Completing the preparations for the subsequent auction of 4G and 5G frequencies

DNHN - When the Law on Radio Frequency goes into effect, operators who want to provide customers with good frequency bands will be required to participate in an open and transparent auction.

The Radio Frequency Department is finalizing preparations for the upcoming auction of 700 MHz frequencies for 4G and 5G. To continue the auction, the Ministry of Information and Communications must submit to the Government a proposal to amend pertinent frequency auction regulations. These stages are currently being completed so that the 700 MHz frequency can be auctioned as soon as possible for 4G and 5G. New regulations are anticipated to eliminate obstacles in frequency auctions to expedite 4G development and 5G commercialization.

According to the plan, Vietnam will commercialize the 5G network in 2023 using 5G equipment manufactured domestically. Consequently, it will increase self-reliance and technological advancement, lessen reliance on foreign equipment suppliers, and contribute to national safety and security.

By 2030, it is anticipated that 5G networks will generate approximately $1.5 billion in revenue for telecom operators in Vietnam.

Previously, the Ministry of Information and Communications licensed 40 provinces and cities governed by the central government to test 5G. The Ministry of Information and Communications encourages businesses to continue testing 5G applications in 2022, assessing market needs, and developing the most effective business plan possible when officially licensed.

Although 5G networks are receiving attention and being deployed in hotspots, industrial zones, and major cities, international telecommunications experts believe that 4G is still significant and will continue to exist for some time. Continuing to invest in 4G is still important, as 4G will remain the most pervasive and significant network over the next few years.

It is anticipated that 5G will be heavily deployed in hot spots, industrial zones, and major cities beginning in 2025.

Previously, state agencies approved the licensing of frequencies for businesses, followed by auditions to obtain frequencies. In other words, the band is licensed to businesses at no cost. According to Ministry of Finance regulations, network operators are required to pay only the band fee annually. Even the management agency at the time talked extensively about the need to collect franchise fees from carriers.

However, when the Law on Radio Frequency goes into effect, operators who want to provide customers with good frequency bands will be required to participate in open and transparent auctions.

According to the Department of Radio Frequency's announcement, the starting price for the auction of 3 band blocks of 2300-2400 MHz frequency is 17,394 billion VND. Band blocks A1 (2300 – 2330 Mhz), A2 (2330 – 2360 Mhz), and A3 (2360 – 2390 Mhz) have a starting price of VND 5,798 billion and a shelf life of 15 years.

With a starting price of VND 5,798 billion and a lifespan of 15 years, each carrier will theoretically pay at least VND 386 billion per year in frequency fees. This is a significant figure for all mobile networks. To provide services, carriers will also need to invest in infrastructure and develop new 5G business models. This is also a substantial investment for carriers.

The Ministry of Information and Communications reports that Vietnam has 126 million mobile subscribers and that the market is beginning to reach saturation. Another statistic indicates that each year, network operators compete for approximately 800,000 new subscribers.

Ha Anh (t/h)