A spectrum auction is set for next month, with connectivity scheduled for mid-2020.
In the global race to implement the next generation of telecommunications technology, Taiwan is poised to be an early adopter. The Tsai administration, as part of its effort to promote Taiwan’s digital economy, has pushed for the rapid build-out of a 5G network.
A spectrum auction is due to take place in early December, slightly earlier than originally planned in order to keep pace with other adopting countries. The preparatory period for spectrum bidders was also shortened from two months to 45 days.
Taiwan is now on course to begin enjoying nationwide 5G connectivity by the middle of next year, on a similar timeline as Singapore and Hong Kong. However, some stakeholders – telecom operators in particular – have criticized aspects of the government’s plan, including the timeframe and its fairness and clarity with regard to certain issues.
5G is set to be a game-changer, making possible the ultra-rapid transmission of massive amounts of data measured in gigabits per second, as opposed to the peak rates of hundreds of megabits per second with 4G connections. It will also enhance the operability of such existing applications as autonomous vehicles and VR due to its low “latency” – the amount of time needed for data to get from one point to another in a computer network. The result will be a vastly improved experience for mobile users and a major advance in the overall digital infrastructure.
Due to keen competition among governments and industrial players, 5G networks are likely to proliferate rapidly. Globally, over 30 5G networks are currently in operation. Ericsson equipment powers 19 of these networks across four continents, all of which went live following the launch of the first network in April. The pace of expansion has exceeded most peoples’ expectations, says Dann Yao, vice president and chief technical officer at Ericsson Taiwan, leading him to predict that the uptake of 5G will be faster than it was for 4G.
The process of establishing a national 5G network requires both the public and private sectors to take a number of complex steps. To clarify the objectives and set actionable goals for each participant, the Executive Yuan’s Office of Science and Technology issued the Taiwan 5G Action Plan in May 2018.
The plan identifies five main areas crucial for 5G development: establishing testing sites for vertical 5G applications, creating an environment conducive to innovative 5G applications, perfecting core 5G technologies and cybersecurity, planning for the release of 5G spectrum in a way that will best serve overall interests, and revising laws and regulations to meet the needs of the 5G environment.
“The first phase of the plan is to get the network up and running on a commercial basis,” says Tsai Sze-hong, Executive Secretary of the Office of Science and Technology. “The spectrum we are providing during this phase is specifically focused on potential 5G operators and will be apportioned through a bidding process overseen by the National Communications Commission.”
Since 5G utilizes a very broad range of radio frequencies, the auction scheduled for next month will offer bandwidth from three different frequency bands: 270MHz from the 3.5GHz mid-band spectrum, 2,500MHz from the 28GHz high-band, and 20MHz from the 1,800MHz band.
NCC Commissioner Guo Wen-chung says that the mid- and high-bands were chosen based on the approach taken by other countries, mainly South Korea and Japan. He cites two reasons for including the third band. “In our previous auction for 4G spectrum, this band was not sold off and remains there,” Guo explains. “In addition, it can be used as a kind of support to improve coverage. In the future, telecom operators can use the 3.5GHz band for downloading and the 1,800MHz band for uploading.”
In Taiwan, where mobile devices seem to be ubiquitous, the introduction of 5G networks will likely be warmly welcomed by consumers. On a per capita basis, Taiwan is one of the biggest consumers of mobile data in the world. Estimates vary on usage, but Ericsson’s Yao says the average exceeds 20 gigabytes per user per month – more than double the level of 4G data consumption in South Korea. Taiwan enjoys almost universal coverage of mobile connections thanks to the island’s patchwork of existing 2G, 3G, and 4G networks, plus some of the world’s highest mobile and fixed wireless broadband speeds.
While a key reason for the move to 5G is to meet Taiwanese consumers’ voracious appetite for broadband data, the purpose of the rollout is wider than with past generations of mobile technology. “The primary uses of 4G revolved around human communication, with some machine communication also possible – but with 5G a large portion of the network is dedicated to the machine side,” says Hsiao Chia-an, a section chief at the Ministry of Transportation and Communications.
“Also, whereas the introduction of 4G was mostly focused around B2C applications, the Ministry and the NCC believe that B2B uses will be the focal point in the early stages of 5G,” Hsiao notes. “However, these functions will coexist and complement each other in the new environment.”
In light of the more varied applications possible with 5G, the government plans to set aside a certain frequency range for the development of related vertical applications. For example, one of the major non-consumer-oriented benefits of 5G that both government and business are looking forward to is its impact on development of the Internet of Things. While IoT has made huge progress under the current 4G ecosystem, the limited capacity has resulted in slower response times for connected devices.
At the same time, the continuous exchange of data that occurs with IoT applications puts a big strain on current networks and drains battery power quickly. But 5G’s low latency facilitates real-time communication between devices, improving their safety and reliability. It will also bring enormous savings in network energy usage and the battery life of those devices.
The greater interconnectedness, openness, and flexibility of a 5G ecosystem give rise to some serious security concerns. Whereas previous generations of mobile networks relied on hardware for most network functions, such functions become virtual software capabilities with the introduction of 5G.
In addition, a large amount of the 5G computing is performed “at the edge” – in mobile or IoT devices – as opposed to the centralized architectures associated with 4G and earlier generations. This factor opens both individual users and entire networks to major security threats, especially if the software produced by vendors is poorly constructed. If steps are not taken early in the construction phase to reduce these vulnerabilities, attempts to mitigate them could be “like attempting to plug holes in an infinite wheel of Swiss cheese,” as a senior U.S. Department of Homeland Security official put it.
Confronting this reality, the Taiwan government has made cybersecurity a priority issue in its plan to begin developing the nation’s 5G network. One of the directives under the Executive Yuan’s 5G Action Plan is to create a unified national policy on cybersecurity. An initial step is a requirement that successful bidders in the upcoming spectrum auction submit a cybersecurity plan when they apply for operating permits.
The relevant regulations have been amended to specify 17 items to be covered in such a plan. These include a description of the applicant’s cybersecurity policies and objectives, the formation of a cybersecurity promotion unit within the applicant’s organization, and an evaluation of the major risks that the future network may face. The Executive Yuan’s Tsai notes that regulators responsible for certain industries will also be tasked with adopting cybersecurity standards for their particular areas.
Industry backlash
Vocal criticism of the government’s plan has come from Taiwan’s telecom operators. They say they have felt pressured into adopting the new technology quickly despite the high costs of purchasing spectrum, buying and installing the necessary hardware and software, and launching the new networks.
“The general consensus is that it’s a bit rushed,” says Taiwan Mobile President Jamie Lin. “Because the whole process has been sped up, I don’t think it provides administrators with enough time to determine how to use regulatory tools to achieve an optimal number of 5G network deployments.”
Lin also notes that the lower end of the mid-band spectrum (3.3 to 3.4GHz) being auctioned off in the first phase is unique to Taiwan for 5G use, meaning that special equipment and mobile devices will need to be produced in order to work seamlessly with the network. Since consumers will expect their new 5G-compatible phones to work with any carrier, Taiwan’s major telecom operators have very little time to overcome obstacles to the interchangeable use of devices.
Rachel Liu, deputy secretary-general of the Taiwan Telecommunication Industry Development Association, which represents Taiwan’s top five telecom operators, says the organization’s issues stretch back to the implementation of 3G and 4G in Taiwan. “Telecom operators have never had a government agency specifically tasked with providing administrative guidance to us,” she says. “We are therefore a special self-regulating industry.”
The situation has not changed much with the current 5G plan, she says. “The government is offering a number of subsidies and benefits to telecom equipment and vertical application providers. However, there is no agency or department that has looked at this from our perspective, to see what our strategies and advantages are in the buildout of 5G.”
Another side effect of the shortened timeline for introducing 5G is that there is less opportunity to consider innovative alternative solutions to the way networks are currently structured. Cisco Systems Taiwan, for example, has proposed using open network infrastructures – also known as O-RAN or open radio access networks – as the basic architecture for Taiwan’s 5G networks. In contrast to the current system, in which expensive proprietary hardware and software from companies like Ericsson and Nokia are used to build out the entire network, an open infrastructure would incorporate the products and services of many different vendors.
Cisco Regional Manager Jeffrey Wang says that the O-RAN approach would not only provide greater opportunities for Taiwan’s local vendors, but would save up to 50% on both establishment of the network and the operating expenses needed to run it. Although the authorities did not accept the idea because of time constraints, Wang says he hopes the O-RAN model may be adopted in the future. He describes the approach as an international trend. “It’s like moving from a mainframe to a PC – an open world,” he says.
Meanwhile, in a controversial proposal in late September, the Ministry of Economic Affairs sought to open discussion on setting aside the 3.7 to 3.8GHz mid-band range for the exclusive use of vertical application providers in developing their products and services. The announcement drew the ire of the major telecoms, but also received criticism from legislators and the NCC. Opponents argue that the proposal is unfair in that the qualifying enterprises could obtain spectrum without going through the same bidding process as telecom operators.
“We are not advocating for the raising of anyone’s fees for buying spectrum,” says Liu of TTIDA. “We are merely asking that all future users of that spectrum be treated equally.”
The NCC’s Guo attributes the negative reaction in part to the high-demand for the mid-band spectrum, which has a wider scope of coverage than high-band but contains fewer frequencies. The proposal is still being deliberated and will not be part of the spectrum release this year.
One of the biggest concerns leading to hesitation on the part of telecom operators is the high cost of building out their own 5G networks. “The equipment is going to be three times more expensive than 4G equipment – US$150,000-$300,000 per 5G base station as opposed to US$50,000-100,000 per 4G station,” says Taiwan Mobile’s Lin. “In addition, the networks will consume three times more power than 4G per base station and will require three times more base stations to provide coverage to the same area.” Lin estimates that a national 5G network will consume nine times the electricity currently used for the 4G network.
For his part, Yao of Ericsson cites what he considers to be some misconceptions about 5G’s potential costs and energy usage. In a 4G ecosystem, the transfer of increasingly large amounts of data will eventually become untenable, he says. Although major capital expenses for equipment and installation are required upfront, 5G networks will significantly reduce the cost and energy expended in the long-term, he argues.
Despite the areas of apprehension among some industry players, most members of the industry are still optimistic about the coming changes. There is consensus that Taiwan is an ideal place to implement 5G, though some disagree regarding the timeline for that implementation.
One of the main reasons for the optimism is Taiwan’s world-renowned ICT sector, which gives the country a built-in supply chain for establishing and operating the 5G network and all the various vertical applications enabled by it.
Taiwan also has a well-developed optical fiber network to facilitate 5G communication. According to the Executive Yuan’s Tsai, the coverage rate for Gigabit Ethernet connections in Taiwan is a high 70%. “The denseness of Taiwan’s optical network is an advantage it has over some other countries, where they may encounter a bottleneck after erecting a certain number of base stations due to a less-developed network,” says Tsai. He notes that expanding optical networks would be a much more expensive proposition than simply building the base stations.
In 2014, Taiwan set a world record for the speed of adoption of 4G, despite being a bit late to the game (4G networks were first introduced in 2010). Ericsson’s Yao expresses optimism that adoption of 5G in Taiwan will be on par with or faster than that of 4G. “At the beginning of the 4G launch, there was very limited coverage, but the price of that coverage was much higher,” Yao notes. “However, people signed on like crazy. Within half a year, 40% of mobile users had moved over to 4G.”
This experience – coupled with South Korea’s very rapid increase in 5G coverage after the launch of limited networks in April this year – has Yao and others convinced that Taiwan will be able to enjoy widespread 5G connectivity following the launch of national networks in mid-2020.
