5G stays in a nascent stage in Southeast Asia, despite acceleration efforts.
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The Tech Mahindra-Axiata Group Berhad partnership may help speed up 5G in Southeast Asia however the short-term outlook for the industry is “bleak,” Fitch Solutions said in a rustic risk and industry research report.
Last week, Indian IT and consulting giant Tech Mahindra and Malaysian telco conglomerate Axiata Group Berhad inked an agreement to jointly develop and commercialize 5G enterprise solutions in Malaysia, Sri Lanka, Bangladesh, Nepal and Cambodia.
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“We imagine that this can be a promising partnership because it combines the capabilities of Tech Mahindra’s 5G enterprise solutions with Axiata’s expertise in mobile connectivity, network infrastructure and product services,” said Fitch Solutions.
While 5G has many advantages, the report said it continues to be in a nascent stage for a lot of Southeast Asian countries. 5G is the fifth generation of cellular networks and is as much as 100 times faster than 4G.
Fitch Solutions noted there are economic headwinds and other hurdles in two markets that Axiata and Tech Mahindra plan to collaborate in.
In Bangladesh, for instance, Fitch Solutions doesn’t expect significant 5G adoption over the subsequent 18-24 months as a consequence of expensive mobile phones and next-generation services.
Sri Lanka, then again, is battling a recession, fuel shortages and prolonged power outages.
“This has led to a contraction of the economy, and we expect the broader technology market to face significant pressures that can effectively cripple the sector. These aspects will weigh on the returns on investment of 5G deployment and should discourage meaningful further funding,” the report said.
But there may be rising demand for 5G services, which could help increase operational efficiency for corporations, comparable to supporting higher crop yield predictions or climate control in agriculture.
Last week, Axiata Group Berhad, Telenor Asia and Malaysian telco provider Digi accomplished a merger of telco operations to form Celcom Digi.
The merger would likely help Axiata higher tackle rival Telekom Malaysia within the enterprise connectivity market, Fitch Solutions said.
Celcom Digi will invest as much as 250 million Malaysian ringgit ($56.8 million) over five years to construct an innovation center in Kuala Lumpur to support the adoption of web of things, artificial intelligence, cloud computing and 5G within the country.
