Hanoi (VNS/VNA) -Experts forecast despite being relatively new in Vietnam, network sharingefforts would accelerate as the Government seeks to streamline networkdeployments and slash capital spending.
Vietnam’s four State-ownedmobile operators – Viettel, Vinaphone, GMobile and MobiFone – this month agreedto share about 1,200 base transceiver stations (BTS). This follows a dealstruck in May between Vinaphone and MobiFone, which agreed to shareinfrastructure for 700 new BTSs.
Network sharing is still arelatively new concept in the Vietnam telecom market. Operators havelargely pursued synchronous deployments of their networks, which has led to asignificant duplication of infrastructure. The trend is especially pronouncedin densely-populated urban areas, where the rapid construction of mobile mastshas also led to safety and environmental concerns from the Government.
The Ministry of Information andCommunications (MIC) late last year published Directive No 52/CT-BTTTT, whichhighlighted the need for fixed and mobile operators to coordinate networkconstruction and develop plans to share infrastructure. The sharing of BTSswill also allow operators to save on capital expenditure associated withnew construction, which the MIC estimates to be roughly 1 billion VND (43,000USD) per BTS.
According to experts from FitchSolutions, in the 5G era, where networks require a significantly higher numberof BTSs to operate effectively, network sharing can greatly reduce redundantinvestments, and allow operators to repurpose funds to develop services, whichwill be the key differentiator in 5G.
“Operators have previouslytouted a mid-2020 launch of 5G services, and the network sharing deal, which webelieve will involve BTSs situated in major population centres, could boostlaunch prospects,” Fitch experts said in a report released recently.
According to the experts, thedeal will also prove to be greatly positive for GMobile, which currently onlyoperates a 2G network. Despite receiving 4G spectrum and licences in 2016, itappears that the operator has not made any meaningful progress in deploying LTEtechnology. This is surprising, given that it does not have any 3G spectrum;instead, it has been relying on offering basic 2G call, text and data servicesat low prices - catered primarily to lower-income and rural subscribers - togain market share.
This strategy has caused it tosteadily lose ground to its larger rivals, which were able to leverage theirscale and capital resources to grow their reach. The network deal could allowGMobile to launch limited 4G or even 5G services, although it will likely needto achieve a more extensive network sharing deal if it were to boost itslong-term prospects. The newly-agreed deal is relatively small in scale; datafrom the MIC suggests that as many as 400,000 BTSs have been installed by allfive mobile operators nationwide.
Fitch said Vietnamobile, theonly privately-owned operator in the country, and the market’s fourth largestby subscriber count, appears to be excluded from the deal; the Hutchison AsiaTelecom–owned operator could find it increasingly difficult to compete in amarket dominated by the State-owned telcos.
According to Fitch experts, thenetwork sharing deal will pave the way for more extensive partnership deals in thefuture.
“The towers segment is one areawhich could see an increased focus; by the end of 2019, we estimate that Vietnamhad close to 100,000 towers, which are mostly owned by operators. The market ishighly fragmented with several private players owning hundreds of towers,suggesting that consolidation in this area is a strong possibility. Mergers andacquisitions in the towers segment could greatly streamline and allowbetter-coordinated construction of these assets.”/.
