4G Development: Dilemma of Roadmap and Investment Cost

4G LTE development plays a key role in the era of the internet of things (IoT) in the world in general and in Vietnam in particular. According to reports by the Global Mobile Suppliers Association (GSA), 4G LTE subscribers reached 1.29 billion at the end of the first quarter of 2016 and an average of 2 million subscribers were activated by mobile networks a day. Currently, the world has 503 4G LTE commercial networks in 167 countries as of May 2016 (according to GSA). These figures show that 4G LTE deployment has reached maturity. This is the right time for Vietnam to deploy 4G.

 

In Vietnam, the Ministry of Information and Communications affirmed that 2016 is the right time to bring the new 4G LTE technology to the market. Deputy Minister of Information and Communications Phan Tam said, "2016 will be the good starting year for LTE and 2017 will be a strong-growth year."

 

Speaking at the meeting that reviewed performances in the first six months and previewed activities in the last six months of 2016 of the Ministry of Information and Communications, Minister Truong Minh Tuan said that the Government advocated quickly licensing 4G deployment and the licensing is expected to take place in late September or early October. He said, after carriers report on results in their pilot periods, the ministry will coordinate with them to assess other factors such as actual quality and interference degree. Then, the ministry will process their applications for 4G official deployment.

 

This information was also shared by Director General of Vietnam Telecommunications Authority, Nguyen Duc Trung, at a July and August briefing meeting of the ministry a few days ago. Accordingly, the Vietnam Telecommunications Authority has notified network carriers in writing of 4G network licensing and urged them to quickly prepare documents for licence.

 

According to experts, the 4G deployment will undergo many different stages. Initially, carriers can cover big cities before expanding their coverage nationwide.

 

So far, three major telecom firms, namely Vietnam Posts and Telecommunications Group (VNPT), Vietnam Military Telecommunications Group (Viettel) and MobiFone Corporation have basically completed testing 4G services in Ba Ria - Vung Tau, Kien Giang, HCM City, Hanoi and Danang. Many people have swapped to 4G SIM cards to use new services.

 

The late or early deployment of 4G LTE has certain upside and downside. Dr Mai Liem Truc, former Deputy Minister of Posts and Telecommunications (now the Ministry of Information and Communications), said that the late deployment of 4G networks has certain advantages and disadvantages. In particular, the upside is Vietnam can offer cheaper rates.

 

Sharing the same view, Mr Mantosh Malhotra, Regional Head of Southeast Asia, Qualcomm Technologies Inc., stated that Vietnam cannot deploy 4G early but it can quickly bring it to many users because prices of terminals are cheaper and technologies are newer.

 

He said although some are concerned about Vietnam's later 4G deployment than other markets, this is not necessarily a disadvantage because the current mobile ecosystem is enough to expand the coverage and application. Currently, users need and expect high broadband to run new applications. So, the first challenge is users have great expectations and network operators must meet those demands.

 

According to experts, investment costs for 4G technology are very reasonable. If operators make reasonable investment, the overall cost is smaller than 3G deployment. Vietnamese operators are now running both 3G and 4G infrastructures and they need to optimise their systems for best business results.

 

Another advantage for latecomers like Vietnam is terminals and rapidly deploying ecosystems. For the time being, many 4G-enabled devices are affordable. A mobile device with 4G connectivity is priced US$100 or even lower, the rate that most users can afford. Some device distributors said that all products they sell in Vietnam will have 4G connectivity.

 

In fact, many countries that launched 4G networks before Vietnam but they have not been able to cover nationwide. Meanwhile, Vietnam can leapfrog with a complete ecosystem now.