Monday, September 27, 2021

5G Will Run on Wholesale Model in Malaysia and Brunei

Reliance on wholesale market structure--one physical network and many retail competitors--has been a feature of fixed network policy for some time. It also is becoming the foundation of 5G platforms in some countries as well. 


Malaysia and Brunei, for example, will build a single national 5G physical network, which will support all potential retail providers of 5G service in those countries. Both of those networks will be state-owned. 


It is not a return to a monopoly framework at the retail level, but is a return to monopoly and government ownership at the facilities level. 


In the 4G era, only a few networks were built using the single wholesale provider model, notably in Mexico, Belarus and Rwanda. A few others were cancelled, including networks in Russia, Kenya and South Africa. 


As you might expect, such approaches are considered unwise by GSMA and other private firms. The dominant mobile framework globally continues to be private ownership of multiple physical facilities. 


Still, there has been concern about the cost of communications infrastructure for some time. But cost is but one of several drivers of national communications policy. 


source: Citi Research



The realm of possibility is directly affected by the costs of future networks. If the application of new architectures and technologies plus infrastructure sharing or offload contains the cost of physical networks, especially wireless and mobile networks, there will be less pressure on the business model and therefore less pressure to shift to wholesale-only infrastructure models.


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