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The Impact of 5G Network on edotco
This document discusses the impact of 5G networks on edotco, a leading wireless infrastructure provider in Asia. It notes that 5G will require significantly more network densification through additional sites to handle the higher speeds, lower latency and increased IoT connections compared to 4G. This densification will be a major challenge for mobile operators given issues like declining profits, the need for new investments before previous cycles are monetized, and lower returns from capacity sites. The document argues that the telecom infrastructure industry, including tower companies like edotco, will need to shift from a tower-focused to an infrastructure-focused model and leverage techniques like urban densification solutions, predictive analytics, fiberization, and digitalized operations to help
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The Impact of 5G Network on edotco
- 1. DOCUMENT TITLEThe Impactof 5G Network on edotco Gayan Koralage Director Group Strategy edotco Group Sdn Bhd 1
- 2. 2 WE ARE THELEADING WIRELESS NETWORK INFRASTRUCTURE PROVIDER IN ASIA 2 1 5 4 3 6 ~29,000 Towers owned / operated and managed Largest Multicounty TowerCo in Asia 13th Largest Tower Company in the World Revenue : MYR 1.5Bn 1. Malaysia 2. Bangladesh 3. Cambodia 4. Myanmar 5. Pakistan 6. Sri Lanka 4,600 / 7,000 towers 8,900 / 1,200 towers 2,600 / 1,000 towers 2,000 / 1,000 towers 1,300 towers 100 towers • Build-to-suit • Co-location • Passive O&M • Active O&M • Energy • Fiber Resell • Build-to-suit • Co-location • Passive O&M • Active O&M • Energy • Build-to-suit • Co-location • Passive O&M • Build-to-suit • Co-location • Passive O&M • Energy • Build-to-suit • Co-location • Passive O&M • Energy • Street Solutions • Passive O&M • Energy • Fiber Resell a) Global ranking source by TowerXchange / b) Towers owned by edotco / c) Towers managed by edotco
- 3. 3 5G – NEWERA ON THE HORIZON… 5G4G Consumer Applications Mainly Human 5 – 10 GB p.m. Human + Machine 20 - 30 GB p.m. Speed Latency 100mbps – 250mbps 10Gbps >40ms ~1ms Video surveillance 4k Video streaming Fleet Mgmt. & Telematics Traffic Control Lighting Water 360° video (hi- res) Haptic VR Cloud-assisted driving Remote training Industrial automation Subscribers Today : 7.8Bn 2027 : 9.3Bn Today : 7.5Bn 2027 : 35.0BnIoT Connections Today : 13EB p.m. 2027 : 300EB p.m.Global Data Per Site Power ~2kW ~4 -6kW Power Uptime 99.99% 99.999%
- 4. Spectrum Allocation 5GTrials Commercial Rollout Highlights April 2019 § 2 MNO’s launched 5G By 2020 § Target to represent ~40% of 5G connections Globally by 2025 By 2020 § Trials on going By 2020 § Plans to allocate the 3.5GHz, 26GHz and 28GHz airwave bands July 2019 § Globe Telecom launched 5G services By 2021 § Spectrum allocation timeline to be released by Oct 2019 4 5G Deployments in Asia S. Korea China Japan Singapore Philippines Malaysia 3.5 GHz 28 GHz 3.5 GHz 2.6 GHz 4.8 GHz 3.7 GHz 2.5 GHz 28 GHz 700 MHz
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- 6. 6 FACTORS WHICH COULDDELAY THE 5G COMMERCIAL LAUNCH… Operator Profitability is Challenged1 New Investment Cycle Before Monetizing the Previous Cycle2 More Sites Required for Densification3 Capacity Sites will Have Low Incremental Return4 New Entrants May Compete With MNOs5
- 7. 7 OPERATOR PROFITABILITY ISCHALLENGED Mobile Industry Returns : Developing Countries Source : GSMA Intelligence / Internal Data § Mobile ARPU dropped at a rate of 4% in Asia over the last 10 years and will continue to drop globally § Industry revenue growth expected to be in the range of 1 – 2% for next 5 years globally § MNO EBITDA Margins are Decreasing in Developing Countries § Grater data volume is required to reach data profitability 1 40% 37% 38% 37% 36% 2013 2014 2015 2016 2017 (10.0) - 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 - 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 0 2 4 6 8 10 Volume(PBp.m)/Profitability RPMB/CPMB(USD) Time RpMB CpMB Volume (GB Mn) Profitability Breakeven Point Figures are illustrative Actions to advance breakeven point Current level Reduce cost per MB Increase revenue per MB Increase Volume Data Profitability >20% <5% ROIC ROIC
- 8. 8 NEW INVESTMENT CYCLEBEFORE MONETIZING THE PREVIOUS CYCLE 1990 2000 2010 2020 2030 9 years 10 years ~7-9 years 2G – GSM 3G – W-CDMA 4G/LTE (18 years) 5G 4G/LTE Today Time to launch a new technology is reducing 2 Investment recovered Investment recovery ?? Yet to recover the investment Yet to find the killer use case
- 9. 9 WE EXPECT INDUSTRYTOWER COUNT TO DOUBLE WITH THE 5G DENSIFICATION Traffic today* 1.5 Gbps Dense urban downlink Gbps/km2 5G with mm spectrum* >1,000 Gbps Sites/km2 >20015 - 20 1,800 MHz > 28 – 40 GHz Spectrum Band 280 - 300m <60m Inter Cell Distance *In dense urban areas 3 edotco markets Per Sub Data Consumption (GB p.m.) 2018 2022 (F) 2027 (F) 0.2 -9.0 3.0 -26.0 20.0 -79.0 Growth ‘18 – ‘27 >10x Industry Tower Count ~120k ~173k ~223k ~2x Power Requirement (mW) ~250 ~780 >3x
- 10. 10 CAPACITY SITES WILLHAVE LOW INCREMENTAL RETURN4 Average Revenue Per User Average Number of Subscribers per Site 2018 à 2022 ~-5% 2018 à 2022 ~-20% Per Subscriber Consumption 2018 à 2022 5x – 7x Illustration : Bangladesh Lease Fee for a 42m Standard Site ~ USD 1.0k p.m. CAPEX recovery of BTS ~ USD 0.5k p.m. Transmission Cost ~ USD 0.5k p.m. Total Cost of Operation : ~ USD 2.0k p.m. Require 3,600 + subscribers at current data ARPU Low Incremental Return Avg. Data Subs per Tower (2017) MY BD KH MM PK SL 1,454 1,455 1,195 2,187 2,171 2,215
- 11. 11 NEW ENTRANTS MAYCOMPETE WITH MNOS Traditional BB Service Providers ISP MNO Super Macro Layer Low Orbit Satellites Drones / Balloons Community Based Networks Independent Networks 5
- 12. 12 TELECOM INFRASTRUCTURE INDUSTRYNEEDS TO STEP UP TO TAKE THE ULTRA DENSIFICATION CHALLENGE Technical Solutions Operating Model A. Dense Urban Solutions : § Street furniture § Low altitude structures § BTS Hotels § Small cells § IBS B. Shift from TowerCo to Infraco C. Synergistic industry collaborations D. Smart City solutions E. Predictive analytics F. Provide Fiber Transmission G. Digitalized operations Urban Ultra Densification
- 13. 13 STREET FURNITURE –THE NEXT BREED OF TELCO INFRASTRUCTURE Coverage Layer Densification Layer Ultra-Densification Layer Inbuilding Layer A
- 14. § Huawei LampSite3.0 in multi-operator configuration § Capable of GSM, UMTS, LTE and ready to accept upgrades to 5G § 4 units in 2 pairs to enable 4x4 MIMO 14 1ST EVER MULTI OPERATOR SMALL CELL SOLUTION IN THE REGION POC at the KL Sentral Concourse: 4x4 MIMO, Multi Operator, Multi Band, Multi Technology (2G, 3G, 4G & 5G Ready) Small Cell Solution A SINR Coverage predictions for level 1 – LTE1800 simulations
- 15. 15 5G READY SMALLCELL POC BY EDOTCOA
- 16. 16 TOWER INDUSTRY NEEDSA PARADIGM SHIFT Tower + Power Location + Power + Transmission B
- 17. 17 COLLABORATIVE APPROACH NEEDSTO BE ADOPTED TO BE SUCCESSFUL IN 5G ERA InfraCo MNO Demand Side Local Authorities Fiber Service Providers Supply Side Technology Providers § Upstream and Downstream Partnerships § Proactive Site Identification and Site Acquisition § Prepare Urban/ SmartCity Site Catalogue § New Commercial Models SmartCity/ Residential Developers Technology Providers C FWA
- 18. 18 MULTIPURPOSE LAMP POLESFOR SMART CITIES, BENEFIT OPERATORS, CITY COUNCILS AND COMMUNITY Environmental Monitoring Systems Surveillance Systems Vehicle Charging Stations Telecommunication Equipment 4 2 3 Smart Street Lighting 1 5 6 Public Address Systems 7Advertising Smart City D Mutually Beneficial Collaborations between InfraCo, Local Authorities, Smart City Developers
- 19. 19 USE OF GEOSPATIALANALYTICS TO CREATE BUSINESS INSIGHTS AND BIG DATA TOOLS TO PREDICT NEW SITE LOCATIONS Pop: 20,000 District GDP p.c: 50,000 Pop: 20,000 District GDP p.c: 50,000 Pop: 20,000 District GDP p.c: 50,000 x x x x x x xx x Pop: 20,000 District GDP p.c: 50,000 x Market Share - Devices Pop Density and POI Analytics Coverage Benchmarking Network Performance Benchmarking Site locations Avg Utilization Rating Traffic Voice Traffic SMS Traffic Data Traffic Below 2G + Unknown Internal Network and Marketing Performance Data Rev Total Rev Voice Total Rev SMS Total Subs 3G % Subs 4G % E
- 20. 20 IT IS IMPORTANTTO INCREASE NUMBER OF FIBERIZED SITES IN OUR MARKETS Data as of 2017 / Analysys Mason, edotco Internal Estimations TowerCos need to explore collaborative approach to fill the fiberization gap… F Developed Markets China South Africa SEA Countries India MY BD KH MM SL PK 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 20% 30% 40% 50% 60% 70% 80% 90% FiberizedSites% MBB Penetration % edotco Markets
- 21. Digitally Enabled O&M 21 AUTOMATIONOF FIELDS SERVICES IS ESSENTIAL TO ACHIEVE HIGHER UPTIME AND EFFICIENCY Realtime Site Monitoring Automated Workforce / Fleet Management Automated Trouble Ticket Generation Dynamic Optimum Route / Resource Allocation AI Assisted Site Downtime Predictions AR Supported Operations Drone Supported Operations G
- 22. 22 § TowerCos requireto expand the service scope to “Location, Power and Transmission” and evolve to “InfraCo” model § New solutions / structure designs are required to cater urban densification demands § Automation and Digitalization is necessary to drive efficiencies, improve uptime as well as identify new site locations proactively § InfraCos should play a role in fiberization of sites § Benefit based collaboration approach is necessary to deliver 5G aspirations
- 23. edotco Group Sdn.Bhd. Level 30, Axiata Tower Jalan Stesen Sentral 5, Kuala Lumpur Sentral 50470 Kuala Lumpur, Malaysia www.edotcogroup.com +603 2262 1388 Thank You…