Limited applications, costly devices slow 5G adoption in PH

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The usage of ultra-fast 5G internet in the Philippines has remained “relatively low” despite the country’s early adopter status in Asia-Pacific, Moody’s Investor Service said in a report last week.

According to Moody’s, the Philippines was among the second wave of countries that launched 5G between 2019 and 2021 alongside Hong Kong, Singapore and Malaysia.

In its report titled “Asia Pacific: Business case for 5G strengthens, but adoption will be uneven across Asia Pacific,” Moody’s also noted that Philippine revenues from 5G had been “insignificant, accounting for less than 5 percent of total revenues.”

Globe Telecom rolled out 5G in 2019 and was followed by PLDT’s Smart Communications.

Recent figures released by both companies suggested that around 1 percent of their subscribers could access 5G. The lack of affordable devices and limited applications were cited as reasons for low 5G use by local telco officials.

Among early adopters, Moody’s said Hong Kong and Singapore would see the fastest increase in 5G users compared with Malaysia and the Philippines.

It said the two markets were wealthier, allowing more consumers to afford 5G handsets.

Moreover, Hong Kong and Singapore are “smaller and more densely populated, operators will achieve 5G population coverage more quickly as they concentrate their network infrastructure over a smaller land area.”

Moody’s said pioneer markets South Korea, Japan, China and Australia would likely maintain their lead in adoption of 5G services.

It added that pioneer markets would see higher 5G revenues over the next two years, although profitability would lag until 5G users “reach a critical mass” to cover infrastructure investments and marketing costs.

For 2021, Moody’s said early adopter markets would spend 10 to 20 percent of capital expenditures on 5G while pioneer markets had allocated about 50 percent of capex as early as last year.

Use for 5G will also evolve over time with advanced applications such as medical services, robotics and smart home devices to emerge as the “driving force for 5G demand.” INQ