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.”
In Italy’s storied gold-making hubs, jewelers are reworking their designs to trim gold content as they race to blunt the effect of record prices and appeal to shoppers watching their budgets. Gold prices hit a record high on Thursday, surging near US$5,600 an ounce, more than double a year ago as geopolitical concerns and jitters over trade pushed investors toward the safe-haven asset. The rally is putting undue pressure on small artisans as they face mounting demands from customers, including international brands, to produce cheaper items, from signature pieces to wedding rings, according to interviews with four independent jewelers in Italy’s main
Japanese Prime Minister Sanae Takaichi has talked up the benefits of a weaker yen in a campaign speech, adopting a tone at odds with her finance ministry, which has refused to rule out any options to counter excessive foreign exchange volatility. Takaichi later softened her stance, saying she did not have a preference for the yen’s direction. “People say the weak yen is bad right now, but for export industries, it’s a major opportunity,” Takaichi said on Saturday at a rally for Liberal Democratic Party candidate Daishiro Yamagiwa in Kanagawa Prefecture ahead of a snap election on Sunday. “Whether it’s selling food or
CONCERNS: Tech companies investing in AI businesses that purchase their products have raised questions among investors that they are artificially propping up demand Nvidia Corp chief executive officer Jensen Huang (黃仁勳) on Saturday said that the company would be participating in OpenAI’s latest funding round, describing it as potentially “the largest investment we’ve ever made.” “We will invest a great deal of money,” Huang told reporters while visiting Taipei. “I believe in OpenAI. The work that they do is incredible. They’re one of the most consequential companies of our time.” Huang did not say exactly how much Nvidia might contribute, but described the investment as “huge.” “Let Sam announce how much he’s going to raise — it’s for him to decide,” Huang said, referring to OpenAI
The global server market is expected to grow 12.8 percent annually this year, with artificial intelligence (AI) servers projected to account for 16.5 percent, driven by continued investment in AI infrastructure by major cloud service providers (CSPs), market researcher TrendForce Corp (集邦科技) said yesterday. Global AI server shipments this year are expected to increase 28 percent year-on-year to more than 2.7 million units, driven by sustained demand from CSPs and government sovereign cloud projects, TrendForce analyst Frank Kung (龔明德) told the Taipei Times. Demand for GPU-based AI servers, including Nvidia Corp’s GB and Vera Rubin rack systems, is expected to remain high,
RSS