How is Vietnam preparing for 5G?

Ericsson predicted earlier in the year that Vietnam will be using 5G in one or two years, however the country is still working on having a full 4G implementation. Here we examine the current state of state of 4G in the country and if 5G can happen soon.

Cristina Lago Oct 03rd 2018
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This summer brought some encouraging news for Vietnam regarding the adoption of fifth generation mobile networks, commonly known as 5G.

During a press conference on the acceleration of 5G tech and the digitalisation of industry last July in Hanoi, Denis Brunetti, President of Ericsson Vietnam, Myanmar, Cambodia and Laos, affirmed that 5G will be in place in the Southeast Asian country in just one or two years.

Considering that no country has launched 5G yet, Brunetti’s words can be perceived as uber-optimistic by some.

“We are confident that the pioneers of the 5G path will have a competitive advantage in the global marketplace as their multidisciplinary digital transition is accelerating,” he said. “5G's most profitable industries are those that can take advantage of high-speed, low latency, and extreme 5G reliability to increase efficiency, improve quality and safety, or create innovative products or services.”

According to the executive, Vietnam’s manufacturing, energy and utilities sectors will hold the largest potential for 5G implementation.

Having the back of the Swedish multinational networking and telecommunications company is certainly reassuring. But are Vietnam’s infrastructure and conditions ready for the implementation of 5G in such a short period of time?

The current state of 4G in Vietnam

Although the deployment of 4G around the world began in 2009, it wasn’t until 2016 that the Vietnamese government issued licenses in the 1800-MHz and 2600-MHz to mobile network operators VNPT, Viettel, Mobifone, Vietnamobile and Gtel.

Vietnam’s advanced mobile networks reach about 96% of the population, providing 51.2 million users with 3G coverage and 13 million with 4G.

According to OpenSignal’s 2018 State of the LTE report, 4G availability in Vietnam accounts for 71.26%, placing it behind neighbouring Thailand, Singapore, Malaysia, Brunei and Indonesia. Unsurprisingly, most of 4G data users are located in urban areas, whether cities or medium-sized towns.

When it comes to speed, Vietnam’s 21.49 Mbps performs better than the US, and second only to Singapore in the ASEAN region, which has the highest speed worldwide.

However, data traffic for 4G network on broadband 1800 MHz has been low compared with demand, affecting speed. This had led the Ministry of Information and Communications (MIC) to plan to auction the 2.6 GHz band so telecom services providers can boost the speed of their 4G network.

Deputy Minister of Planning and Investment Vu Dai Thang said at a MIC meeting that the losses of businesses and society for the slow implementation of 4G network were bigger than the state budget collection from licencing.

Vietnam is not the only country experiencing problems with a full implementation of 4G. Other world regions, including Europe and Latin America, saw a dropping in revenues after 4G’s introduction despite heavy investments on its infrastructure.

Even though all of the above, the MIC is keen on developing the broadband infrastructure to complete the 4G network and begin work on 5G as early as possible to enhance the performance of the Internet of Things (IoT), something that could significantly improve Vietnam’s citizens lives and economy, as well as fully integrating in the Fourth Industrial Revolution (Industry 4.0).

How can Vietnam benefit from 5G?

5G comes with the promise of new possibilities that will have a major impact on human lives and through a stronger digital connectivity infrastructure, transform industry and they way we work and interconnect.

Not only that, 5G will be the fundamental platform from which Industry 4.0 will operate, enabling large-scale Internet of Things (IoT) and enhance performance of other technologies.

In order for transactions to be completed in the speed set out in the 5G technical specifications, countries deploying 5G need to be blanketed with mobile sites - a step which required billions of dollars of investment but that can’t guarantee a generation of return on investment.

Up to this day, South Korea, China, Japan and the US have entered the race of countries working to launch 5G and are the most active in testing its technology.

Two service providers in South Korea are competing to be first to market with a 5G network. SK Telecom has acquired spectrum in the 3.5 GHz and 28 GHz frequencies in anticipation of deploying 5G. Meanwhile, Korea Telecom made a splash in early 2017 with its announcement that it would roll out a trial 5G network ahead of the 2018 Winter Olympics in Seoul.

Vietnam too could experience great benefits from adopting 5G.

Because of the impact that 5G will have on the IoT, smart city solutions provide the highest potential sector for the country if the fifth generation of cellular mobile communications is implemented.

This could also extend to other sectors like agriculture, ecommerce, healthcare and manufacturing.

5G also offers massive improvements to wearables, smart homes and machine to machine (M2M), placing itself as a remedy for industrial connectivity woes, rather than to the consumer exclusively.

For example, 5G networks could offer manufacturers and telecom operators the chance to build smart factories and take advantage of technologies such as artificial intelligence (AI), remote control of robots, automation and augmented reality (AR) for troubleshooting.

However, for 5G to become a reality in Vietnam by 2020, the government needs to focus some considerable efforts on its digital infrastructure and attract heavy investment.

Brunetti's optimistic remarks about the implementation of 5G in the country were also complemented by an invitation to those responsible to make it happen to be collaborative on its approach.

“This change", Brunetti said about Vietnam's 5G adoption within the next couple of years, "will only take place when authorities and industry leaders strive to reach agreement on the appropriate spectrum, standards and technologies.”