One of the quirks of Asian 5G is that several governments marked the arrival of the new generation by adding a competitor.

This suggested a sense of confidence in the new technology that even at the time seemed questionable.

So far, it has not gone well for the new entrants, although consumers have a good deal to cheer about.

Japan, the Philippines and China all chose to add a player to a saturated market. Each may have come to the decision via a different route, but not even the magic of a super-advanced technology can overcome the handicap of a limited addressable market.

In contrast with these mostly northeast Asian countries, virtually every mobile market in southeast Asia consolidated ahead of 5G, with operators and regulators concluding that the market was more than adequately served.

Figure 1: It seemed like a good idea at the time, but three new Asian operators are fighting for survival after entering heavily-served markets.
(Source: zhang kaiyv on Unsplash)

The most high-profile of the new entrants is Rakuten Mobile, which debuted with a bold plan to undercut its Japanese rivals with a twenty-first century cloud-native network.

That was the dream. In reality, it has been slugging it out in an old-school price war, with most of the blows laid by its bigger competitors.

It had a third-quarter operating loss of 121 billion Japanese yen (US$864 million) on revenue of JPY89 billion ($638.8 million).

Incumbents NTT Docomo and SoftBank both say the price-cutting cost them 50 billion yen ($360 million) in revenue in the first half of the year. However, both those companies expect to recover from the price war next year. But Rakuten's route to profits is nowhere as clear as that.

A mountain to climb

In the Philippines, Dito Telecommunity, 40% owned by China Telecom, has made multiple attempts to raise fresh funds as its losses have steadily widened, aided by some steep forex losses.

It says it's on track to meet its year-end target of 12 million users, and parent Dito CME has said it could make its first profit in 2026.

But if incumbents PLDT and Globe Telecom are feeling any pain, there's no sign of it. Both reported EBITDA margins of above 50% in the third quarter.

In China, the new operator China Broadnet is still in the soft launch stage but it has a mountain to climb.

Mobile penetration is above 100% and the three incumbents have already signed up close to 1 billion 5G package subs. Many of those might still be using 4G phones but they will be difficult to woo away.

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With its slender financial base, China Broadnet is in no position to wage a Rakuten-style price war, even if its government owners allowed it.

As a state-run entity, it's not clear what its KPIs might be. But one of its big tasks is to grow 5G across rural China with its lowband 700MHz spectrum. It has struck a network sharing agreement with China Mobile, which will bear the brunt of the cost of the rollout.

As long as Broadnet brings connectivity to remote regions, its government backers will likely ensure it has the funds to stay afloat.

But its time as a profitable concern is a long way off.

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— Robert Clark, contributing editor, special to Light Reading