5G show great long-term potential in Southeast Asia and South Asia as technological advancements have the potential to bring about an array of innovations, from faster speeds for mobile internet access to a range of new services. But Fitch Solutions believes that the near-term outlook for the industry is “bleak”.
The recent partnership between Indian IT and consulting giant Tech Mahindra and Malaysian telco conglomerate Axiata Group Berhad is set to accelerate 5G adoption in the Southeast and South Asian regions.
Tech Mahindra and Axiata have come together to work on 5G enterprise solutions for Malaysia, Sri Lanka, Bangladesh, Nepal, and Cambodia. These innovative solutions will be made available to customers in these locations after commercialization.
“We believe that this is a promising partnership as 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.
Southeast Asia 5G outlook bleak
However, while the partnership could be beneficial to 5G adoption in the long run, despite Fitch Solutions’ near-term ‘bleak’ outlook, The current 5G landscape in the target countries continues to be at a nascent stage, and many of the countries are still far from achieving their vision for 5G technologies.
Bangladesh and Sri Lanka, for example, are facing a plethora of economic challenges. In Bangladesh, Fitch Solutions believes that expensive mobile phones and next-generation services will delay significant 5G adoption in the 18-24 months after the partnership’s launch. Meanwhile, Sri Lanka has been suffering from the aftermath of prolonged civil unrest and a lingering fiscal crisis, leading to hurdles in 5G infrastructure development.
“This has led to a contraction of the economy, and we expect the wider technology market to face significant pressures that will effectively cripple the sector. These factors will weigh on the returns on investment of 5G deployment and may discourage meaningful further funding,” the report said.
CNBC reports that Axiata has been trying to strengthen its 5G presence in the region with a merger of telco operations between Axiata, Telenor Asia and Malaysian provider Digi to form Celcom Digi.
The merger of Axiata and Telekom Malaysia is thought to give the former an edge over its competitor in terms of enterprise connectivity.
A staggering sum of up to 250 million Malaysian ringgit ($56.8 million) will be invested into establishing an innovation center situated in Kuala Lumpur, providing technological solutions for businesses across the region over a span of five years.
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