Vietnam has launched the long-awaited 5G spectrum auction, allowing all carriers to participate. The first auction will feature the B1 2500-2600 MHz band on March 7th, with more auctions planned for additional bands. This strategic initiative aims to drive the digital transformation of Vietnam’s industry and usher in a new era of increased productivity and efficiency.
After three years of piloting 5G technology in 55 provinces and cities, Vietnam has decided to fully embrace the global trend of 5G commercialization.
On March 7, the Ministry of Information and Communications (MIC) launched the bidding process for 5G spectrum. MIC sought to grant a license for the development and utilization of his 5G 2500-2600 MHz band for the next 15 years.
The start of this bidding competition marks a historic moment for Vietnam’s telecommunications sector. The commercialization of 5G not only represents a new era of technological advancement, but also a significant opportunity for network operators to leverage capital. Furthermore, it will also serve as a driving factor in the realization of Vietnam’s Digital Infrastructure Master Plan from 2021 to 2030.
Auction procedure overview
The 5G auction will introduce spectrum from low to high frequency bands, each unlocking different capabilities. In order to utilize these bands, the Ministry of Internal Affairs and Communications has scheduled three bidding events focusing on different 5G bands.
The first auction, held on March 7, 2024, began by offering rights to the B1 band block spanning 2500-2600MHz. The initial price was VND 3.9 trillion (US$ 158 million), with participants vying for a 15-year license to develop and utilize his 5G services across the country.
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Particularly relevant in the early stages of 5G deployment, the B1 band alleviates existing congestion on 4G infrastructure.
According to auction regulations outlined in October 2023, successful bidders must deploy at least 3,000 5G stations using 2,500 to 2,600MHz within two years of receiving a license. These structures are essential for transmitting 5G signals to users’ devices and ensuring widespread access to high-speed internet.
It also requires a commitment to launch commercial 5G services within the first 12 months.
Following this milestone, two further auctions are scheduled for the C2 and C3 band blocks, which include 3700-3800 MHz and 3800-3900 MHz, respectively. The first band he will be auctioned on March 14th and the second band he will be auctioned on March 19th, 2024. The initial price for both bands is set at VND1.89 trillion (approximately US$76 million).
This means that only three carriers will be able to obtain permission to develop and utilize the country’s 5G spectrum and provide mobile communications services.
Who can participate in bidding for 5G licenses in Vietnam?
According to the MIC, the auction for 5G spectrum rights will be open to any “eligible companies” and will not have any restrictions.
Nevertheless, despite the lack of legal barriers to participation, industry experts emphasize the economic endeavors inherent in the 5G space. The cost of building a new 5G infrastructure is estimated at around US$1 billion, making it unrealistic for external competitors to outbid incumbent carriers.
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As the market saturates and profits decline, Vietnam currently has five telecommunications networks with adequate infrastructure to support 5G. These include Viettel, VNPT, Mobifone, Vietnammobile, and Gtel Mobile. Of these, the first three hold the largest share of the domestic market, so in all three bidding races he has the necessary resources to win the 5G rights. most likely.
Recent updates from MIC are consistent with this prediction, with Viettel scoring a victory in securing the B1 band license.
Investment outlook
Telcos’ strategic investments in securing 5G spectrum bands are key to a stable national infrastructure and support the Vietnamese government’s goal of achieving 99 percent 5G network access rate by 2030. ing. Inspired by success stories like China Mobile, carriers expect significant profits. As 5G is expected to boost development and innovation, Vietnam aims to improve efficiency across sectors and strengthen its competitiveness in high-tech investments.
However, despite the positive prospects for 5G deployment, its commercialization is not without challenges. A significant problem lies in the lack of devices compatible with 5G technology. Currently, only a small percentage of subscribers of major carriers have access to 5G services. Viettel leads with a 17-20% share.
This means that operators may not have clear forecasts for revenue growth at this time, and therefore the scope for participation may be limited.
Addressing these uncertainties is critical to realizing the full potential of 5G in Vietnam. After winning the bid, Viettel pledged that he would address key challenges in how to roll out 5G services across the country. The plan is to prioritize the deployment of 5G in areas with high demand and a high proportion of 5G-enabled devices, such as industrial zones, export processing zones, and innovation centers.
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