瑞信-5G：低成本才是王道

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 allocations are to be awarded in March 2019. Operators a re 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 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 decline 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. The proximity of real costs (spectrum fees and capex) —in contrast with a lack of clarity over the monetization of 5G—leads us to adopt a relatively cautious stance on telcos in China, Australia, Korea and Japan. Our top OUTPERFORM calls —namely DTAC, PT Telkom and SingTel—have exposure to markets that look 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. re 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 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 decline 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. The proximity of real costs (spectrum fees and capex) —in contrast with a lack of clarity over the monetization of 5G—leads us to adopt a relatively cautious stance on telcos in China, Australia, Korea and Japan. Our top OUTPERFORM calls —namely DTAC, PT Telkom and SingTel—have exposure to markets that look 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.