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.”
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
Prices of gasoline and diesel products at domestic gas stations are to fall NT$0.2 and NT$0.1 per liter respectively this week, even though international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices continued rising last week, as the US Energy Information Administration reported a larger-than-expected drop in US commercial crude oil inventories, CPC said in a statement. Based on the company’s floating oil price formula, the cost of crude oil rose 2.38 percent last week from a week earlier, it said. News that US President Donald Trump plans a “secondary