5G short-term outlook in Southeast Asia remains ‘bleak’

Despite acceleration efforts, 5G remains in its infancy in Southeast Asia.

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The Tech Mahindra-Axiata Group Berhad partnership could help accelerate 5G in Southeast Asia, but the near-term outlook for the industry is “bleak,” Fitch Solutions said in its Country Risks and Industry Research report.

Last week, Indian IT and consulting giant Tech Mahindra and Malaysian telecommunications giant Axiata Group Berhad agreed to jointly develop and commercialize 5G enterprise solutions in Malaysia, Sri Lanka, Bangladesh, Nepal and Cambodia.

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“Combining Tech Mahindra’s capabilities in 5G enterprise solutions with Axiata’s expertise in mobile connectivity, network infrastructure and product services, we believe this partnership is promising,” said Fitch Solutions.

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While 5G has many benefits, the report said it is still in its infancy in many Southeast Asian countries. 5G is the fifth generation of cellular networks and is up to 100 times faster than 4G.

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Fitch Solutions cited economic headwinds and other obstacles to the two markets that Axiata and Tech Mahindra plan to work with.

In Bangladesh, for example, Fitch Solutions expects 5G adoption to decline significantly over the next 18-24 months due to expensive mobile phones and next-generation services.

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Sri Lanka, on the other hand, is struggling with an economic downturn, fuel shortages and extended power outages.

“This has shrunk the economy, and we anticipate that the broader technology market will face significant pressure that will effectively cripple the sector. These factors will strain the return on investment of 5G deployments and hinder meaningful additional funding. You can.” the report said.

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However, there is growing demand for 5G services, which can help companies increase operational efficiencies, such as better predicting crop yields or assisting with climate control in agriculture.

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Last week, Axiata Group Berhad, Telenor Asia and Malaysian telecommunications provider Digi completed a merger of their telecommunications divisions to form Celcom Digi.

Fitch Solutions said the merger will help Axiata better acquire rival Telekom Malaysia in the enterprise connectivity market.

Celcom Digi will invest up to RM250 million Malaysian ($56.8 million) over five years to build an innovation center in Kuala Lumpur to support Malaysia’s adoption of Internet of Things, artificial intelligence, cloud computing and 5G.

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