5G network inches ever closer

April 09, 2024 | 08:43
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Investment returns may be some way off for telecoms groups, despite taking on ownership of 5G frequency bands via auction.
5G network inches ever closer
Viettel picked up the rights to use the 2500-2600 MHz frequency band for the next 15 years, photo Le Toan

Viettel and Vietnam Posts and Telecommunications Group (VNPT) are now waiting for a licence after they succeeded in Vietnam’s 5G frequency band auction, after which they will be tasked to provide services within 12 months.

Senior telecoms expert Tran Tuan Anh told VIR, “This will open up opportunities for network operators to commercialise 5G, and for international 5G network leaders to join.”

However, they might face challenges in attaining return on investment as 5G infrastructure is quite different from 3G and 4G, Tuan Anh added. “The return will depend on the number of users. Meanwhile, not all smartphones can access 5G.”

According to expert Tien Hoang, given the characteristics of a developing country like Vietnam, the demand for 4G services will still be high in the near future.

Therefore, a dual-use band like B1 can help to create immediate effectiveness, and then the network operator can also flexibly switch from 4G to the 5G setup in each area.

As for users, they will be able to benefit as soon as the frequency is put into use, helping to increase the quality of 4G network service and deploy 5G.

“Many customers do not have the need to use 5G soon, while the demand for 4G is still high. If calculating the cost of the frequency band per subscriber, Viettel has an advantage when exploiting this band,” Hoang noted.

VNPT and Viettel won the 5G frequency band auctions in March. Specifically, Viettel won to use radio frequency for the 2500-2600 MHz band within the next 15 years with the starting auction price of around $166.6 million. VNPT won the auction for the 3700-3800 MHz band with a cost of $81.25 million.

The Viettel band is planned by the Ministry of Information and Communications (MIC) to deploy mobile information systems in line with 5G and 4G standards and subsequent technologies. Currently, 5G devices researched and produced by Viettel are ready to be deployed on the band. The network operator is expected to launch a nationwide 5G network as soon as possible.

This is considered a particularly important factor for Viettel to simultaneously deploy both 4G and 5G mobile networks. Meanwhile, VNPT plans to exploit a combination of the newly auctioned frequency band with its existing frequency band of 1,800 MHz.

“To enhance the effectiveness of 5G deployment, VNPT will deploy an infrastructure sharing cooperation model with the winning network operator of the 3800-3900 MHz band in the upcoming re-auction,” said a representative of VNPT.

In January, the MIC also approved the auction for the 3800-3900 MHz band, which has not yet been picked up.

In 2024, the MIC aims to develop Vietnam’s digital infrastructure with mega capacity, super-wide bandwidth, and in a green, smart, and open manner. The infrastructure must be prioritised for investment and modernisation to promote national digital transformation and digital economic development.

Deputy Minister of Information and Communications Nguyen Huy Dung said, “The auction marked a historical milestone, as this was the first time it was implemented under the new regulations. It is important for the industry and we expect to open a new era for 5G.”

Thus far, the MIC has worked with ministries and agencies on perfecting auctions for the rights to use radio frequencies, such as amending by the Law on Radio Frequency and related guidelines.

Vietnam’s information and communications infrastructure planning for this decade sets a target of having a minimum average download speed of 100 Mbps for 5G networks by next year. By 2030, 5G networks will cover 99 per cent of the population.

According to some experts, the auction will also open up opportunities for international 5G network leaders like Ericsson, Nokia, and Huawei, which have been seeking to boost footprint in the country.

“In the auction ahead, Huawei will have more advantage than other rivals because its products are often cheaper. Meanwhile, Ericsson has advantage in product quality and other aspects. The race is still ahead and anything can happen,” one industry insider told VIR.

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