Singapore: Market Updates and the 5G Enterprise Growth Tailwinds

In Singapore, there are four Mobile Network Operators (MNOs): Singtel, Starhub, M1, SIMBA Telecom (formerly TPG Singapore). For its latest business updates in February 2023, Singapore Telecommunications (Singtel), the largest MNO in Singapore reported mobile service revenue of US$706.6 (S$953) million for the third quarter and nine months, which ended 31 Dec 2022, a 11.8% Year-Over-Year (YoY) increase from US$631.7 (S$852) million and a mobile Average Revenue Per User (ARPU) postpaid of US$24.50 (S$33), a 13.1% YoY increase from US$21.50 (S$29). In the same period, Singtel’s postpaid mobile customers also grew 2.2% YoY to 1,385,000. For the same reporting period, Starhub, the second-largest mobile operator, posted mobile revenue of US$418.50 (S$564.4) million, a 7.5% YoY increase from US$389.30 (S$525) million, postpaid mobile subscribers base of 1,565,000, and a mobile Average Revenue Per User (ARPU) postpaid of US$22.20 (S$30).

In the same month, M1, a subsidiary of Keppel Corporation, also reported revenue of US$589.45 (S$795) million (a decrease of ~1% YoY) for its consumer segment (accounting includes corporate mobile plans and handset sets) and a postpaid subscriber base increase of ~11% to 1,893,000 at end-2022. SIMBA Telecom, the fourth network operator in Singapore, the primary business entity of Tuas Limited (ASX:TUA), reported revenue of US$42.6 (S$57.4) million for 2022, 587,000 active subscriber base as of 31 July 2022, and an ARPU of US$6.80 (S$9.19).

Asia-Pacific (APAC) markets have been ramping up their 5G strategy. Specifically, China, the world’s biggest 5G network and one of the forerunners in the 5G race, has issued a plan calling for accelerated development of 5G as part of its “great rejuvenation”, according to a road map released by the ruling Communist Party and State Council on February 27, 2023. According to latest data from China’s Ministry of Industry and Information Technology, the total number of 5G base stations in China has exceeded 2.3 million in February 2023, accounting for more than 60% of the world. The China 5G momentum has continued strongly and as noted by ABI (IN-6801), the China Academy of Information and Communication Technology (CAICT) recorded a US$20 billion investment in 5G for the period of January to September 2022. It was also mentioned that at the end of November 2022, the number of China 5G subscriptions base was at 542 million, representing approximately 32% of the total number of 1.68 billion mobile phone subscriptions. For comparison, the take-up rate of 5G mobile services in Singapore has been conservatively estimated to be at approximately 16% and 26% of postpaid subscriber base for Singtel and Starhub, respectively. The US International Trade Administration (ITA) has also estimated the Singapore 5G subscriber base to be at 900,000 in Q2 2022. Elsewhere in the APAC region, 5G subscriber base stands at approximately over 4.5 million, 45 million, and 28.06 million for Australia, Japan, and South Korea, respectively, as of 4Q 2022.

Enterprise 5G though, is the larger commercial opportunity and it is expected to spark growth in the APAC 5G momentum. In the enterprise 5G space, 5G technology has provided an impetus for a new enterprise and industrial story in China; its operators have deployed over 6000 private 5G networks in 2022 alone.  In China, 5G enterprise applications have been deployed in diverse settings such as factories, logistics, manufacturing, energy, financial services, mines, ports, healthcare, museums, agriculture, etc. Across South Korea, Japan, Hong Kong, and Taiwan, 5G use cases have also matured as impact widens and 5G has been deployed extensively in heavy industrials, smart cities, Artificial Intelligence (AI), retail, metaverse, Extended Reality (XR), and a whole host of innovative use cases and applications. In Singapore, however, the pace of enterprise 5G adoption and commercial viability are still very much in its infancy as compared to its APAC counterparts. The overall 5G enterprise outlook and sentiment is positive as enterprises in Singapore continue the digitalization of their business operations with strong spending intentions from both businesses and governmental funding.

Although enterprise 5G adoption in Singapore is still very much in its early stages as compared to its APAC counterparts, Singapore MNOs, industry partners, and governmental bodies have been instrumental in building up a vibrant 5G Singapore eco-system. The 5G scene in Singapore has been buzzing with strategic partnerships throughout, and in February 2023, Nokia secured a ten-year extension to its existing nationwide 5G network deal with Antina, a joint venture formed by two Singapore MNOs (M1 and Starhub). For the deal, Nokia will deploy 5G Standalone (SA) network for both indoor and outdoor coverage, as well as expand the existing network utilizing Antina’s 3.5 GHz spectrum holdings. Additionally, Nokia will also equip new buildings in Singapore with its AirScale indoor Radio (AsiR) small cell solution to provide indoor coverage and  provide equipment such as 5G base stations, massive MIMO adaptive antennas for urban and wide-area coverage, and dual-band remote radio heads (RRH).

The Singapore MNOs have also been active participants in the 5G ecosystem. To help drive enterprise 5G adoption rate, Singtel have developed several technological solutions. For its latest enterprise 5G offering, in February 2023 Singtel launched Singapore’s first 5G-enabled smart retail showcase with the aim to help enterprises adopt digital solutions to enhance retail consumer experience. Designed to look like a real store, the showcase will feature technology solutions from Apple’s enterprise partners that would help enhance retail workflows, improve operational efficiencies, and create a positive customer experience. Together with the featured technologies in this showcase, enterprises would also be able to leverage Singtel’s high-speed connectivity and ultra-low latency 5G network and Multi-Edge Computing (MEC) solutions like Paragon, Apple products, and partner technologies for innovative solutions to apply in their physical or online stores to help them differentiate themselves and grow in a digital economy.

The Infocomm Media Development Authority (IMDA), a statutory board, is also one of the key movers of 5G in Singapore. IMDA has launched numerous grants, Research and Development (R&D) projects, and commercialization efforts under the IMDA 5G Innovation Program, a S$30 million fund set aside to accelerate the adoption and commercialization of 5G in Singapore. In December 2022, the IMDA also announced a 5G innovation grant for commercial deployment of 5G in Singapore. The grant would support up to 70% of qualifying costs for Singapore-registered enterprises or technology providers interested in commercializing or adopting 5G solutions (in the technology domains of Robotics/IoT, AI/Data, Augmented Reality (AR)/Virtual Reality (VR)). In March 2023, the Singapore Senior Minister of State for Communications and Information, Janil Puthucheary, also announced new 5G projects in Electric Vehicles (EV) manufacturing and river cleaning. In one project, more than a hundred 5G-enabled robots would be deployed on the factory floor of the Hyundai Motor Group Innovation Centre in Singapore to transport materials to vehicle manufacturing cells. The 5G technology will facilitate real-time data transmission between the Centre’s automated control system and the robots and it would also aim to reduce labor-intensive activities and improve workplace safety. The Hyundai Centre is billed as “the world’s first 5G-enabled built-to-order electric vehicle factory”.

All in all, ABI Research expects the 5G enterprise momentum to continue in Singapore and that growth outlook would be positive. The chief reason for such optimism is largely in part to the Singapore MNOs, industry partnerships, and strong governmental funding which would in-turn power up new possibilities for innovative and broadening applications of enterprise 5G across different enterprises.

(Note: Conversion from Singapore dollar (S$) to U.S. dollar (US$) is based on prevailing currency exchange rates.)