3 in 4 Singaporeans won't pay higher bills for 5G

A 5G network isn’t considered palatable due to the high number of players in the market.

Even as Singapore prepares to roll out 5G, over half of Singaporeans (75%) stated that they are not willing to pay higher monthly bills for 5G against 4G, despite an “already-significant” de-rating due to 4G price competition, according to an analyst report by Maybank Kim-Eng.

Also read: IMDA calls proposals for rolling out 5G

Apart from consumers, investors also do not see 5G network “palatable” because of multiplayer risks. Higher competition risks are expected to dampen the business case scenarios being run by interested parties. The report also noted that it could also potentially raise investors’ risk perception on upcoming and undisclosed 5G capex by Singtel and StarHub.

“Higher investment risks will be factored in by would-be mobile network operators MNO bidders. It may also dampen interest in the localised licenses. That may lead to just 2-3, not four, players participating in such areas. However, given that the fourth MNO license taken up in 2016 when there was over 150% SIM penetration surprised the market, we cannot rule out multiplayer risk,” said Luis Hilado, analyst at Maybank Kim-Eng.

The government’s plan of nationwide coverage of 50% by end-2022 could only be ideal if the two nationwide licensees can cooperate on coverage to avoid duplication and enable local 5G roaming to bring the nation closer to 100% coverage, which will be faster than two competitors targeting the same areas.

“In our view, the consumer’s increasing treatment of wireless data as a basic service - similar to water, transport and power - begs the question of whether a regulated-returns framework should be the long-term path. This is already the thinking behind the structure for residential fibre broadband that created Netlink Trust,” Hilado continued.

He also stated that minimising costs and speeding up national rollout through cooperation are the likely solutions to attract consumers and the financial markets.

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