KUALA LUMPUR: The RM7bil to RM8bil investment for 5G deployment in Malaysia indicated by the National 5G Task Force of the Malaysian Communications and Multimedia Commission (MCMC) is likely for targeted sites for high data usage, AmInvestment Research says.
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“Our channel checks with industry sources have indicated that the capex per square km could be 10 times higher than 4G for selected locations.
“Over the past five to six years, we estimate that 4G capex spent by telcos has already surpassed RM15bil to date on a nationwide coverage programme, ” it said on Wednesday.
AmInvest Research said in its view, this low 5G investment estimate could involve only the initial 700MHz and 3.5GHz bands which are planned to be awarded to a consortium of multiple licensees, including foreign operators.
Recall that this single-entity approach is envisioned to minimise costs and prevent duplication of infrastructure against the backdrop of additional spending requirements to enhance 4G networks.
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Additional spending for 4G is still required given that only 40% of mobile towers in the country are fiberised, which has resulted in sub-optimal speeds and connectivity for 4G services.
Evidently, a substantively higher proportion of fiberised mobile towers is needed to deploy 5G services.
“Maintain Neutral outlook on the sector given the escalating capex requirements against the backdrop of government-targeted fiberised ARPU reductions under the National Fiberisation and Connectivity Plan (NFCP).
“Our only Buy currently is Axiata, given its low EV/EBITDA valuations and rising prospects for monetisation of its multiple businesses, ” AmInvest Research said. -The Star