October 31, 2020

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Vietnam’s 5G rollout plan

Vietnam has created an “ambitious plan” to become one of the first countries to pilot 5G, called the ‘highway of the digital economy’, an official press release says.

According to the Minister of Information and Communication (MIC), Nguyen Manh Hung, 5G will change many vertical industries. These include smart factories and cities and the transportation, healthcare, and agricultural sectors.

5G will also develop a new industry that produces billions of devices and will also activate innovation in almost every industry, creating unlimited connectivity for all.

Results from the implementation of the first official connection on Viettel’s 5G network (set up earlier this year) showed that the actual data transfer rate reached 1.5-1.7 gigabyte per second (Gb/s), far exceeding the theoretical speed limit of the 4G LTE network, and equivalent to the speed of the commercial cable network at present. This is an important premise towards the commercialisation of the technology in 2020.

According to European telecommunication suppliers, the upgrading of 4G network and deployment of 5G may make the capital cost increase by 60% for 2020-2025.

With heavy investment in 3G and 4G, the revenue from data service of the country’s three biggest mobile networks operators just accounts for less than 30% of total mobile service revenue.

The release said that the data output of state-run VinaPhone has increased by twofold, but the revenue only accounts for 24% of mobile service revenue. As for MobiFone and Viettel, the revenue from data accounts for 27%.

The deputy CEO of state-run Viettel, the country’s largest mobile network operator, said its trial will provide information to Viettel about bandwidth, coverage area, and applications before it begins commercialisation in 2020.

The government’s Vietnam Posts and Telecommunications Group (VNPT) plans to pilot 5G from September 2019 to May 2020.

It is estimated that there are 13 million mobile subscribers with data connection, which accounts for 30% of total mobile subscribers. Data connection is used primarily for entertainment, especially social networks.

Subscribers use smart apps such as e-hailing, shopping, and booking, demand for which can be satisfied with 3G and 4G networks. Therefore, analysts say to run 5G successfully, there should be associated apps like self-propelled vehicles, remote surgery or IoT. In Vietnam, the demand for these remains modest.

Some people believe that the deployment of 5G is not necessary. 4G is described as a ‘technology demonstration’, rather than commercial exploitation. However, policymakers decided to develop 5G in Vietnam for strategic digital economy development, the release noted.

5G is not just an upgraded version from old technologies but is a revolution for connection services, MIC stated earlier. Therefore, the implementation strategy of this new technology will not be similar to that for 4G previously (simultaneously implemented nationwide). Instead, it will first prioritise the areas with high usage or the locations in need of replacing the cable network.

Industry experts estimate that Vietnam’s digital economy, which was valued at US$3 billion in 2015 and US $9 billion in 2018, will be US $30 billion by 2025.