The past year saw various significant developments in the telecom and technology space in the Southeast Asian region. There was an increase in the uptake of the Internet of Things (IoT) in 2019 across the region. Governments have come to realise the importance of the technology and are thus taking positive steps to create a favourable ecosystem around it. While IoT was definitely a focus area, the role of smartphone in an increasingly digitised economy also took centre stage. From m-commerce to mobile wallets, the use cases of smartphones have definitely started transcending the traditional boundaries of voice and data services. While this is a global phenomenon, SEA is at the forefront of driving these trends. The talk of the year was definitely 5G and how it will benefit the economies of the SEA region. Industry stakeholders across the region conducted 5G trials, explored spectrum options and launched pilot networks.
A look at key trends that dominated the SEA region in 2019…
Immersing into a more connected ecosystem
Countries across the SEA region are turning to connected solutions enabled by IoT to make business processes as well as cities smarter, safer and more efficient. Countries such as Thailand and Malaysia are already leading the way and have adopted policy frameworks and strategic roadmaps to enhance IoT adoption.
Malaysia, with its robust electronics and semiconductor industries, is poised to become a regional hub for IoT. One of the major initiatives to support the IoT ecosystem is currently taking place in the township of Cyberjaya, where Cyberview is implementing various IoT-based solutions, including a smart traffic management system, public safety monitoring and energy management. The country’s government believes that IoT can help the country boost its innovation competitiveness further. Currently, there are more than 146 IoT-related patents filed by Malaysian inventors and researchers.
IoT is an up-and-emerging concept attracting the attention of industry stakeholders and government alike in Thailand as well. In fact, IoT is central to the country’s 4.0 initiative and will be instrumental in accelerating the digital transformation of the country. Companies like AIS and True Corporation have already rolled out NB-IoT technology across the country. In August 2019, the government issued a white paper on the IoT industry. The paper outlines the framework for an IoT ecosystem and for applications that will guide the development of IoT start-ups and stimulate the digital economy in the country.
Indonesia is another country working actively in the IoT space. According to government sources, the value of the IoT market in Indonesia is expected to reach $30 billion by 2022. Further, it is predicted that in 2025, 70 per cent of the state budget will be supported by industries thathave implemented IoT. Currently, Indonesia’s Ministry of Communications and IT is working on an IoT regulation which will include spectrum allocations for both licensed and unlicensed connectivity networks crucial for the development of IoT.
Singapore’s IoT market is also expected to grow significantly in the coming years, driven by the country’s Smart Nation Project. It lays emphasis on areas such as smart mobility, smart building and environment, smart industry, smart healthcare and smart governance, all of which will be enabled by IoT.
Mobile phones take centre stage
The past few years have seen a dramaticrise in the amount of time spent by people on their mobile phones. According to a MoEngage study, at present, over 90 per cent of SEA’s population connects to the internet through a mobile device. Moreover, the daily time spent on the internet is about 4 hours and 56 minutes per day. As such, SEA is fast emerging as a mobile-first region.
Given the amount of time spent by people on their mobile phones, it is expected to drive SEA’s growing e-commerce market in the near future. In fact, as a study by App Annie suggests, m-commerce has grown to become critical to the future of retail.
Brands across the SEA region are increasingly deploying new-age tech solutions to make their product offering smarter and more user friendly. Brands are increasingly experimenting with augmented reality (AR), virtual reality (VR) and gamification to enhance the shopping experience and drive sales online. According to a recent Worldpay survey of more than 16,000 consumers across eight Asia-Pacific markets, 95 per cent of respondents used VR or AR technology in the past three months. Although most such brands operate in China, a similar trend is expected to be replicated in the SEA region as well.
Going cashless
Smartphones are being used not just to engage in retail and ecommerce activities but also as a tool for conducting cashless transactions. Cash is not king any more in SEA, with a thriving mobile internet economy setting off a wave of cashless transactions. A large proportion of Southeast Asians are now using their smartphones to do banking. According to a recent survey conducted by PwC, Vietnam recorded an increase of 24 per cent in the adoption of mobile payments between 2018 and 2019. This was followed by Thailand, Malaysia, the Philippines and Indonesia at 19 per cent, 17 per cent, 14 per cent and 9 per cent respectively.
Evidently, Vietnam and Thailand are the two leading countries as far as uptake of mobile wallets is concerned. In Vietnam, several payment apps and fintech companies have mushroomed in the market that help users pay bills, send money or make purchases across several payment points throughout the country. According to industry reports, there are about 35 start-ups and platforms providing digital payments in the country. Of the 29 providers of intermediary payment services licensed by the State Bank of Vietnam, 27 offer e-wallet services. Besides industry players, the Vietnamese government too has been consistent in its efforts to give the requisite policy and regulatory push to the mobile money ecosystem in the country. Following on its intent, the government, in January 2019, issued a document asking the central bank to come up with new ways to encourage the use of e-wallets. One such suggestion is to allow people to add money to their wallets without going through a bank account. It also approved a pilot project that enables money transfers and purchases through mobile phone accounts for small transactions. Moreover, as per recent reports, the State Bank of Vietnam is drafting a regulatory sandbox for fintech companies to test new technologies. VNPT and Viettel, two of the country’s major telecom providers, have also been given the green light to explore the deployment of mobile money which can potentially be transferred between mobile users, even those without smartphones.
In Thailand, the government has had a rather big role to play in driving the adoption of digital payments. Implementation of the government’s PromptPay service in early 2017 was a turning point and digital payment transactions in the country have risen since. PromptPay is part of the government’s national e-payment scheme, a project designed to move Thailand towards a cashless society. It is part of the government’s Thailand 4.0 initiative, which seeks to create a value-based economy driven by innovation, technology and creativity. The system assigns ID numbers and/or mobile phone numbers to bank accounts, which are used by transferees (instead of a bank account number) to carry out transactions. As at the end of 2019, PromptPay’s registration numbers had reached 50 million. According to media reports, the platform records an average daily transactions of 8.1 million.
5G has become the new buzzword in SEA’s mobile market. As per industry experts, 5G is expected to provide SEA with industry opportunities worth $1.2 trillion, with the number of 5G subscribers likely to reach 80 million. Among all SEA countries, Singapore seems to be leading the curve in terms of industry preparedness for 5G. Given that the Lion City is already equipped with more advanced 4.5G and narrowband IoT infrastructure, Singapore will be able to develop 5G technologies much before its neighbours; with a potential roll-out of networks by 2020. In an effort to have wider 5G reach, the INMDA recently revised its plan for the allocation of 5G-suitable spectrum. The regulator has said that now all four incumbent operators of the country, instead of the previously decided two, have to start rolling out 5G networks from 2020 and have to ensure that half the city state is covered by a stand-alone network by 2022.
Other countries are also making positive striders towards building a robust ecosystem to welcome 5G as soon as possible. For instance, Malaysia recently collaborated with Huawei to lay out the initial 5G infrastructure in view of the lack of such infrastructure within its boundaries. Likewise, Thailand has also started collaborating closely with China and Huawei to develop test beds and research centres. In fact, Huawei has come up as the common vendor working with almost all SEA countries to conduct trials, and build test beds for the technology.
In Vietnam too, the government as well as telecom operators have been taking steps to put in place the requisite ecosystem that can support the launch of 5G services. In September 2019, the Vietnamese military-owned operator Viettel launched an NB-IoT network covering 100 per cent of Ho Chi Minh City via 1,000 base stations.
In the Philippines, Globe Telecom launched SEA’s first 5G broadband service in June 2019, backed by Huawei equipment. Recently, the Philippines-based NOW Corporation and its affiliate NOW Telecom signed an MoU with South Korea-based SK Telecom to deploy a commercial 5G mobile network in the Philippines.
Indonesian operators have also been upgrading their network to prepare the ground for the launch of 5G services. In July 2019, Telkomsel partnered with Ericsson to upgrade its network in line with the commercial launch of 5G. This will be achieved by deploying Ericsson’s NFVI technology across the operator’s network.
Smaller countries like Myanmar are also not far behind. In August 2019, Mytel successfully conducted 5G tests using Huawei’s 5G new radio equipment with download speeds of 1.6 Gbps. The operator is hoping to launch 5G nationwide in sync with the global timeline of 2020, provided the government auctions 5G spectrum by 2020.
