Moody's: 5G adoption in Asia Pacific will be uneven

KUALA LUMPUR: The adoption of fifth generation (5G) mobile services will be uneven across the Asia Pacific (APAC) region with four pioneer markets strengthening its business case, says Moody's Investors Service.

In a note, Moody's said South Korea, China, Australia and Japan will forge ahead with higher revenues as 5G penetration rates deepen in these countries.

It said Hong Kong is likely to have the highest 5G adoption rate among the region's early adopters which include Malaysia, the Philippines and Singapore.

Moody's vice-president and senior analyst, Nidhi Dhruv said the roll-outs of 5G services will fuel revenues for operators in pioneer markets over the next one to two years.

"Potential margin improvements, however, will take longer because of higher marketing costs and the need to reach a critical mass of 5G subscribers that can cover the fixed costs of 5G infrastructure.

"Ongoing investments in 5G will weaken leverage and cash flows of early adopters," he said.

Meanwhile, Moody's noted that near-term revenue from 5G services will be insignificant for the late adopter markets of Bangladesh, India and Indonesia, given they will focus mainly on increasing 4G network capacity.

"Late adopters may need government support given the coronavirus pandemic is delaying the roll-outs of 5G services in these markets," it said. - Bernama

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