How will 5G impact industries in Southeast Asia?

Do use cases exist within the ASEAN region to justify the 5G hype?

5G mobile wireless network

On 25 April, Cambodia’s telecoms regulator announced that it had signed a deal with Chinese firm Huawei to deploy 5G infrastructure in the country by 2020, placing it at the forefront of ASEAN nations to do so.

The move comes amid a growing escalation of trade tensions between China and the US, with President Donald Trump this issuing this week an executive order that bars the use of telecommunications equipment made by companies that are deemed a “threat to national security” - including Huawei.

Whether for good or for bad, the trade war between the world’s two biggest economies seems to be accelerating the roll-out of 5G across Southeast Asia. This in turn can set the ground for a more expedite transition to the Fourth Industrial Revolution (Industry 4.0) and 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 help to connect rural communities, boost self-driving car initiatives and improve everything from healthcare to tourism.

What seems clear is that a growing internet of things (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 industries across Southeast Asia.

Will 5G change the world?

With population growth and increased mobile penetration, capacity is one the most prominent use cases being touted for 5G.

As we continue to consume and create more data, stream music, 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 opposite end of the 5G spectrum, despite the advantages of the new superfast network, less densely populated rural communities are unlikely to see any of the benefits in the near-future. The high-frequency bands the network operates on might have an increased capacity but currently, they are only able to cover shorter distances.

Furthermore, there is a high cost associated with 5G deployment, meaning that without government subsidies, remote areas will be reliant on network operators to provide the necessary infrastructure.

“Regulators will need provide more license exempts and shared spectrum to lower the cost of spectrum access.” Kalpak Gude, President of the Dynamic Spectrum Alliance, explains. “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%) of global traffic.”

What’s the state of 5G throughout ASEAN?

Since 2019 kicked off, there has been a few announcements from ASEAN countries regarding an imminent deployment of 5G technology, as the above news from Cambodia show.

Brunei, the country with the greatest mobile penetration in the region doesn’t expect to see 5G before 2021. 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.” R. Ezhirpavai, the Vice President of Technology at Aricent, told CIO ASEAN.

“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, 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.

SME’s and startups, both of which are prolific in the region, 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 however, Ezhirpavai explains 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.”

However, although 5G is one of the core tenets of the Industry 4.0, 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.

As of 2018, major cities including Kuala Lumpur, Manila, Bangkok, Phnom Penh and Jakarta all have 4G mobile download speeds which rank below the global average, with users in Yangon and Ho Chi Minh reporting a decrease in connection speeds as more people connect to 4G networks.

Ultimately, when it comes to 5G, Gude makes 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 telecom companies need to ensure that the necessary infrastructure is made available to not only mobile carriers but small rural providers, community connectivity organisations, building owners, factory owners and schools. Only then can 5G become a reality.

Additional reporting by Cristina Lago

Copyright © 2019 IDG Communications, Inc.

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