How will 5G affect businesses in Southeast Asia?

Enterprises using 4G mobile networks to connect large numbers of interet of things (IoT) devices will be the first to benefit from the arrival of 5G networks, predicts AT Kearney. Applications such as the remote monitoring of production assets in manufacturing, tracking material and products in the logistics sector, and monitoring livestock or production in agriculture will profit from 5G’s faster speed and lower latency.

If your business uses remote robotics or assistive robots in manufacturing, collaborative robots in retail, or autonomous drones in service industries then you too could profit from an early switch—if your local network provider is ready.

Singapore, which is presently leading 5G development in the region, is not the only country in Southeast Asia pursuing 5G at scale. In April 2019, Cambodia’s telecoms regulator announced that it had signed a deal with Chinese firm Huawei to deploy 5G infrastructure in the country by 2020.

Cambodia’s move came amid a growing escalation of trade tensions between China and the US, when President Donald Trump issued an executive order that bars the use of telecommunications equipment made by companies that are deemed a “threat to national security”—including Huawei.

While the trade war between the world’s two biggest economies goes on, the roll-out of 5G across Southeast Asia is accelerating. 5G’s lower latency, and the possibility of using network slicing or private base stations to guarantee capacity and security for industrial applications, could in turn speed the development of the region’s digital economy.

Champions of the superfast network are promising increased data speeds that will not only change how people interact with the internet but can boost self-driving car initiatives and improve everything from healthcare to tourism.

What seems clear is that a growing IoT market is fuelling the need for a low-latency 5G network, as the current 4G network will not be able to cope with the huge demands brought about by a growth in machine-to-machine communications.

Here we examine what impact 5G is set to have on businesses across Southeast Asia.

Is Southeast Asia ready for 5G?

With population growth and increased mobile penetration, capacity is one the most prominent advantages being touted for fifth-generation mobile networks.

As we continue to consume and create more data, stream music, stream video, and play games online, existing spectrum bands are going to struggle to cope and congested areas will frequently experience a poor-quality service.

On the other hand, rural communities are unlikely to see all of the benefits in the near future. The high-frequency bands available to 5G networks offer increased capacity but their range is shorter, so more base stations are required to cover a given area, making the technology less economical in sparsely populated areas.

“Regulators will need provide more license exempts and shared spectrum to lower the cost of spectrum access”, said Kalpak Gude, president of the Dynamic Spectrum Alliance. “Carrier technologies have generally not been well suited to deploying in rural areas or areas with less dense populations. Higher frequency bands will make this even more difficult.”

However, the digital economy in Southeast Asia is on the rise and cross-country bandwidth in the region has seen a 45-fold increase since 2005. According to Anthony Ho, Director of Regional Product Management at Equinix, “interconnection—the private data exchange between businesses—plays a critical role in the 5G revolution as well. … Interconnection bandwidth in Asia-Pacific is expected to grow 46% per annum to reach 1,120 Tbps of installed capacity, approaching nearly a quarter (22 percent) of global traffic.”

What’s the state of 5G throughout ASEAN?

In the ASEAN region, Singapore is expected to lead the way in launching 5G in 2020, followed by Vietnam, the Philippines, Malaysia, and Thailand, according to research by AT Kearney. (See CIO ASEAN’s updated “The state of 5G in Southeast Asia” report for the current 5G status in Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Papua New Guinea, the Philippines, Singapore, Thailand, Timor-Leste, and Vietnam.)

Huawei has notably been working with local telecommunications companies in the Philippines and Vietnam to help strengthen their networks to be ready for a roll-out in 2020.

Most recently, the Vietnamese government awarded the country’s first trial 5G licence to its largest telecommunications company, Viettel. The company is expected to work in conjunction with Ericsson and Nokia, deploying technologies from the two organisations and using base stations manufactured in Vietnam in order to boost economic development.

The trials are expected to run until 2020 throughout Hanoi and Ho Chi Minh City, although Viettel will not be able to generate any revenue from the project until the pilot is over.

These opportunities aren’t all hypothetical, however. Singapore’s minister for communications, S Iswaran, confirmed in March that the city-state will roll out 5G by 2020.

Singapore’s three incumbent network operators—Singtel, StarHub, and M1—have all started 5G trials with industry partners, including a 5G pilot network in the One North district, by Singtel and Ericsson.

Thailand is also seeking to pioneer the deployment of 5G and aims to start commercial 5G service next year.

Indonesia launched trials for its own 5G network in Jakarta and Palembang during the 2018 Asian Games. The South Korean telecoms company KT used the event to showcase its current 5G capabilities before it launches in commercial service in its home country later this year.

Those watching the games in Indonesia were able to experience a number of different sport-related VR activities, ride in autonomous vehicles, and use tablets all powered by 5G technology.

Malaysia has started running tests with various technology partners, although the network won’t be commercially available until 2020.

Do the use cases exist in Southeast Asia?

Like the rest of the globe, ASEAN countries are looking to leverage 5G effectively and innovatively. “Some industries within the region will start to see a definite advantage,” says R Ezhirpavai, the vice president of technology at Aricent.

“For example, agriculture. Large plantations in Indonesia are using 5G drones to collect information on soil conditions and moisture levels. The drone captures images of agricultural land to get details of the plantation, soil, and weather and sends high resolution images over 5G for analysis—all in real time.”

The same technology also has a number of public safety use cases. Traffic monitoring and crowd control are two examples that have already been trialled, with drones offering pinpoint positioning and a sustained viewing platform that can assess and monitor situations long before the arrival of ground patrols.

Small businesses and startups are also set to capitalise on the opportunities brought about by 5G to generate business growth and support digital transformation initiatives.

Furthermore, Ho explains that “while the technologies needed for smart cities already exist, the capacity for the technologies to operate in real-time across an interconnected network has mostly been contained and restricted by current network standards.”

5G will therefore help with the future development of smart cities, supporting applications that will enhance the lives of citizens by bringing about greater efficiency to a large number of vital services.

However, as every country in Southeast Asia has a different expected deployment date, there are different requirements for each country in the region. The consumer smartphone market is still growing and as it becomes more saturated, it will impact on the way 5G is implemented and the problems it is used to solve.

One such example can be seen with IoT. The IoT market is yet to fully mature in the ASEAN bloc, but Ezhirpavai says that because of 5G “a number of local businesses are already looking at using large-scale IoT devices. … Some Southeast Asian countries are also looking at 5G for production-line verification and the real-time analysis of sensors within enterprise IoT. In this instance, 5G can be delivered over mid-bands. These can cover larger areas with higher bandwidths for spectrum to achieve higher throughput.”

Still, the majority of countries looking to deploy 5G within the next two to three years are still unable to supply adequate 4G services to their citizens.

Ultimately, when it comes to 5G, Gude made it clear that Southeast Asia has the same possibilities and challenges as the rest of the world.

However, in a region that has both densely populated cities and large, rural expanses, governments and networking companies need to ensure that the necessary infrastructure is made available not only to mobile carriers but also to small rural providers, community connectivity organisations, building owners, factory owners, and schools. Only then will CIOs be able to prepare their organisations for the transformative potential of 5G technology.

Additional reporting by Cristina Lago