5G has become the new buzzword in Vietnam’s mobile market. Vietnam is one of the few Southeast Asian countries that is expected to launch its 5G services in line with the global timeline of 2020. To this end, 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 July 2018, Vietnam’s Authority of Radio Frequency Management successfully conducted the country’s first demonstration of 5G technology in partnership with Ericsson. In early 2018, the country’s second biggest mobile service provider, MobiFone, signed an agreement with Samsung Electronics for engineering and commercial co-operation on 4G and 5G networks. Recently, state-owned Vietnam Posts and Telecommunications Group (VNPT) signed a three-year deal worth $15 million with Nokia to develop 5G solutions and technology for the internet of things (IoT).
In their efforts to pave the way for 5G, operators are also modernising their infrastructure by deploying better and more efficient equipment. Further, work is being undertaken to optimise the existing 4G infrastructure to make it ready for 5G services. Once 5G is made commercially available, it will enable the growth and development of various sectors, creating opportunities for different stakeholders.
A look at how the 5G dynamics are unfolding in Vietnam and the opportunities that will follow these developments…
The big 5G opportunity
While 2018 was the year of laying the groundwork for the technology, 2019 is expected to be the year of technology trials. The year has already started off on a great note with Vietnam’s Ministry of Information and Communications (MIC) awarding the country’s first licence to test 5G mobile communication services to Viettel Telecom. The test permit is valid for one year until January 21, 2020, and allows Viettel to test the technology at up to 73 locations in Hanoi and Ho Chi Minh City. Along with the licence, Viettel has been granted access to spectrum in the 2575 MHz-2615 MHz, 3700 MHz-3800 MHz and 26.5 GHz-27.5 GHz frequency bands. Interestingly, Viettel has been working on its 5G plans since 2015, setting aside $40 million to develop its own 5G chipsets. Further, it has already done the groundwork in terms of readying infrastructure like laying an optic fibre cable (OFC) network and setting up base transceiver stations (BTSs). As a result, Viettel has a competitive advantage over other operators because of its nationwide OFC network, which is present even in remote and mountainous areas.
Other operators in the country are also expected to get their 5G trial licences in the coming months. This is in line with the government’s efforts to launch 5G in the country at the same time as its global counterparts.
The introduction of 5G services in Vietnam will create numerous opportunities for various players across sectors. One of the first and direct gainers of the technology will be the operators themselves. The coming of 5G will create a huge upsurge in the amount of data that flows through the mobile networks of the operators, leading to higher revenues. According to Ericsson’s 5G potential trade report, the telecommunication operators in Vietnam can potentially gain an additional $3.17 billion in revenue by using 5G technology to address digitisation issues across industries. The biggest opportunity lies in the manufacturing and energy and utility sectors.
However, in order to make 5G a reality in Vietnam by 2020, requires attracting heavy investment to boost its digital infrastructure. This brings us to the second set of gainers of 5G technology and infrastructure providers. Given that the Vietnamese government wants to develop 5G infrastructure locally in order to bolster economic development throughout the country, there is ample opportunity for domestic players as well.
There also exists considerable opportunity for equipment vendors. The deployment of 2G and 3G services saw Vietnam import BTSs and other equipment from across the globe. It took Vietnam eight years to be ready to launch 4G services. However, for 5G, Vietnam aims to produce the required equipment before it launches the network and this offers significant opportunity to both local and foreign vendors to collaborate with the government and local operators to develop the requisite equipment.
Network optimisation and modernisation
In order to pave the way for 5G, operators have been concentrating their efforts on optimising and modernising existing 4G networks. To this end, various operator-vendor deals have been signed to make them future ready. For instance, VNPT-Net, a subsidiary of VNPT, has partnered with Ericsson to optimise 200 4G golden cluster base stations of the core network in Ho Chi Minh City. Further, VNPT plans to optimise on its own an additional 806 long term evolution base stations with support from Ericsson. As operators are increasingly focusing on network improvements, this offers a great opportunity to technology providers to work with operators to help them drive automation across their networks. Further, a lot of operators, such as the state-run Viettel, had deployed their network infrastructure years ago; these have now become dated and are in urgent need of newer and more efficient equipment which can effectively leverage and adapt to technologies like big data analytics, IoT, artificial intelligence (AI), etc. Operators have already started taking positive steps towards modernising their infrastructure. As per a TowerXchange report, MobiFone is now implementing an optimisation programme in its power system that aims to reduce energy consumption and cost.
New focus areas
The coming of 5G will usher unprecedented growth in the IoT sector and will give a big boost to the development of smart cities in Vietnam. This is because the availability of a 5G network would mean that connected devices could function without facing network disruption. Further, proper functioning of any smart city is dependent on the availability of robust connectivity; otherwise the entire thrust of services such as smart traffic control, smart parking, surveillance, etc., that essentially make a city smart, would cease to exist. Given that 5G will set in motion a series of developments in various sectors that were not possible before, it will create a chain of opportunities for several stakeholders such as infrastructure providers, device manufacturers and technology solution providers. Development in the smart city segment, for instance, offers a decent opportunity to infrastructure providers and tech companies to collaborate with the government to set up the requisite infrastructure and deploy smart solutions. In addition, growth in the connected devices ecosystem will lead to an upsurge in the amount of data traffic that will be generated from these devices. Running analytics on this data is another opportunity that can be leveraged by various players to get better customer insights.
The way forward
5G services are expected to create a revolution in terms of speed and stability for mobile devices. Not just that, unlike its predecessors, 5G will cut across sectors, transforming and significantly expanding the role of the telecommunications sector. The verticalisation of 5G will also enable the adoption of technologies like IoT, AI, and cloud across industries, considerably boosting the size and scale of their markets.
