The coming years will be a busy time for Vietnam’s ICT market, as four of the country’s mobile operators start rolling out 4G networks after receiving licences. Three carriers – state-owned Viettel Group, MobiFone, Vietnam Posts and Telecommunications Group (VNPT) subsidiary Vinaphone – have already started running pilot projects and have installed the infrastructure needed to carry out the services over an 1800-MHz band. GT el Mobile, which operates the Gmobile brand was also given a LTE licence, but unlike its rivals, it has yet to launch trials. The operators will hold the rights to 4G services until the end of the third quarter of 2024. FPT Telecom, part of IT firm FPT, was also granted permission to trial 4G services.
Need For Speed
According to 4G.co.uk, 4G LTE networks can, in theory, reach speeds of 150 Mbps compared to 7.2 Mbps for 3G. Theoretical speeds, however, are those that can be obtained in a laboratory environment with perfect conditions. For real-world speed, local mobile operators are expected to reach up to 75-80% of the theoretical speed.
The introduction of 4G services is expected to generate a spike in new opportunities for investors, especially as the industry has been moving towards digital and data products. “With the trend of convergence of telecoms with IT, content sharing and value-added services are playing increasingly important roles in creating revenues for operators,” Tran Manh Hung, chairman of the member council of VNPT, told OBG. “The transformation to digital services has created many opportunities for investors, such as deploying platforms, cloud computing and big data services.”
Hold The Phone
Smartphone makers have also been gearing up for the roll-out of 4G services, waiting for the right time to introduce new models on the market. Currently out of Vietnam’s 37m 3G subscribers, only 5% have devices, such as phones and handsets, which are compatible with 4G. These are mostly high-end smartphones and some mid-end models. The Vietnam Department of Radio Frequencies has also expressed concern that the infrastructure may not be installed in 2017, and 2018 may be a more realistic target for the widespread use of the network. But the carriers remain confident, as they have carried out successful tests. Furthermore, as the 4G network to be used by the local operators is the most common in the world, the equipment price is not expected to hinder 4G development in Vietnam.
Vinaphone was the first to commercially launch LTE services, with service commencing in Phu Quoc Island in November 2016. The company said it plans to deploy 21,000 base stations in 2017. Viettel is taking a more aggressive approach with a nationwide commercial launch in the first quarter of 2017.
Telecom Asia, a marketing solution provider, noted that in addition to strong LTE coverage, Vietnamese carriers will need to price services correctly if they want to succeed. It cited examples in Europe where despite strong network coverage, some telcos struggled with subscriber numbers due to their premium prices. This is especially pertinent for Vietnam where the majority of the population live on modest means.
Foundations For 5g
Vietnam is a little late in joining the 4G revolution. In Asia LTE has already been one of the most popular technologies and worldwide, the number of 4G LTE subscribers amounted to 1.3bn in the first quarter of 2016, with an additional 2m subscribers added each day on average, according to the Global Mobile Suppliers Association. However, it is important that Vietnam puts the network in place, as it will serve as a foundation for the introduction of 5G, which is expected to be operational by 2020.
This next generation of technology will bring data speeds 50-100 times faster than 4G LTE networks, but most importantly, it will lead to a proliferation of the internet of things where everyday objects will have network connectivity – a truly radical step in the relations between the physical and digital worlds.