Telco firm: Handset prices need to come down to see wider 5G adoption

ABS-CBN News

Posted at Oct 22 2019 10:45 PM

A logo of the upcoming mobile standard 5G is pictured at the Hanover trade fair, in Hanover, Germany March 31, 2019. Fabian Bimmer, Reuters/file

MANILA - The Philippines may have been the first country in Southeast Asia to roll out commercial 5G services, but widespread adoption won't happen until handset prices come down, the head of one of the country's 2 major telcos said on Tuesday. 

Globe Telecom CEO Ernest Cu said the company is still waiting for handset makers to release affordable 5G phones.

"We need to bring down handset prices from $1,200 (P62,000) range now to, in about 6 to 8 months, handset prices to come around $300 (P15,000) which again now should bring it to a more affordable range for people," Cu said in a statement. 

Globe rolled out 5G services in June offering speeds of up to 100Mbps, targeting homes and offices that still have no fixed-line broadband services.

Smart, meanwhile, is planning to offer commercial 5G services next year.

Fitch Ratings also said handset prices need to go down before 5G gets widespread adoption as prepaid subscribers make up the bulk of telco mobile clients.

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The Philippines was the first in Southeast Asia to roll out 5G, but the implementation of the new service is likely to remain "patchy" until 2021, said Janice Chong, Fitch Ratings director for Asia Pacific corporate ratings. 

Widespread adoption, meanwhile, will take much longer.

"In the Philippines, if you talk about mass adoption, it's not likely to happen until say 4 to 5 years later," Chong said. 

She added that there was also uncertainty over how telcos could earn from 5G, and that in the near term, monetizing 4G services was more important. 

Industry tracker Opensignal said both Smart and Globe had 4G services available for 75 percent of the country.

In Metro Manila, both operators topped 86 percent 4G availability, Opensignal said in its September report.