Vietnam Begins Auctioning off 5G Spectrum and Gradually Phasing out 2G Services

The Ministry of Information and Communications (MIC) of Vietnam has begun a highly anticipated 5G spectrum auction, with the 2500-2600 MHz frequency band taking the lead with a starting price of 3.9 trillion Vietnamese dong (approximately 158 million US dollars).
According to Vietnam’s state-owned news agency (VNA), the Ministry of Communications and Industry of Vietnam is expected to bid for two additional 5G frequency bands (3700-3800 MHz and 3800-3900 MHz) on March 14th and March 19th respectively, with a starting price of 1.89 trillion Vietnamese dong (approximately 76.63 million US dollars) each. The first round of 5G auctions will begin this Thursday, and participants will compete for a 15 year license to develop and launch 5G services nationwide.

Strict entry barriers
MIC Minister Nguyen Manh Hung stated that 5G auctions are open to “all eligible enterprises”, not just existing mobile network operators. However, according to the Vietnamese news agency, due to the continuous decline in traditional sources of revenue – voice calls and text messages – existing operators are already struggling with a market with decreasing profits, and the opportunity for new companies to enter Vietnam’s fiercely competitive mobile market is minimal.
In addition, the report also pointed out that building a 5G network requires up to $1 billion in funding, which makes it unaffordable for new companies aspiring to enter the market.
Vietnam News Agency (VNA) quoted Nguyen Van Son, director of Vietnam Telecom’s Mobile Center, as saying that obtaining a 5G license does not guarantee the revenue growth that existing operators are seeking, especially when only 17% to 20% of mobile devices in Vietnam support 5G connectivity.
He added that Vietnam’s military electronics and telecommunications company Viettel plans to deploy 5G in areas with high demand and a high proportion of 5G compatible equipment, including industrial zones, export processing zones, and innovation centers. So far, 55 out of 63 provinces and cities in Vietnam have launched 5G pilot projects.
The Vietnamese Ministry of Communications and Industry is determined to launch 5G commercial services in Vietnam this year. Its goal is to provide 5G services to 99% of the population by 2025, with a data transmission speed of at least 100 Mbits/s.

Eliminating 2G services
At the same time, in order to encourage mobile users to switch to newer technologies, the Vietnam Telecommunications Administration (a subsidiary of MIC) has started blocking mobile signals on pure 2G devices this month and instructed mobile operators to stop receiving new users using pure 2G phones. The Vietnamese Ministry of Communications and Industry will completely phase out 2G services in September this year, and the frequency license issued to operators deploying 2G will expire at that time.
Although the government has been banning the import of 2G smartphones for four years, these devices have still entered the country through unofficial channels. The latest data from mobile operators shows that Vietnam currently has 15 million 2G users, accounting for approximately 13% of the total number of users.