While Fifth Generation (5G) technology is slowly gaining popularity in the Philippine telco space, Fitch Ratings said investment in the said network may remain “limited” amid its lack of practical applications.
“5G capex (capital expenditure) is likely to be limited over the next 18 months, given the lack of applications and the absence of a robust ecosystem of customer devices,” the debt watcher said in a report issued on Friday.
The top executive of Ayala-led Globe Telecom, the first firm to introduce the 5G service to its home subscribers in July, earlier said the group would keep its focus on fixed wireless business as 5G-ready handsets have yet to be available for mass consumption.
“It’s useless to put up a network when there’s no handset available to the public or the handsets are too expensive for the public. Even today, the modems that we’re putting up for our fixed wireless are still very expensive but we felt it was time to do it,” Globe4 President and Chief Executive Officer Ernest Cu told reporters.
The telco’s Globe At Home Air Fiber 5G is currently present in select areas in Metro Manila and Greater Manila Area, with Visayas and Mindanao expansion being eyed within the first half of 2020.
PLDT Inc., meanwhile, is looking to seal a deal with “more than one vendor” for its 5G rollout, targeting to tap its home and enterprise subscribers.
Its chairman Manuel Pangilinan also echoed Cu’s statement about the issue on the availability of smartphones in the market, as well as the fact that there was no existing standards for 5G.
“Telcos will depend on existing 4G technologies to provide sufficient speeds to cater for data demand in the next three years,” Fitch Ratings said.
Both telcos on Thursday reported they continued to bank on the booming data usage of Filipinos, with Globe recording 20-percent growth in net income in the first nine months to P17.7 billion, while PLDT booked P16 billion, down by 2 percent.
Despite lower earnings from higher labor costs and lower gain from the sale of its shares in Rocket Internet, PLDT posted its highest-ever revenue level of P119 billion in the period.
On Friday, PLDT traded flat to close at P1,110 apiece, while Globe saw its climb by 1.60 percent or P30 to finish at P1,900 each.