Recently, we took the opportunity to highlight some of the key trends that we will be tracking through the coming year. However, as soon as the button was clicked to “publish”, remorse set in with the realization that the list of trends presented was not exhaustive. So, this follow-up post will be an attempt to flesh out the themes we will be tracking in 2023.
Private 5G will take root in Asia as spectrum becomes available
We have opined, written and published a lot on private wireless networks (PWNs), or mobile private networks (MPN), depending on one’s definitions. Some of our previous publications on this topic can be accessed here. Private networks have seen a surge of interest and deployment activity around the world in 2021 and through the start of 2022. As enterprises, large and small, around the world “go digital” and transform their networks and businesses, they are increasingly looking at deploying private wireless networks (PWNs). As spectrum becomes available around the Asia-Pacific region for PWN deployments, we are seeing momentum building.
China is the clear market leader in PWNs, with claims of over 5000 private 5G networks deployed coming in for a lot of debate. China has adopted a telco-led model for PWNs, which means that enterprises can’t acquire spectrum on their own. In keeping with their propensity to push mobility services in a big bang way, China's CSPs have invested heavily and aggressively in building out their 5G networks, and the massive scale and coverage of these networks has ensured PWN deployments in manufacturing, shipping, logistics, transportation and other sectors.
Japan has released 5G spectrum for telcos as well as made spectrum available for individual enterprises to acquire. In Japan, spectrum has been identified and allocated in the 4.8 GHz band for private 5G, as well as in mmWave bands from 28.2 GHz-29.1 GHz. Several large Japanese enterprises, including Toyota, Omron, have already applied for dedicated spectrum and deployed private 5G networks.
Australia began with an approach largely focused on a telco-led model and is seeing early trials and POCs for private networks in early adopter sectors like mining and transportation. More recently though, the Australian regulator has also enabled “area-wide licenses”, which would allow an enterprise to acquire a local area license for a specific purpose, with built in safeguards to prevent interference with any public mobile networks that are deployed in and overlap in that area.
India is the latest Asian country to enable private network deployments. The Indian regulator, TRAI, had recommended enterprises be allowed to acquire licensed spectrum through telcos or apply directly for dedicated spectrum. In the June 2022 5G auction announcement, the Government officially allowed both options. Mandala Insights projects that by 2027, India will have a total of 2,028 sites for private wireless networks across the country, including sites with both 4G and 5G base stations. Just over 75% of these sites will be on 5G in 2027, with the tipping point from 4G to 5G will be in 2025. The total sites in 2027 will correspond to 372 base stations (BTS) for 4G LTE, 1,544 for 5G sub-6 GHz and 546 for mmWave. Of these, only a quarter of sites will be deployed as dedicated, standalone networks run by enterprises. The majority will be deployed as a Service (aaS) by telcos or SIs.
Asian telcos will continue invest in their quest to become “TechCos”
One of the more fascinating segments that we have tracked of late relates to Asian telcos and their existential quest to remake themselves into TechCos. This “movement” has been derided in many quarters as a fool’s errand by stodgy and entitled incumbents. In many parts of the world, and in places like the United States where Big Tech has dominated both the narrative around digital as well as the necessary infrastructure build outs, the scepticism around telcos as TechCos is well founded. However, in Asia, and specifically in emerging Asia, telcos still have a dominant and/or influential status in the ecosystem. Usually, this is a function of the relative development of the telecoms sector relative to finance, payments, energy and other core infrastructure segments. Telcos in these countries also tend to have wide reach in terms of last mile distribution, as their embrace of prepaid models have also helped them widen the addressable market to cover nearly the entire population. Many Asian telcos already have large and growing businesses in payments and overlaps with retail segments.
In the APAC region, a number of telcos are looking to position themselves as technology providers of choice for both the consumer and enterprise segments. While many Asian telcos are investing with a new focus on innovation, ecosystem building and acquiring the correct skill sets needed for becoming truly digital service providers, there is no question that they can’t reach the promised land alone. Ultimately, if telcos want to diversify and go beyond connectivity, they will need to co-create value with ecosystem partners, an area where they have not fared well traditionally. There is still the open question of what the core product offering would be. To many telcos, the low-hanging fruit would be to offer “connectivity as a service.” This makes eminent sense when viewed against the backdrop of a booming market for private 5G networks, cross border IoT use cases and dedicated network connectivity to enable digital transformation for a host of diverse verticals. But beyond connectivity, telcos could offer security as a core offering to enterprises, especially the small and medium enterprises that are so prevalent in emerging Asia; managed private networks for enterprises to enable new use cases; or even edge computing resources and services.
But this will not be easy to do. For one thing, telcos must quickly put in place the correct architecture for managing the explosion of data from an increasing number of connected endpoints. Some of this data will stay on-premise, and some of it will reside in the cloud, both edge cloud and public cloud. We have written previously about the enterprise shift to hybrid, multi-cloud. Orchestration of increasingly complex services simply can’t be achieved without a hybrid data cloud strategy that optimizes resources for the TechCo organization. With the shift to 5G, the boundary between the technology stack and the business operations side is getting increasingly blurred. The TechCos who succeed are the ones who will be able to combine higher performing networks with increased agility in operations while also harnessing the power of data and AI to build, operate and monetize new products and services. Several Asian telcos are already putting these modern data architectures in place, and this is a space that we will be tracking in 2023.
There will be other topics we will track through 2023, including a regular focus on our home market of India, which is seeing something of a renaissance after years of being stuck in the mud. We will also be tracking the enigma that is 5G in the mmWave frequencies and dig into current as well as prospective deployments as we assess the viability and necessity of mmWave.
Our next post will be focused on the upcoming Mobile World Congress, to be held in Barcelona at the end of the month. We will be back after a 3-year hiatus and will outline key themes we will be looking out for at the marquee, annual event.
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