5G network development becomes urgent
During the pandemic, online shopping and cashless payments have exploded in Southeast Asia, with video streaming becoming the new norm, leading to skyrocketing data charges.
Some industry experts say Southeast Asia’s demand for 5G services could be greater than other markets, with telecom equipment supplier Ericsson forecasting more than 600 million 5G users in the region and Oceania by 2028.
The transition to new telecommunications standards often leads to mergers between carriers. In 2014, Indonesia's third-ranked telecom company XL Axiata acquired fifth-ranked Axis Telekom Indonesia.
That same year, Myanmar allowed Telenor and Qatar's Ooredoo to enter the market, which is controlled by a state-owned carrier, to attract much-needed investment.
The arrival of 5G telecommunications services has sparked a wave of mergers among wireless carriers in Southeast Asia to cut investment costs, but has raised concerns about the market falling into the hands of a few large businesses.
In Thailand, True Telecom, the second largest operator, merged with Total Access Communication (DTAC), which came in third. The new company, still called True, controls 50% of the telecommunications market, taking over the number one spot from AIS, the country’s leading service provider for the past two decades.
In a press conference in March marking the completion of the merger, True CEO Manat Manavutiveth said the company plans to expand 5G service to cover 98% of Thailand's population by 2026.
In Malaysia, the second and third largest telecommunications companies, Axiata Group-controlled service provider Celcom, merged with Digi.com, 49% owned by Norway's Telenor, to create a new giant with more than 20 million customers.
Concerns about monopoly
Behind these “leadership” deals is the need to raise capital to fuel the expansion of network services, as well as the resources needed for research and development. According to British researcher GSMA, investments in the Asia-Pacific telecommunications sector are expected to reach $134 billion between 2022 and 2025, of which 5G spending accounts for 75%.
However, the dominance of the market by the “big players”, the result of the marriage between carriers, is also a big concern. For example, the Philippine mobile phone market is almost a two-horse race between Globe Telecom and PLDT. The situation is so bad that the administration of former President Rodrigo Duterte had to lobby other companies to enter the telecommunications industry, leading to the launch of Dito Telecommunity in March 2021.
In Thailand, the government approved the merger of True and DTAC in October with conditions such as capping usage fees under the new entity. However, consumers there have expressed concerns that the merger could lead to a decline in service quality.
Notably, the development of 5G services in Southeast Asia has a clear Chinese imprint, as Beijing has quickly reached infrastructure supply agreements with several countries in the region based on its cost advantage. In the US and Europe, lawmakers have blocked Chinese companies from participating in 5G networks.
In June last year, the Thai government announced a partnership with Chinese telecom giant Huawei Technologies to promote 5G for industrial use. The company is also working with Indonesia to train 5G experts.
Meanwhile, Malaysia chose Ericsson as the main 5G contractor, but did not forget to affirm that this was the result of a rigorous bidding process and did not exclude the Chinese company for geopolitical reasons.
(According to Nikkei Asia)
Source
Comment (0)