1、DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON-US ANALYSTS. US Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should b
2、e aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. 13 February 2019Asia PacificEquity ResearchTelecommunication Services Asia Telecoms SectorCONNECT
3、IONS SERIESThe Credit Suisse Connections Series leverages our exceptional breadth of macro and micro research to deliver incisive cross-sector and cross-border thematic insights for our clients.Research AnalystsColin McCallum, CA852 2101 6514colin.mccallumcredit-Keiichi Yoneshima81 3 4550 9740keiich
4、i.yoneshimacredit-Sunil Tirumalai91 22 6777 3714sunil.tirumalaicredit-Entcho Raykovski61 3 9280 1716entcho.raykovskicredit-Varun Ahuja, CFA65 6212 3017varun.ahujacredit-Danny Chan60 3 2723 2082danny.chancredit-Soyun Shin82 2 3707 3736soyun.shincredit-Billy Lee852 2101 6529billy.leecredit-Viral Shah9
5、1 22 6777 3827viral.shahcredit-Lachlan Brown61 3 9280 1659lachlan.browncredit-5G: Counting the cost and picking the winnersFigure 1: 5G costs becoming a realitytelco capex forecasts (US$ mn) 020,4,060,8,010,2,0FY17 FY18 FY19 FY20ChinaIndiaIndoesiaMalysiaThailndAustraliHog KongKoreTaiwnSingporeJpSour
6、ce:, Credit Suisse estimates Operators beginning to incur real costs for 5G. Operators in Korea and Australia have already purchased 5G spectrum at auction. In China, on 7 December 2018, the MIIT issued allocations of mid-band 5G spectrum to the three China telcos for nationwide trials, and in Japan
7、 allocations are to be awarded in March 2019. Operators are therefore beginning to incur real costs for 5G, in the form of spectrum fees and, in 2019, capex. End use cases still not convincing. There still seems to be no pressing need for nationwide 5G coverage for mass market consumers, in the way
8、that video, e-commerce and gaming were facilitated by 4G. This suggests that a gradual rollout using a hotspot approach would be the least damaging strategy for profitability, but this strategy is unlikely to be acceptable in Japan, Korea or China. We expect returns on invested capital (ROIC) to dec
9、line in Japan, China, Australia and Hong Kong over FY19-24. Factoring in expected spectrum costs in Hong Kong, we lower our target prices for SmarTone, HKT Trust and HTHK by 9.1%, 1.1% and 3.2%, respectively, to HK$11.15, HK$13.05 and HK$3.05, respectively. Overweight 4G market repair situations. Th
10、e proximity of real costs (spectrum fees and capex) in contrast with a lack of clarity over the monetization of 5Gleads us to adopt a relatively cautious stance on telcos in China, Australia, Korea and Japan. Our top OUTPERFORM calls namely DTAC, PT Telkom and SingTelhave exposure to markets that lo
11、ok set to adopt a gradual hotspot approach to 5G rollout, while they enjoy improving 4G competitive dynamics. China Tower Corp (CTC) is likely to prove the winner from 5G over-investment in China.每 日 免 费 获 取 报 告1、 每 日 微 信 群 内 分 享 7+最 新 重 磅 报 告 ；2、 每 日 分 享 当 日 华 尔 街 日 报 、 金 融 时 报 ；3、 每 周 分 享 经 济 学 人4
12、、 行 研 报 告 均 为 公 开 版 ， 权 利 归 原 作 者所 有 ， 起 点 财 经 仅 分 发 做 内 部 学 习 。扫一扫二维码关注公号回复：研究报告加入“起点财经”微信群。 13 February 2019Asia Telecoms Sector 2Focus charts and tablesFigure 2: Key enablers of 5GSource: Telstra5G investor day, December 2018Figure 3: Status of 5G in AsiaMid-band spectrum issuance Timing/expected
13、 timing28GHz spectrum issued? 5G soft launch 5G commercial launchSpectrum issuedAustralia Yes 2018 No 2019 2020China Yes 2018 No 2019 2020Korea Yes 2018 Yes 2019 2020Auctions/ applications plannedJapan Yes 2019 No 2019 2020Hong Kong Yes 2019 No 2020/2021 2021Plans not yet clearSingapore No 2020 No 2
14、020/2021 2021Taiwan No 2020 No 2020/2021 2021Indonesia No Post 2020 No 2020/2021 2021Thailand No Post 2020 No 2020/2021 2021Malaysia No Post 2020 No 2020/2021 2021India No Post 2020 No Post 2021 Post 2021Source: Company data, Credit Suisse estimatesFigure 4: 5G spectrum costs in Asia to dateCountry
15、Operator Mid-band spectrumUpfront cost (US$ mn)Price per MHz per pop (US$)High-band mmWave spectrumUpfront cost (US$ mn)Price per MHz per pop (US$)Total cost as % of market capAustralia Telstra 1x60MHz at 3.6GHz 280 0.19 None - - 1.0%Australia Optus 1x100MHz at 3.5GHz *69 0.03 None - - n.a.Australia
16、 Vodafone/TPG JV 1x60MHz at 3.6GHz 191 0.13 None - - n.a.China China Mobile 1x200MHz at 2.6GHz, 1x100MHz at 4.9GHz- - None - - 0.0%China Unicom 1x100MHz at 3.5GHz - - None - - 0.0%China China Telecom 1x100MHz at 3.5GHz - - None - - 0.0%Korea SKT 1x100MHz at 3.5GHz 1,097 0.21 1x800MHz at 28GHz 187 0.
17、005 6.8%Korea KT 1x100MHz at 3.5GHz 871 0.17 1x800MHz at 28GHz 187 0.005 15.8%Korea LGU+ 1x80MHz at 3.5GHz 729 0.18 1x800MHz at 28GHz 187 0.005 15.1%Source: Company data, Credit Suisse estimates Note: : *2x50MHz spectrum bands were purchased for A$95.3m in October 2000 by AKAL Pty Limited (Unwired),
18、 later named Vividwireless. Optus acquired Vividwireless for A$230m in February 2012, which owned the aforementioned 100MHz of spectrum in the 3.5GHz frequency and 98MHz of spectrum in the 4G 2.3GHz frequency13 February 2019Asia Telecoms Sector 35G: Counting the cost the common thread being the coll
19、ection of increasingly vast numbers of datapoints from individuals and/or machines, the communication of those datapoints to centralised locations for processing using Big Data analytics, and then the communication of outcomes and recommendations to people and machines for action in response. We agr
20、ee that in aggregate this represents a revolution in the ways in which financial services, healthcare, security, energy, manufacturing and transportation will be organised Operators will use 5G for capacity provision but demand pull use cases still lacking13 February 2019Asia Telecoms Sector 10and p
21、rovided, and we expected a high level of level of disruption and opportunity across these industries. However, many of the communications requirements are already being handled by 4G and 4.5G radio interfaces to humans and machines. Crucially, this remains the case today; 5G radio equipment in most
22、cases has not proven to be a necessary key enabler to these industry changes, which are already happening during the 4G era.Figure 11: Industry verticals potentially impacted by 5GSource: Company data, Credit Suisse estimatesFinancial services initial viewThis refers to Fintech (technology to suppor
23、t financial services) applications, as well as online payment and mobile wallet applications. Of course, these services are already available in most markets in Asia, with Tencent and Alibaba having attracted huge scale to their online payment platforms in China. In Indonesia Telkomsel is building s
24、cale with its T-cash mobile wallet application and in Thailand AIS has revamped its mPAY mobile wallet application. Currently, all of these applications rely on contactless short-range Near Field Communications (NFC) technology to connect with the retail point of presence, and existing 3G and 4G cel
25、lular networks, or existing terrestrial networks for transmission. Apple Pay uses the same technologies. There has been no particular requirement for the ultra-low latency or ultra-high speed of 5G to provide these sorts of services.Financial services incremental progress?Mobile wallet apps continue
26、 to expand, supported by current 3G and 4G transmission speeds, together with short-range NFC technologies. With 5G tablets set to become available in 1H19, the higher speed and lower latency proffered by 5G could facilitate either smaller or mobile pop-up branch networks. These might be supported b
27、y encrypted, high speed access to cloud-based services and supported by edge computing, rather than supported fixed PC computers and servers within expensive, permanent branch networks. Automotive initial viewAutonomous driving is often mentioned as a potential application for 5G, given expected req
28、uirements for both low latency and high transmission speeds. However, most autonomous driving tests currently under way involve processing and decision-making onboard the vehicle itself, rather than remote driving. The telecoms aspects of current vehicle telematics are being handled by 4G and 4.5G n
29、etworks, though most cars at present are at most achieving Level 2 autonomy (i.e., driver assistance such as Teslas Autopilot). Level 4 autonomous cars (cars that can drive themselves through near autonomy, but still include pedals and a steering wheel) are still not expected until circa 2021 at the
30、 earliest, and for most models decision-making remains onboard, rather than remote. No car manufacturer has as yet laid out a timeframe for Level 5 (completely autonomous) vehicles.4G/4.5G can handle most current Fintech apps but 5G could better support mobile branch networksAutonomous driving is de
31、veloping slowly 13 February 2019Asia Telecoms Sector 11Automotive incremental progress?Gradual technological progress is being made, with successful tests of truck platooning in particular in multiple countries. This is set to save labour costs and increase fuel efficiency for road haulage companies
32、. However, most platooning tests have involved the use of truck-to-truck WiFi networks at for example 5.9GHz, rather than 5G. For individual vehicles, following the fatal accidents involving Tesla and Uber assisted-driving cars, both in March 2018, the legal framework for autonomous vehicles, and in
33、 particular the vigilance of human back-up is a subject of intense debate. The Pennsylvania Department of Transport only announced that it would let Uber resume autonomous autonomous testing in Pittsburgh on 19 December 2018, after a nine-month hiatus. The potential for deep society-wide debates ove
34、r safety and legal responsibility could result in Level 5 driving being delayed for multiple years, and therefore obviating any near-term need for wide 5G networks for provision of mass market automotive services, even if the technology direction shifts more towards remote driving and away from on-b
35、oard processing. Public transport initial viewThis might include infotainment and entertainment on the move. This could be a potential use for small cell 5G networks at high mmWave bandwidths given the short distances involved in servicing customers on public transport, in much the same way as WiFi
36、is currently deployed on buses, trains and, increasingly, planes.Public transport incremental progress The key change over the last year has been the increasing prevalence of inflight WiFi services across a larger number of international carriers. This system relies on Ku-band satellite uplink and d
37、ownlink to the aircraft (again, a much older generation technology) then linked by the geostationary satellite via ground stations to the world wide web.Energy, utilities and mining initial viewEnhanced machine-to-machine communication has potential implications for smarter, more efficient and there
38、fore less wasteful deployment of energy resources on an increasingly on-demand basis. Again, current (3G and 4G) technologies are capable of transmitting relatively low volumes of data per machine, with powerful central processors and AI then capable of driving optimal energy solutions, which can th
39、en be transmitted over to utilities using current wireless technologies. The greater challenges in this segment probably lie in the heavy investmentand therefore lack of flexibilityin current power generation, storage and transmission equipment, rather than in a need for more rapid communication of
40、data points from multiple sources. The communications needs of a more decentralised grid can already be supported using 4G and 4.5G technology.Energy, utilities and mining incremental progressThe legal hurdles to the development, testing and operation of autonomous driving solutions are dramatically
41、 lower on private roads within isolated mines and forestry areas than on public roads. On-board decision making can also be much simpler, with limited directions of travel and limited traffic volumes, and it is therefore here that more progress has been made. Remote monitoring is still being comfort
42、ably supported by 4G and 4.5G access. The lower latency and higher speed of 5G could be useful for some specialised tasks such as remote controlled drilling and detonation work (which currently often relies on fibre optic cables). Manufacturing initial viewThe concept here is that, similar to energy
43、 utilities, the manufacturing industry would also be much more responsive to real-time information, with much shorter business cycles changing in accordance with customer demand. This involves receipt of information from multiple sources, Big Data analytics, and communication to manufacturing outlet
44、s through an industrial Internet of Things (IoT). held back by legal and safety concerns as much as by technologyWe expect public transport hotspotsThe energy revolution can be facilitated by 4G/4.5G 13 February 2019Asia Telecoms Sector 12Manufacturing incremental progressAgain, much of the wireless
45、 machine-to-machine communication and transmission can already be handled by 3G, 4G and 4.5G technologies. The very low latency facilitated by 5G could open up more elements of the smart factory or distribution hub to remote and wireless operations, rather than relying on fibre optic cables. We cont
46、inue to hold the view that these types of complex wireless operations are likely to occur in specific factories or industrial parks where the relevant machines are in operation.Media and entertainment initial viewMedia and entertainment were undoubtedly the defining applications of the 4G era. Since
47、 all that is required for high quality video is relatively stable transmission at 5Mbps, 4G networks and devices facilitated gaming, e-commerce, social media and mass-market consumption of movies, news and entertainment over mobile phones. This 4G-driven phenomenon propelled Tencent and Alibaba to b
48、ecome the largest Asian companies by market capitalisation.On the video production side, at the 2018 winter Olympics in Pyeongchang, 5G was used by Intel to facilitate drone light shows, and 100 cameras at the ice rink sent video over 5G to KTs processors. Viewers could then pick a camera to replay
49、the action at the desired angle. Similar techniques were used to give personalised views of ski racers over 5G. Intel hopes this could help set the precedent for 5G hotspots at sports events.However, for video consumption, under 4G neither latency nor speed currently act as major bottlenecks to viewership on HD, or even 4K, should handsets be upgraded to handle receipt (at present networks sp
