Cisco says 5G rollout to boost telco revenues

By Arjay L. Balinbin, Reporter

TECHNOLOGY firm Cisco Systems, Inc. (Cisco) said the rollout of fifth-generation (5G) network services in the Philippines could increase the annual revenues of telecommunications companies by as much as $650 million beginning 2025.

Citing the latest study conducted by management consulting firm A.T. Kearney, Cisco Managing Director for Philippines Karrie C. Ilagan said in a news conference in Taguig City on Wednesday that the 5G penetration in major countries in Southeast Asia is expected to reach 25% to 40% by 2025.

She said the total number of 5G subscriptions in the region, which includes the Philippines, is expected to exceed 200 million in 2025.

In the Philippines, Ms. Ilagan said the rollout of 5G services could boost the annual revenues of Philippine teleco operators such as Globe Telecom, Inc., PLDT, Inc., and new player Dito Telecommunity Corp. “by as much as $650 million starting 2025.”

Cisco said the initial growth of 5G adoption will come from high-value customers and high-value devices.

“Subscriptions will start to scale as devices become more affordable,” it added.

Telco companies in the region, Cisco said, are likely to invest by 2025 about $10 billion in 5G infrastructure.

For his part, Cisco President for ASEAN Naveen Menon said enterprise customers are expected to contribute 18% to 12% of the telco firm’s revenue growth in the region by the same year.

The consumers are seen to contribute 6% to 9%, he added.

Mr. Menon also presented some challenges that telco firms will have to address as they rollout 5G in the region, which include the slow availability of spectrum for 5G services.

He noted that operators are indulged in a price war with 3G and 4G, consumers are excited about 5G and are willing to pay for better quality, and they will also need to bundle enhanced connectivity with solutions and applications.

“Telecom operators need to partner with ICT vendors and application providers to co-create customized use cases,” he added.

Ms. Ilagan noted that Filipinos, who lead in social media usage globally, are spending “billions of dollars” on online shopping.

“The rollout of 5G services will not only give them better experience but also increase the reach of digital connectivity across the country. Together, these trends will play a key role in boosting the Philippines’ economic growth in the coming years,” she explained.

For his part, Cisco Managing Director for ASEAN Dharmesh Malhotra said the company is working with telecom operators in their journey to 5G rollout.

He added that Cisco is “ready to engage with customers in ASEAN on 5G transformation.” — Arjay L. Balinbin