download and upload top speeds could reach 20Mbps, using a router that can get up to 64 devices connected.

Free market competition does not mean better digital connectivity

In early June, the Ministry of Communications and Multimedia had announced the allocation of spectrum for the deployment of 5G connectivity, but retracted it after some parties pointed out that it was not done through open tender.

The retracted announcements saw five telcos allocated with spectrum within the 703MHz and 743MHz band, coupled with spectrum within the 758MHz and 798MHz band. The telcos were Altel Communications Sdn Bhd, Celcom Axiata Bhd, Digi Telecommunications Sdn Bhd, Maxis Broadband Sdn Bhd and TM.

While more competition means more choices for consumers — and the potential for lower prices — Ashton warns that since spectrum and capital are finite resources, allocating the spectrum, especially in the low-band, to too many players will result in slower deployment of connectivity.

“The reality is that capital only follows companies that are seen as being successful, and to build this network does involve a lot of money.

“So, you wouldn’t want to end up in a situation where you are spreading your spectrum resource, which is scarce, very thinly across too many players with the hope that somehow capital is going to follow all those players.

“So, to get good customer experience, the mobile operators that want to invest need to have more spectrum than they have today. The experience you get is directly proportional to the spectrum they have and the amount of capital that they invest in,” he says.