During the year 2020, the Southeast Asian (SEA) region saw significant developments in the telecom and technology space. There was an increase in narrowband internet of things (NB-IoT) deployment in 2020 across the region. However, to address the security threat emerging from the massive scale of devices that can be connected to the NB-IoT network, stakeholders also took steps to create a favourable ecosystem around it. Governments across regions started evaluating their data privacy regulatory frameworks to explore means to better regulate tech giants. Further, tower companies and mobile network operators (MNOs) across the region took several initiatives to build resilient infrastructure, aided by reforms in the telecom sector. The talk of the year was definitely 5G and how it will benefit economies in 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 2020…

More connected ecosystem with NB-IoT

Countries across the SEA region are turning to connected solutions enabled by NB-IoT to make business processes as well as cities smarter, safer and more efficient. During the year 2020, countries such as Malaysia and Indonesia adopted various strategic road maps to strengthen their NB-IoT network coverage. Singapore came out as the fast emerging epicentre and hub for  internet of things (IoT) technology in the SEA region. According to data from Analysys Mason, total IoT revenue in Singapore is projected to be $714 million in 2025.

Sigfox Indonesia’s “0G” Sigfox-based IoT network was officially launched in February 2020. The network is being rolled out in phases. As part of Phase 1, the Sigfox network was being made available in the Greater Jakarta area and Bandung.

Further, Malaysia was also quite active in the NB-IoT space. In January 2020, Maxis entered into a partnership with the Sarawak Multimedia Authority (SMA) for collaboration on NB-IoT. This deal had three focus areas – co-developing expertise on proven applications of IoT (including NB-IoT) concepts, partnering on the design, development and implementation of IoT/NB-IoT solutions and developing a strong ecosystem via lab set-up support, with specialist support resources to build sustainable and smart solutions.

Strengthening infrastructure

Increase in data demand and a populated MNO landscape fuelled the growth in SEA’s telecom infrastructure market. Owing to this, the SEA telecom infrastructure landscape opened up plenty of opportunities for tower companies and telecom operators.

In a major development in June 2020, the Department of Information and Communication Technology (DICT), Philippines, issued the long-awaited Policy Guidelines on the Co-Location and Sharing of Passive Telecommunications Tower Infrastructure for Macro Sell Sites (PTTI Policy), which was initially set for release in January of 2019. The PTTI Policy intends to govern the co-location and sharing of PTTIs by tower companies and operators to extend coverage to remote areas and reduce the cost of information and communication technology infrastructure deployment in the country. The year proved to be a landmark one for Dito Telecommunity’s growth, which received its licence in 2019. Dito’s telecom tower count stood at nearly 1,900, in December 2020, claiming a population coverage of over 37 per cent. The company announced targets of 70 per cent coverage by 2023 and plans to exceed 90 per cent coverage by 2025.

In Cambodia, leading operators Cellcard, Smart Axiata and Metfone expanded the reach of their long-term evolution and 4G services. Furthermore, with the establishment of Chinese-backed MNOs Seatel, Kingtel and Cootel, competition has intensified, which is set to drive new deployments in the telecom infrastructure landscape. Market experts expect 200-300 new towers to be built in Cambodia per year during 2021.

Indonesia has one of the most mature tower markets in the world, with high tenancy ratios and strong market caps. During the year, MNOs monetised their assets to release financial pressure as well as to gear up for 5G investments. In February 2020, XL Axiata, a subsidiary of Malaysia-based Axiata Group, divested tower assets worth $296 million to local tower companies Protelindo and Centratama Menara Indonesia (CMI), to help lower debt. Protelindo will acquire 1,728 of XL’s towers and CMI 1,050. Further, the new 4G roll-outs planned by Indosat Ooredoo and Hutch are also driving the demand for new sites and co-locations.

Further, the Malaysian government stayed focused on 5G deployment. To this end, it created a 5G task force to support the transition and help the industry with its roll-out. To push 5G deployment, MNOs also built new sites and fiberised their towers. As per industry estimates, an additional 8,000 sites may be required in Malaysia to cater to the existing 4G network and future 5G deployment.

Securing networks with stringent data check

SEA countries are gradually catching up with the Western world to establish a stringent and effective regulatory and policy environment for data protection and privacy. For instance, Malaysia is in the midst of reviewing its Personal Data Protection Act, 2010 to ensure that it is in sync with the General Data Protection Regulation (GDPR). Likewise, in the Philippines, the government is working towards enhancing its Data Privacy Act, 2012, to include rules and regulations mirroring GDPR guidelines. Singapore’s Personal Data Protection Act, 2012 mirrors many GDPR principles such as the need for customer consent for all communications regarding data collection, data processing or disclosure of data.

Several SEA nations also came out with regulations in 2020 that lay down the monetary obligation for digital service providers while selling to their citizens. For instance, the Philippines government proposed the Digital Economy Taxation bill that seeks to better capture value created by the digital economy and have tech giants like Netflix, Google, Facebook and Lazada pay their fair share. Similarly, Thailand, in June 2020, approved a draft bill requiring foreign digital service providers to pay VAT. Indonesia too, in May 2020, announced plans to introduce a 10 per cent VAT on digital services delivered by foreign companies. This came into effect on August 1, 2020.

However, the development of a data protection regime has not been uniform across SEA countries. While Singapore, Malaysia, the Philippines and Thailand have personal data protection laws in place, Indonesia emphasises the need for a general data protection law. The remaining countries in the region do not even have an overarching regulatory framework for data protection.

The 5G wave

5G has emerged as the new focus area for telecom operators and governments in the SEA region. According to a report by AT Kearney, 5G promises to fuel the next wave of growth in SEA and operators in this region have an annual unconstrained additional revenue potential of $4.5 billion to $6 billion by 2025.

In 2020, countries across the SEA region undertook a series of trials and pilots to test 5G technology. Singapore was at the forefront of the 5G revolution in the SEA region. In October 2020, SingTel announced the deployment of its 5G stand-alone trial network, which utilises 3500 MHz spectrum. A month prior to this, M1 had announced the switching on of its 5G non-stand-alone (NSA) network for existing and new users. Likewise, StarHub is also carrying out its NSA 5G trial, which is expected to conclude in February 2021, using 2100 MHz spectrum. These trials took place on the back of the spectrum awards announced by the Infocomm Media Development Authority (IMDA) in June 2020. Earlier in 2020, the IMDA had assigned 100 MHz of 3.5 GHz spectrum along with 800 MHz of mmWave spectrum each to SingTel and the consortium formed by StarHub and M1. Apart from these three players, TPG Telecom was awarded the remaining 26 GHz/28 GHz spectrum in the mmWave band to roll out 5G networks on a localised basis.

Further, various telecom operators in Vietnam such as Viettel, FPT and Vingroup announced that they are working towards developing domestically produced 5G chipsets, which can be deployed across their networks. In July 2020, Viettel launched its domestically manufactured 5G base tranceiver stations (BTSs) and announced that it was going to pilot its commercial 5G coverage by deploying these BTSs across the network. The telco said that by June 2021, it will deploy 5G microcells across its entire network.

During the year, Malaysia remained the hotbed of key 5G debates as far as spectrum allocation is concerned. In May 2020, Malaysia’s Ministry of Communications and Multimedia directed the Malaysian Communications and Multimedia Commission to allocate  700 MHz spectrum to five selected operators – Altel Communications, Celcom Axiata, Digi, Maxis, and Telekom Malaysia. Following these developments, the government decided to drop the 5G spectrum allocation plan for some time. This development coincided with the launch of the Jendela Plan in the country in August 2020, which focuses on expanding existing 4G coverage and increasing mobile broadband speed. Consequently, the deployment of 5G technology in Malaysia got shifted to early 2023.