The deployment of 5G appears to be finally gaining speed and scale. Yet, communications service providers (CSPs) in Southeast Asia continue to remain cautiously optimistic about its cost versus-revenue proposition.

There are, of course, good reasons for this. 5G’s speed and coverage capabilities rely heavily on network densification, which requires not only the addition of towers and small cells to the network, but also an evolution in the transport network and transition to a cloud-native core.

These cost considerations are further compounded by short-term revenue concerns—in particular, the lack of killer use cases in the enterprise segment, and limited appetite in the consumer segment for the premiums demanded by 5G-enabled devices.

Executing a cost-effective migration

Given that CSPs are at different stages of maturity in their transition to 5G, it is difficult to pinpoint a one-size-fits-all roadmap for deployment. Recognising this challenge, the 3rd Generation Partnership Project (3GPP)—a global organisation uniting seven telecommunications standard development organisations—has developed a series of six different 5G migration options for the industry (see figure below).

It is important to note that while all six proposed migration options will be supported, the 3GPP intends for the industry to align on a single approach to minimise fragmentation of the 5G ecosystem from hardware, software, and interoperability perspectives. Furthermore, adopting a consistent approach could also considerably reduce complexity, lower system integration costs, and lessen the amount of testing that will be required before a system can go to market.

Based on current industry consensus, the most cost-effective and future-proof trajectory is likely to be for CSPs to migrate from Option 1 (4G LTE SA network with EPC) to Option 3 (5G NSA network with EPC and LTE-NR dual connectivity), and then to Option 2 (5G SA network with 5G Core).

Two key considerations

There are two key considerations that CSPs in Southeast Asia will need to take into account as they work to execute a cost-effective 5G migration according to the abovementioned trajectory:

  • The ability to cost-effectively estimate capacity demand and translate it into network capacity is a never-ending challenge that is likely to become even more complex in a 5G world, where there would be a proliferation in the number of use cases that a given physical infrastructure will need to support.
  • The use of a cross-domain design approach to network planning is, therefore, critical to enabling CSPs to sweep away the inefficiencies of traditional organisational siloes, and make more informed investments in their network upgrades.

  • In the migration from 4G LTE to 5G NR, CSPs should consider re-using existing assets wherever possible, including spectrum, to keep their total cost of ownership under control.
  • But a word of caution is in order: CSPs must carefully manage the trade-offs between 4G LTE and 5G NR, and determine the optimal level of co-existence that they would like to have between the two; beyond a certain threshold, it would become counterproductive to forgo potential 5G NR gains in favour of interworking with existing 4G LTE networks.