5G remains in its infancy in Southeast Asia, despite acceleration efforts.
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The Tech Mahindra-Akiata Group Berhad partnership may help accelerate 5G in Southeast Asia, but the near-term outlook for the industry is “bleak”, Fitch Solutions said in a country risk and industry research report.
Last week, Indian IT and consulting giant Tech Mahindra and Malaysian telecommunications conglomerate Akiata Group Berhad signed an agreement to jointly develop and commercialize 5G business solutions in Malaysia, Sri Lanka, Bangladesh, Nepal and Cambodia.
“We believe this is a promising partnership as it combines Tech Mahindra’s 5G business solutions capabilities with Akiata’s expertise in mobile connectivity, network infrastructure and product services,” Fitch Solutions said.
Although 5G has many advantages, the report said it is still in the development phase for many Southeast Asian countries. 5G is the fifth generation of cellular networks and is up to 100 times faster than 4G.
Fitch Solutions noted that there are economic and other hurdles in the two markets where Akiata and Tech Mahindra plan to collaborate.
In Bangladesh, for example, Fitch Solutions does not expect significant 5G adoption in the next 18-24 months due to expensive mobile phones and next-generation services.
On the other hand, Sri Lanka is struggling with recession, fuel shortages and prolonged power outages.
“This has caused the economy to contract and we expect the wider technology market to face significant pressures that will effectively cripple the sector. These factors will affect the return on investment in 5G deployment and may discourage significant further funding,” the report said.
But there is growing demand for 5G services, which could help increase operational efficiency for companies, such as supporting predictions of better crop yields or climate control in agriculture.
Last week, Akiata Group Berhad, Telenor Asia and Malaysian telecom provider Digi completed the merger of the telecom operators to form Celcom Digi.
The merger would likely help Akiata better take on rival Telekom Malaysia in the enterprise connectivity market, Fitch Solutions said.
Celcom Digi will invest up to 250 million Malaysian ringgit ($56.8 million) over five years to build an innovation center in Kuala Lumpur that will support the adoption of IoT, artificial intelligence, cloud computing and 5G in the country.