The nation’s telecoms are not aligning with the government’s eagerness to put Taiwan on the world’s 5G map as they balk at splurging on the expensive wireless technology that has no guarantees for quick returns.
The nation’s five wireless carriers have clearly said that they would not scramble to roll out 5G services, as they face big challenges ahead, including the absence of a profitable business model to sell the revolutionary technology, in spite of all the use cases that have been suggested.
A 5G use case and adoption survey released last week by Gartner Inc found that Internet of Things applications remain the most popular target use case for 5G, followed by video.
About two-thirds of organizations intend to deploy 5G by 2020, it said.
“We know enterprise clients will be early adopters of 5G technology. We also know the benefits of the technology, but people rarely talk about what will be the potential business models,” Chunghwa Telecom Co (中華電信) president Sheih Chi-mau (謝繼茂) said at a Taiwan Communications Society forum on Dec. 14.
“How to make profits from 5G technology is a real challenge for us,” Sheih said. “Whether 5G can create a blue ocean [for telecoms] remains a question mark.”
Local telecoms each burned up to NT$60 billion (US$1.95 billion) to obtain 4G spectrum and build 4G networks. Four years after the launches in 2014, carriers are still struggling to recover those investments.
Stiff price competition has been blamed for telecoms’ plight.
Over the past two years, 4G average revenue per user has dipped 32 percent to NT$555 in the second quarter of this year, government statistics showed.
Taiwan Star Telecom Corp (台灣之星) president Cliff Lai (賴弦五) made a bold forecast, saying that “5G technology will not be a profitable business by 2025.”
“We cannot even find a business case that would allow us to recover 5G investments in the short term,” Lai said at the forum.
Deploying a 5G network remains two to three times more expensive than the rollout of 4G, as telecoms would have to install many more base stations to ensure Internet connectivity to a massive amount of end devices that is 10 to 100 times faster and has a lower latency than 4G, Taiwan Star Telecom said.
Taiwan Mobile Co (台灣大哥大) is also conservative about jumping into capital-intensive 5G technology.
Company president James Jeng (鄭俊卿) said that the firm would not invest heavily in 5G within three years after the release of the 5G spectrum.
“Within the next three years we do not see any scalable business opportunities that are strong enough to support telecoms’ heavy investments on extensive 5G coverage like we did for 2G, 3G and 4G,” Jeng said.
The National Communications Commission has pushed back the issuance of 5G licenses from next year to 2020 due to technological hurdles and expensive telecommunications equipment in the initial phase.
Local telecoms are likely to commercially launch 5G services in the second half of 2020 or in the first half of 2021, about six months after the release of spectrum, Far EasTone Telecommunications Co (遠傳電信) president Yvonne Li (李彬) said.
In other words, Taiwanese telecoms would lag their global peers such as US telecom giants AT&T Inc and Verizon Communications Inc by about two years in offering 5G services. In the US, major wireless service providers have already begun providing 5G services.
Other markets where significant 5G subscriber volume is expected include South Korea, Japan and China, Telefonaktiebolaget L.M. Ericsson said in an annual mobility report released last month.
Flawed government policy has stalled local telecoms’ investment in 5G and they also learned a harsh lesson during the migration to 4G.
WiMAX service providers, the strongest supporters of a government drive to build a local WiMAX ecosystem, were all forced out of the market in 2015 after admitting defeat in a battle for 4G supremacy with LTE technology.
On the cusp of entering the 5G era, the government aims to build a new 5G supply chain in Taiwan by teaming up with global 5G pioneers like Qualcomm Inc, with the ultimate goal of transforming the nation into a “digital economy.”
The Ministry of Economic Affairs has created a 5G Technology Program Office tasked with spurring collaboration to lead local chipmakers, base station suppliers and networking equipment manufacturers into the global 5G market.
The domestic market could serve as a testing ground for the local 5G supply chain if telecoms spearhead the rollout of 5G services, the ministry said.
However, telecoms have not shown interest in the proposition.
“The ministry has built a bad reputation,” Lai said, citing the WiMAX fiasco. “Taiwan should seek to be a smart follower, rather than a 5G leader.”
Silicon photonics would play a dominant role next year and make chip-level co-packaged optics (CPO) packaging possible, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) said yesterday. “For years, critics questioned the reliability of CPO. The doubts are being thoroughly dismantled by real-world data and market validation,” TSMC vice president of advanced packaging technology development K.C. Hsu (徐國晉) said at a SEMI forum in Taipei. The company is on track to enter production of CPO later this year, Hsu said in another forum arranged by Imec in Taipei yesterday, about four months after TSMC announced its progress in CPO development in May.
In China’s hilly Guizhou Province, a cluster of European-style buildings complete with clock tower and multi-arched bridge emits a low, permanent hum — a clue to its unexpected identity as tech giant Huawei’s largest data center. The town-like complex is unique in design, but not in its placement. Dozens of data centers have been constructed in the southwestern province in the past few years. They are part of a government strategy that has seen much of the digital infrastructure for breakneck artificial intelligence (AI) development across China’s eastern seaboard established in the country’s less populated, rural west. The build-out is ongoing. China
EXPANDING: Firms are accelerating commercialization of the technologies as the industry moves beyond chip-level speeds to upgrading rack-to-rack links, SEMI said Silicon photonics and copackaged optics (CPO), technologies seen as critical to meeting the surging bandwidth demands of artificial intelligence (AI) infrastructure, would be among the main themes at the Semicon Taiwan trade show, which opens on Wednesday, event organizer SEMI said yesterday. The forum runs until Friday at the Taipei Nangang Exhibition Center, with technical forums beginning today. The event is expected to set a record in terms of the number of participants, SEMI said, projecting more than 1,300 exhibitors from 65 countries across 4,300 booths and more than 100,000 attendees. Optical interconnects underpinning AI infrastructure would be one of the highlights, with
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has increased its second-quarter employee bonuses by more than 50 percent from a year earlier, as the world’s largest contract chipmaker posted record earnings in the three-month period. TSMC distributed its second-quarter bonuses to employees on Friday. Employee bonuses for the April-to-June period totaled NT$36 billion (US$1.14 billion), the chipmaker’s financial data showed. During the period, TSMC posted NT$706.56 billion in net profit, up 77.4 percent from a year earlier and 23.4 percent from a quarter earlier. Second-quarter earnings per share (EPS) rose to NT$27.25, compared with NT$15.36 a year earlier and NT$22.08 in the first
RSS