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Wednesday, 17 October 2018 00:00 - - {{hitsCtrl.values.hits}}
By Charumini de Silva
Dialog Axiata Plc, Sri Lanka’s premier connectivity provider, yesterday said it was ready to launch 5G technology within the next 24 months, showcasing its dominance through next-generation wireless connectivity which would fortify its reputation as a trailblazer in South Asia.
“We see that the next 12 to 24 months will be the ideal time to launch 5G in Sri Lanka and become first again in South Asia,” Dialog Axiata Plc Group CEO Supun Weerasinghe said while speaking at the Asia-Pacific WTTx Summit titled ‘Bridge Digital Divide, Accelerate Broadband to Household’ organised by GTI Informa and Huawei yesterday in Colombo.
By successfully carrying out the first 5G trial in all of South Asia last year, hitting a speed in excess of 35Gbps, he pointed out that it was important to identify the candidate bands for 5G and make operators align with that program to drive the 5G agenda.
Commending the Telecommunications Regulatory Commission of Sri Lanka (TRCSL) for being a progressive regulator in terms of identifying technology as a key enabler of economic growth and connector of the rural masses, Weerasinghe said the launch of 5G should be aligned with a regulatory roadmap.
“What we have seen is that in the entire regulatory ecosystem, Sri Lanka has always been ahead of the region when it comes to technology adoption, particularly in mobile and now with WTTx. The regulator has always been forward-thinking, enabling and allowing the operators to deploy the latest technology. Going forward, I think it is very important to continue the same momentum without losing sight of future technologies and without taking a break because 5G is coming,” he added.
He said Dialog started with 2G way back in the 1990s and in 2005 introduced 3G while first launching 4G WTTx in December 2012 before introducing mobile 4G in early 2013.
“We had a 5G trial last year and we have been working with the regulator to look at making Sri Lanka the first country again to launch 5G. Now it is about piloting and the commercial rollout of 5G which from a network side we are ready for, but through access to the right spectrum we will be able to deploy 5G as well as taking broadband to the next level, giving a much better experience, especially on the home front,” he stressed.
Weerasinghe said the company was keen to introduce 5G to homes initially through broadband as they see more scope and value through this avenue, while planning to launch mobile 5G later.
Underscoring the different terrain in Sri Lanka, he noted that while the top end of the country could afford to have a wired connection, the majority required a wireless system.
“You cannot connect everyone with a wire or fibre optics because the affordability is such that you need to have wireless solutions. Today we are running on a massive MIMO (multiple-input and multiple-output) WTTx network, the largest in South Asia, and we are very proud to have deployed that in Sri Lanka. These were all possible because of the progressive regulatory policies of the Government,” he pointed out.
Noting that spectrum was certainly a key enabler, Weerasinghe however said the other elements in the value chain were also important for sustainable development in the industry.
“When it comes to broadband, it is not only spectrum. I think in a voice era maybe everything was about spectrum but in the broadband era spectrum is just one part of the equation. You need good transport, good access to go out of the country. If the operator can manage the process and manage the value chain end to end then we can deliver a better experience and also deliver affordable broadband. But if you have to rely on multiple parties to deliver that experience then the cost gets added up and then it is difficult to drive straight,” he explained.
In terms of Dialog’s fixed wireless journey, which started way back in 2007 with WiMAX, he said it was not really technology that met commercial expectations or those of the customer.
“WiMAX wasn’t really viable. Maintenance was very challenging and it was a significant burden to keep services going,” he added.
Weerasinghe said early adoption of the technology was very important to make it commercially viable.
“Technologies are maturing fast. It is important to get into it early so that you have a long runway. If you get on to the technology later then you have a very short runway.
Then there is more time to monetise that technology investment. With 3G we had a good three years to monetise investment. We have stopped investing in 3G since last year and we had good runway for 3G. Similarly for 4G, we see a good 10-year runway before 5G becomes prime,” he asserted.
He also said that despite introducing WTTx in early 2012, the customer premises equipment (CPE) was close to $ 100 and thus the company was not making money.
“Financially we were not viable until 2016. We needed to work with multiple vendors to make sure CPE was affordable because that was one of the key entry barriers to driving adoption,” he added.
According to him, Dialog broadband has now entered over 400,000 homes, most of them coming in the last two years because the company was able to bring the entry price below $ 20.
“Below $ 20 you cannot even buy a 4G phone but you can start conceding 4G services by investing $ 20 for a router. Thus, CPE plays a key role in driving adoption,” he said.
Weerasinghe said that from last year onwards the company had been making financial returns to a point where its EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) margin had surpassed its mobile EBITDA margin.
“The mobile EBITDA margin is about 38%, but in the fixed business largely driven by fixed broadband we have even crossed 55% in EBITDA margin,” he added.
Although the return on investment (ROI) on capital is still low because of the large incumbent investment, Weerasinghe said the company was now making financial incremental returns at a faster pace as they had gained an adequate scale to make financial returns.
He also insisted on keeping the network as simple as possible so that complexity would not add to the cost.
“We have improved our network and investments so that the cost of delivering a GB was much cheaper on WTTx. What we have done is stay ahead of technology adoption, put forward the very latest technology so that the cost of delivering a GB is much lower.”
