5G iS the biggest thing happening to telecommunications players as they ready themselves for its rollout. It is an important infrastructure in the push towards embracing Industry 4.0 to remain competitive.
At potential speeds of up to 10 gigabits per second, 5G will be the fastest network – it is 10 times faster than 4G – and will be far more advanced in terms of robustness, latency, peak speed and reliability.
However, there are challenges. Gaining the required spectrum from the government is crucial and failure to do so could be a show-stopper. Even with the spectrum, capital expenditure (capex) will be high, raising the concerns on return on investment. How does then Malaysia’s leading telco plan to embrace 5G and manage its challenges?
Excerpts of StarBizWeek’s interview with Maxis CEO Gokhan Ogut:
Were you disappointed that the 5G spectrum was awarded to Maxis, then retracted?It was not even long enough for me to be disappointed over it, but here’s where we are right now with 5G. Over the last few years, Maxis has been assessing the 5G technology and conducting demo trials in our test lab.
Maxis has been upgrading its transport network to support the gigabit speeds and at the same time virtualising its core network elements for flexibility and scalability for the capacity demands of this technology.
In February 2019, Maxis and Huawei signed a memorandum of understanding (MoU) to cooperate on full-fledged 5G trials. Following this, we commenced the first 5G live trials in the country.
We also participated in MCMC’s #5GMalaysia showcase in Putrajaya, demonstrating how 5G can enable the government and corporations to make informed decisions using the technology.
Then in October 2019, Maxis and Huawei signed a landmark agreement for the provisioning of 5G network, an important milestone in our 5G journey. Maxis unveiled its first use case demo at aquariaKLCC last November, showcasing Malaysia’s first 5G augmented reality (AR) experience with marine life. In January 2020, as part of the 5G Demonstration Projects, Maxis featured its 5G use case in both education and agriculture.
We have done everything that needs to be done and we have been ready to roll out 5G since the end of last year. The only thing left is spectrum. As soon as we get that, we’re ready to launch (5G).
How much spectrum do you need for 5G? (Note: MCMC has identified the 700MHz, 3.5GHz and 26/28GHz as the pioneer spectrum bands for the rollout of 5G in Malaysia)For 5G, the better spectrum is the 3.5GHz, as that is best due to its availability or high frequency.
For specific applications, we do need the 26/28GHz spectrum. That is usually for smart apps because of its nano wavelength, it’s impacted by the outside a lot, so you need to use it directly, almost like a laser beam. Some niche applications would require that, such as industrial.
Apart from that, the 700Mhz is important for two things — 4G and rural coverage (or the lack of it in the country).
The diameter of the 700Mhz makes it the furthest reaching frequency, which is what we need for 4G in rural areas. The 10MHz spectrum would be enough for each operator.
How much is Maxis willing to pay for the spectrum?Over the last few years, we have paid a total upfront payment of RM935.15mil and total annual fees of RM120.25mil for the 900MHz, 1,800MHz and 2,100MHz.
Will Maxis shift its entire network to 5G or will this happen in stages?In stages, because it will take our customers time to own 5G phones. In the case of 4G, we started rolling it out in 2013.
Fast-forward seven years later today and we are at a 4G coverage of 93%. There is no sure way of telling how long it will take us to have a high 5G coverage.
How much is Maxis investing in capex? If MCMC awards Maxis the 5G spectrum in say, a month’s time, how much more will the group need to spend?Last year, we invested RM1.23bil. This year, in the first six months, we have invested 7% more at RM411mil, as compared to last year.
As for the rollout of 5G, I can’t give you a number, but we are trying to minimise spending through our partnerships.
What collaborations is Maxis currently participating in? How is the group working with the other telco players in these collaborations?We have two MoUs signed. The first MoU signed last November was to explore infrastructure sharing with Celcom Axiata Bhd, which I spoke about earlier.
We already have a good network of 10,000 base stations in the country, but we need to add on to this. Each of these base stations will require new radio access network (RAN) equipment for 5G.
Meanwhile, the second MoU was entered into in February this year, where Maxis, Celcom and Digi.com Bhd will leverage on each other’s resources to build a wider and more efficient fibre network. This has nothing to do with 5G.
The three operators will deploy fibre backhaul and roll out fibre to base stations in the country, which will improve 4G connectivity nationwide – in line with the government’s National Fiberisation and Connectivity Plan (NFCP) ambitions.
Both MoUs are work in progress. We have yet to finalise agreements and announce if there are opportunities to work together. Should these collaborations progress successfully, the cost savings derived from these efforts will be equally distributed among the players.
Will Maxis be able to roll out 5G if the fibre rollout is not complete?Yes, the fibre rollout is a separate matter. Fibre is not a prerequisite, not a must for 5G.
In future, as the consumption of 5G at high gigabytes grows in line with the number of users, there will be large traffic.
This will then require fibre for transmission, on top of the existing microwave transmission.
Microwave technology has also improved. From the current 1G, very soon microwave transmissions can carry 5G, 10G or even 20G.
In three to five years, operators can rely greater on microwave capacity to carry higher bandwidth instead of fibre.
Is the idea of having one network for 5G for the entire country workable?No, think about having just one network, what if something happens to it? There is a need to have redundancy, at least two players.
It is even better if you have more competition. You need competition to get the best results. For example, competition in infrastructure building, which is what we have seen in the rollout of 4G.
The country is in a good state (in terms of 4G) because of competition. What people do not realise is that competition forces people to collaborate.
We are competing against each other, but competition will also lead to collaboration, naturally. That’s our philosophy.