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Vietnam making way for local 5G-ready products

Local smartphone makers are planning to launch their 5G devices this year. They have been exploring new designs and creations for some time now and the last few months have been the culmination of these efforts.

The main market of such products is likely to continue to be outside Vietnam and currently, products are mainly exported to Myanmar. None the less, strong efforts are being planned to penetrate other regional markets soon. In Vietnam, the market share of such devices remains relatively small when compared to international players. According to data published last November by GfK, Germany’s largest market research institute, local device presence has almost evaporated from the list of leading smartphones brands in Vietnam. GfK’s data also show that overseas players control nearly 80% of the local market share.

Recognising the issue, the Ministry of Information and Communications (MIC) last December issued Circular No.43/2020/TT-BTTTT outlining national technical criteria for terminal equipment. The production and import of phones using 2G and 3G technology will stop from the beginning of July, according to the new circular. The national technical regulations on terrestrial mobile communication equipment mandate all mobile phones manufactured or imported into Vietnam must use evolved universal terrestrial radio access (E-UTRA) or 4G technology.

This means all mobile devices with simply 2G, 3G, or combined technology will not be produced and imported into the country. The ministry notes that phones that were produced and imported before July will still be allowed to be sold. According to the regulation, 2G and 3G devices will not be allowed to be imported to Vietnam. Mobile phones manufactured or imported from other markets will have to integrate E-UTRA or 4G technology. The circular is applied to Vietnamese individuals, organisations, and also overseas organisations that have mobile manufacturing activities in Vietnam.

The overall goal of the legislation is to accelerate the use of 4G and 5G technologies and thereafter popularise smartphone usage by 2025 to comply with the National Digital Transformation Programme with a vision to 2030. The circular is considered a step towards turning off 2G in the first quarter of 2022 as well as a part of the programme to universalise smartphones. Previously, Hoang Minh Cuong, Director of the Telecommunications Department under MIC, said that the production of phones with 2G technology had decreased significantly. The number of phones fell by 6-7 million units from the end of 2019 to the end of the third quarter of 2020.

A representative of a global mobile device company said such regulations that allow 5G to be easily deployable are an essential precondition to kick-start the Fourth Industrial Revolution. “The Vietnamese government is strongly supporting the deployment of new technologies, especially 5G, and is promoting Industry 4.0 use-cases and trials. Accelerated investments in 5G infrastructure and 5G-ready policy frameworks are critical priorities to reap the benefits of digitalisation.”

He went on to accede that to enable a high adoption rate, regulators should ensure that a sufficient and affordable spectrum of devices should be made readily and easily available in the market as soon as feasible.

According to a community programme manager at another technology developer, the primary issue to focus on is the interest of consumers. “Although we already have low-cost 4G phones, their recognition has been largely limited. Businesses should constantly research market demand before deciding to offer any products to consumers,” he said.

While pundits and experts feel that the high-end smartphone market is led by well-known brands and it will be hard to penetrate for newcomers, the nation is keen to ensure this happens. The MIC is stimulating the use of low-cost smartphones produced in Vietnam. As such, local telecom companies and smartphone makers have jointly launched pilots that support mobile phone subscribers to shift from 2G phones to 4G smartphones. Last year, local manufacturers offered 4G mobiles worth VND600,000 ($26) in the market.

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