TowerXchange's analysis of the independent tower market in Asia

The Asian telecom infrastructure landscape is offering plenty of news in terms of strategic M&A activities, the opening of new markets as well as innovation efforts towards 5G. While the merger between Telenor and Axiata has been called off, the deal between Indus Towers and Bharti Infratel remains on the cards and is likely to further reshape the tumultuous Indian market. Indonesia has resumed M&A activities too, with Protelindo and Mitratel acquiring 3,100 towers from Indosat and XL Axiata recently carving out 1,728 sites to Protelindo.

In the Philippines, Dito is entering the market and DICT is still finalising the terms of the common share tower policy, while some towercos – including American Tower and edotco – have already signed agreements with MNOs and local partners and deployment could start imminently. In the meantime, Bangladesh’s future is still up in the air, with negotiations between towercos and MNOs at a standstill.

Last but not least, 5G is starting to become a reality in more advanced markets such as Malaysia and Japan, where MNOs are actively pursuing tests and early deployments. 5G is expected to shake the Asian mobile and infrastructure industries even further, with MNOs likely to feel more financial pressure than ever before due to pricey spectrum auctions and the needs of technology adoption, while towercos are revisiting their portfolios of products to stay relevant at this time of continuous change.

Australia: Back in 2018, Telstra made the headlines when the operator announced the carve-out of its non- mobile-related assets including data centres, fibre, copper, subsea cables, poles and more into a separate infraco. The company has recently confirmed that the new entity will be up and running by July 1, 2020. The result will be a sub-corporation that owns 250,000 kilometres of fibre optic cable, 360,000 kilometres of ducts, 8000 mobile towers, masts and poles, 5000 exchanges, two data centres, and access to 400,000 kilometres of subsea cables.

Now, it is all about 5G with Dense Air, Mobile JV (a joint venture between TPG Telecom and Vodafone), Optus Mobile and Telstra already rolling out their new networks in the 3.8GHz band. In fact, the market leader has a total of 100,000 5G devices connected to its network. The telco has successfully deployed around 800 5G-capable sites and plans to extend 5G connectivity to a total of 35 cities by mid-2020. 

Optus has a few 5G sites and is partnering with technology leader Ericsson to build at least 60 more in the upcoming months.

Both towercos and MNOs will need to work together to raise the necessary investment for 5G networks deployment while exploring further collaboration and sharing initiatives on small cells, base stations hotels and fibre. Leading towerco Axicom is exploring new technologies and its CEO Graeme Barclay has publicly confirmed that the company is already increasing capacity in existing sites, while investing in small cells and new solutions such as power, fibre, cabins, and BTS on a shared access and shared cost model.

The “traditional” tower landscape remains pretty much unchanged with Axicom (formerly Crown Castle), Broadcast Australia and a handful of smaller independent towercos owning around 2,600 towers and a further 1,800 towers having been recently erected by nbn, the Government- owned new broadband network.

Bangladesh: The tower market in Bangladesh has been officially opened since 2018, when four towercos received licenses to operate in the country (edotco Bangladesh, Kirtonkhola Tower Bangladesh, AB Hightech Consortium and TASC Summit Towers). Since then, a few more international players have decided to get involved via cooperation agreements and joint ventures.

However, towercos and MNOs have so far failed to reach definitive agreements on how to successfully cooperate for the deployment of telecom infrastructure across Bangladesh. In fact, beside edotco – who owns 10,000 towers following the transfer of assets from sister company company Robi – other licensed towercos haven’t been able to add new towers to their portfolios, either in the form of build-to-suit or sale and leaseback deals. On the other hand, since the licenses were awarded, MNOs have been forbidden from deploying new sites by themselves.

In a country in desperate need for more infrastructure and better coverage, this standstill is indeed a crucial problem. In fact, with networks already at maximum capacity, MNOs were keen to build as many as 3,000 new sites in the mid-term to improve QoS.

Terms and conditions remain the stickiest points for both BTS and SLBs. The QoS is indeed one of the key pain points in Bangladesh as MNOs are demanding 99.5% uptime but towercos are guaranteeing 98%, which would lead to unacceptable downtime. Local sources report that logistic challenges are being analysed and negotiations around SLAs are particularly complicated due to the characteristics of the local market, weather conditions and operational hurdles. Other contentious points include the duration of lease contracts, with MNOs not keen to commit for long timeframes.

Worrisome news came from MNOs Robi and Grameenphone, who are still dealing with the ongoing dispute related to unpaid dues found during BTRC’s audits. In a recent twist, the Government has approved the appointment of administrators by the BTRC to oversee the MNOs’ operations. For the time being, the two MNOs are also unable to buy equipment or perform maintenance on their networks.

Cambodia: Cambodia is home to 16.4mn people and according to Q418 data from GSMA Intelligence, it has a 126% SIM penetration rate and 20.6mn mobile connections. The market features six MNOs – Cellcard, Metfone, SEATEL, Kingtel, Cootel  and Smart – and just under 10,000 towers.

The establishment of Chinese-backed MNOs Seatel, Kingtel and Cootel is creating a very competitive environment that will drive new deployments. With the emergence of 5G market experts predict around 200-300 new towers to be built in Cambodia per year until 2021, also thanks to the emergence of 5G. In addition, MNOs are now revisiting their strategies and are finally contemplating a sale of their assets to towercos.

The rapidly expanding city of Sihanoukville, which has become one of the fastest-growing in Asia, due to the continued growth of casinos and online gaming businesses, has attracted the attention of many new Chinese investors due to the demand for new data and the increasing need for new infrastructure. Moreover, China Tower is expected to make an entrance and regional investors from Malaysia and other neighbouring countries are also looking at the Cambodian tower market.

For the time being, two towercos are active in the market. edotco made an entrance in 2018 with the acquisition of 325 sites from SEATEL and now owns and/or manages 3,623 towers across the country. Local tower builder Camtowerlink also has a modest footprint in Cambodia. Both edotco and Camtowerlink are offering IBS, small cells as well as camouflaged solutions in the country.

India: While the Indian MNO and towerco landscape has been considerably reshaped over the past couple of years, with less active players and hopefully more potential for growth in sight, India is still dominated by a huge growth in data demand especially from relatively small towns and rural areas that have been lagging behind in terms of coverage. Many key players consider the worst behind them but the market has undergone a radical makeover that has left nearly nothing untouched and tenancy ratios have been severely impacted with many towers now operating with a single tenant.

Revenue streams for towercos are changing, with many of them now involved in providing high-net solutions and - to a certain extent - fibre while working to optimise their opex and adopt efficient energy solutions and monitoring systems.

On the M&A side, the planned merger between Indus Towers and Bharti Infratel is still making the headlines. While the deadline for the completion of the merger was set as October 24 2019, the deal is yet to be finalised due to government approvals. The merger is expected to be finalised in the near future, but its delay causes immediate concerns with regards to Vodafone Idea and its plans to divest its stake in the merged entity. In fact, the cash-strapped MNO holds 11.15% in Indus Towers and was relying on a quick exit in order to finance its much-needed network expansion, which has been put on hold due to its financial struggles.

As part of its monetisation plan, Vodafone Idea has recently finalised the demerger of its fibre assets, which got transferred to a new unit – Vodafone Towers Ltd. The MNO is likely to seek a buyer for the assets, which have been valued at approximately US$450mn. The move follows the demerger strategies of Reliance Jio and Bharti Airtel. In fact, Jio carved out its fibre and tower assets into two separate business earlier this year and Bharti Airtel did the same with its optical fibre, which is now part of a subsidiary called Telesonic Networks.

On the MNO front, Reliance Jio Infratel-Brookfield deal is currently in process and should be finalised by end of Q1 2020.

In the meantime, Reliance Jio added 103mn subscribers over the past year, with a churn rate of 0.74% - well below the industry average – and is now (as of October 2019) serving nearly 350mn customers nationwide. The MNO is also number one in terms of highest 4G availability (97.8%), followed by Airtel (89.2%). Vodafone Idea still leads in terms of number of subscribers (375mn) in spite of losing nearly 5mn customers in August alone while Airtel sits in third place (327.9mn).

Questions remain as to whether Vodafone Idea can sustain its leading position without heavily investing in network upgrades to match the offers of its two rivals.

Last but not least, bankrupt Aircel has recently fired most of its remaining employees (approximately 1,000 out of 1,229) in a desperate move to keep operating and be able to sell its assets at a good price during the ongoing insolvency process. Aircel is one of the many parties hit by the restructuring of the Indian telecom landscape.

Indonesia: Last year, Indosat Ooredoo sold 3,100 sites to Mitratel and Protelindo for a combined price of US$452mn. Protelindo is currently acquiring 1,728 sites from XL Axiata for US$164mn - a clear sign that Indonesian MNOs are eager to monetise their assets in order to release some financial pressure and gear up for imminent 5G investments.

Organic growth has picked up over the last couple of years, and the increase of data demand, a populated MNO landscape and new 4G rollout plans from Indosat Ooredoo and Hutch - who are expanding outside Java - will continue driving demand for new sites and co-locations in the country, where towercos build 3,000-5,000 towers, rooftops and infill sites per year. Tenancy ratio growth compares favourably to many other global tower markets, with around 0.13 tenants added per tower per year.

We expect towercos to continue improving their value proposition through new services and revenue streams such as fibre and small cells following a strategy initiated by Protelindo and STP. Specifically, Protelindo is set to explore VSAT cellular backhaul and mini-data centres through its subsidiary iForte. Microcells and other street furniture are also a big focus for towercos.

Additionally, there have been rumours of a potential opening of the tower sector (currently closed to foreign investors) and representatives from the U.S. Government as well as international developers have met with the government to discuss the matter.

Japan: Japan is one of the most sophisticated mobile markets in the world. Traditionally, towers have been seen as a source of competitive differentiation and the initial interest in carving-out a towerco a few years ago tailed off. However, the arrival of Rakuten, the country’s fourth operator, and the new government strategy could completely shift Japan’s telecom infrastructure market. Japan’s executive is pushing MNOs to reduce their prices and has already released some initial guidelines for infrastructure sharing, which could eventually open the door for new and existing infrastructure players.

Japan is famous for having the fewest number of subscribers per tower in the world – reportedly around 500 – suggesting a staggering tower count of around 220,000 for a nation of 127mn people and a landmass of just 378,000sq km.

Last year, the Ministry of Internal Affairs and Communications (MIC) approved the allocation of frequency bands for 5G advanced services to the four MNOs-NTT DOCOMO, KDDI (au), Softbank Corp and new entrant Rakuten Mobile. The MIC also published its approvals relating to 5G BTS deployments for all four companies. All four MNOs aim to commercialise 5G services in 2020 and will invest US$14.4bn in the five-year deployment phase.

The country’s three leading MNOs are believed to have each added up to 30,000 microcells and small cells as infill sites. TowerXchange understand several tower companies are trying to establish themselves in the Japanese market, but to date their penetration remains negligible.

Laos: In 2018, Laos opened up to towercos, with the national government and local firm Click Lao Marketing and Consultancy signing an agreement with China Tower Corporation (CTC) to establish the Southeast Asia Tower company. According to local news sources “the Southeast Asia Tower Company will mainly be engaged in the construction, maintenance and operation of communication towers, base stations, power supplies and other supporting facilities, as well as that of indoor distribution systems and transmission systems in Laos.”

In February this year, edotco presented a filing at the Bursa Malaysia announcing its entrance into Laos via the purchase of an 80% stake in local entity Mekong Tower Company Ltd. (MTCL). The filing stated that “the Laos tower market is expected to undergo intense growth in tandem with a national drive towards 4G adoption, with an estimated demand of no less than 5,000 towers over the next 3 years.”

The country is home to four MNOs – Beeline, ETL, M-Phone and Unitel – and holds great potential for growth with only 80% SIM penetration and 5.6mn mobile connections (and 7mn inhabitants). The estimated count for the country is 8,000 sites but this figure is likely to go up thanks to the newly launched towerco activities.

Malaysia: After ending talks of a potential merger with Telenor, Axiata Group is now targeting other potential alliances and acquisitions in both Malaysia and Indonesia.

edotco now owns / manages over 11,000 towers in Malaysia, following the initial carve-out of 4,000 sites from Celcom (Axiata). State-backed and independent towercos own a further 3,500 while OCK, YTL, Naza Communications and Omnix run portfolios ranging between 5,000 and 150 sites.

There are an estimated 22,682 towers in Malaysia, representing almost 2,000 mobile subscribers per tower. A new ground based tower in Malaysia costs around RM300,000 (US$69K).

5G is a top priority for the government, who has created a 5G taskforce to support the transition and help the industry with its rollout. The Malaysian Communications and Multimedia Commission (MCMC) has recently confirmed that the 700MHz, 3.5GHz and 26GHz-28GHz bands will be the spectrum bands used for the rollout of 5G. The regulator has also confirmed that the 700MHz and 3.5GHz bands are being considered for allocation to a single entity comprising a consortium formed by multiple licensees, with MCMC to conduct a tender process-as the regulator aims to lower capital expenditures by minimising costs and preventing the duplication of infrastructure.

In the meantime, MNOs are now building new sites and fiberising their towers, while trying to figure out whether to partner with pure fibre players or other MNOs or towercos, as towercos remain cautious about fibre integration in a very populated fibre landscape.

It has been estimated that an additional 8,000 structures may be needed in Malaysia for 4G and with operators exploring 5G, much of the new demand will be met by microcells, lamp-poles, DAS and IBS.

Mongolia: Mongolia is home to four MNOs – G-Mobile, MobiCom, SKYtel and Unitel – and 4.2mn mobile connections with a population of 3.1mn (GSMA Intelligence – Q418). Following the separation of the telecom and infrastructure businesses in 2013, a few infrastructure providers now run towers, active equipment, fibre and microwave backhaul across the 1.5mn sq km Mongolian landscape.

There are approximately 1,000 towers in the country and more than half are shared. Infrastructure providers in the country include State-owned ICNC, Mobi Network and Sky Network.

Myanmar: With around 62% of sites in the country owned by towercos, Myanmar remains an exciting market in which to do business for entrepreneurial towercos. To date, there are around 16,000 sites in Myanmar.

Latest entrant MyTel sealed a build-to-suit deal with MNTI – one of the latest towercos to enter Myanmar – for 400 sites of which 371 have already been built. The operator has already invested more than US$1bn in infrastructure, including the rollout of 30,000km of fibre-optic cable.

Last year, edotco took over the provision of energy services for 1,250 Ooredoo sites. The deal, which has been discussed in a separate TowerXchange interview with Vijendran Watson, edotco Myanmar’s MD, marked a change in the way the towerco operates in the country offer a tower + power model. IGT overpassed 3,000 towers and will continue its organic growth.

The country is definitely moving towards consolidation and last year TPG  finally announced the acquisition of Pan Asia Majestic Eagle (PAMEL). The American investor added PAMEL’s 1,300 towers to its existing portfolio of 1,800 Apollo-owned sites, with an enterprise value of approximately US$1bn.  KPR TOWERS also announced the acquisition of Myanmar Infrastructure Group (MIG) and their 100 towers from majority owners Singapore Myanmar Investco for US$10.8mn.

Stimulated by the network investment commitments of MyTel, TowerXchange has learned of several new towercos now launching in the marketplace including New Tower Development (NTD), Myanmar Technology Gateway (MTG), MNTH, DLRE, CommBiz, ITMB, MAPCO, MNTI, along with potentially a handful more others.

On average, most of the mature towers that are two-plus years old have a tenancy ratio around 2.0x.

All four operators are currently testing 5G and regulator PTD estimates that the country could be launching the technology in two to three years.

Grid power is still unreliable even in major cities and power remains the main issue for the industry, with towercos and MNOs relying on gensets and batteries while exploring the benefits of hybrid systems, renewables and lithium-ion batteries to power and cover their operations.

Nepal: Two years ago, Axiata Group closed the acquisition of a majority stake in Nepalese market leader Ncell from TeliaSonera, in a deal believed to be worth US$1.365bn. There have been no tower deals in Nepal to date, but this move by the Axiata Group may pave the way for edotco to enter the market in the near future.

Almost two years ago, the Nepal Telecommunications Authority (NTA) published a draft Infrastructure Development and Sharing Regulation, seeking request for proposal from towercos to provide telecom infrastructure services. Although at least eight international firms were interested, the Ministry of Communications and Information Technology (MoCIT) has not issued any license yet. Last summer, NTA threatened to issue an MNO licence to an international player due to concerns about the lack of competition and investments in the telecoms market, which is currently dominated by Nepal Telecom, Ncell and Smart Telecom.

Although both NTA and the Ministry of Communications and Information Technology (MoCIT) have been working on different plans to promote infrastructure sharing and the entrance of towercos in the market, although we haven’t seen any official move so far. In the meantime, Nepal Telecom is building new sites as part of its 4G network expansion.

TowerXchange will be looking to undertake further market studies for a dedicated report on Nepal’s telecom infrastructure landscape.

New Zealand: There are early signs of a nascent tower industry emerging in New Zealand, where Spark and Vodafone New Zealand have substantial but ageing tower networks, newer entrants 2degrees have leveraged co-location where possible while building a few hundred towers. 2degrees may have an appetite to sell their towers and partner with a towerco on BTS. Parallel infrastructure is substantial, while the need for improved rural coverage, particularly on the South Island where tourist and agribusiness drive demand, has prompted the government’s Rural Broadband Initiative to invest in over 100 towers. A total of around 4,000 macro-towers are supplemented by around 7,000 rooftop sites, primarily used in the larger cities.

Philippines: After two years of regulatory disputes, Mislatel has finally received its mobile license and the new Filipino operator, who has committed to provide 37% coverage in its first year, has rebranded to Dito Telecommunity. The new entrant, owned by business mogul Dennis A. Uy and China Telecom, is initially investing more than US$ 2.5bn on the construction of around 3,000 new sites and the company is in advanced commercial and technical conversations with vendors and infrastructure partners, aiming to start its rollout imminently.

The Department of Information and Communications Technology (DICT) is still set to release the final terms of its common tower sharing policy, which will be the crucial final step towards the successful creation of a tower industry in the country. The regulator has already signed 22 MoUs with local and international tower providers that aim to be involved in the construction of the 50,000 new sites that Philippines need over the next five years.

In the meantime, incumbents PLDT and Globe are engaging and closing commercial rollout agreements with international and local towercos, with neither of the operators planning the release of any assets.

MNOs will continue investing in 4G and 5G deployment as well as modernising existing 3G networks while expanding their coverage to new areas. The big jump in frequency that 5G requires will also drive the deployment of new antenna technologies and urban typologies. Pushed by the new competitor, Globe and PLDT will have to put up more cell towers, antennas, and basestations across the nation, especially in cities where line-of-sight transmissions are more difficult.

Moreover, fibre will present great opportunities for the industry. PLTD’s ongoing nationwide fibre-optic rollout program has already set up a number of so-called ‘PLDT Smart City’ areas.

The entry of a third operator and the tower sharing mandate make the Philippines the must-watch Asian tower market of the moment. There is plenty of potential here, especially if the government is able to come through with significant improvements to permitting approvals.

South Korea: According to GSMA Intelligence, SIM penetration was at 113% among a population of 50.4mn in Q4 2015. South Korea boasts one of the most sophisticated telecommunications infrastructures in the world, cultivating an insatiable demand for high speed mobile broadband among its citizens.

Mobile broadband penetration in South Korea is above 99% and fibre has been widely deployed. South Korea is a three-operator market featuring SK Telecom, KT and LG Uplus. The Ministry of Science, ICT and Future Planning (MSIP) has tried multiple times over the years to license a fourth MNO, however, failed again in February 2017 as none of the three applicants (Sejong Telecom, K Mobile, and Quantum Mobile) met the criteria.

The Ministry of Science and ICT (MSIT) has revealed that around 260,000 users have signed up for 5G since the three country’s MNOs launched services. According to the figures provided by MSIT, there are now 54,202 5G base stations in operation across South Korea. TowerXchange is starting to pick up the first faint signals that towerco activity may be emerging in South Korea.

Sri Lanka: There are approximately 8,000 towers in Sri Lanka and edotco to date owns 126 sites. It’s unclear to date what happened to the nearly 3,400 sites that edotco managed until the end of 2018. High levels of bilateral sharing means tenancy ratios are closer to two than one all over the country. Sri Lanka is now mostly covered with 3G and 4G, which is driving need for cell site densification. Dialog and Mobitel hold all of the 4G spectrum, and any other players that want to offer this will need to engage in RANsharing.

Bharti Airtel had been rumoured to be looking at selling its 2,500 towers but seems to have cooled on the idea.

Earlier this year, Sri Lankan MNO Dialog Axiata Group signed two agreements with the country’s Board of Investment (BOI) to receive US$254.1mn. BOI’s investment will facilitate USS190.7mn to Dialog Axiata and US$63.4mn to its Dialog Broadband Networks subsidiary. The investment will support the expansion of mobile and fixed 4G LTE networks, the evolution of IP and fibre-optic networks as well as the development of the group’s Wi-Fi and broadband networks, while also supporting the deployment of 5G technologies in the future.

Thailand: With five operators and over 50,000 towers, Thailand could be the perfect tower market but to date, only one company (DIF) acts in the infrastructure industry as a fund with around 16,059 towers and over 1mn km of fibre.

Thailand’s #2 MNO True Move has sold 788 telecoms towers, 1,795km of optical-fibre cable and 3,700km of fibre to the Digital Telecommunications Infrastructure Fund. The assets were valued at THN15.7bn (US$513mn), and True Move will lease back some of the towers and fibre through 2033. True Move also acquired shares in the Digital Telecommunications Infrastructure Fund worth THB4.74bn (US$154mn), maintaining their stake in Thailand’s leading towerco, which had issued new shares at 30%.

To date, DTIF is the only entity owning towers beyond MNOs. The fund owns over 13,000 towers and 1mn km of fibre.

Recently, the long-term dispute between AIS and state-owned TOT has been resolved. The two MNOs had been embroiled in a five-year dispute over the ownership and right to use 13,000 towers, which TOT claimed fell within a build-operate-transfer agreement. The resolution sees a TNB300mn (US$9.8mn) monthly service fee for AIS to continue using the towers replaced by a ten-year deal in which AIS pays to lease TOT’s towers, and TOT uses AIS’s space and maintenance services. The deal is reportedly worth THB28bn (US$915mn).

TOT is also planning to finalise its merger with the other State-run operator, CAT Telecom, by Q2 2020.

On February 16, The National Broadcasting and Telecommunications Commission (NBTC) completed its 5G multiband spectrum auction, raising around US$3.2 bn from the sale of 48 concessions for spectrum in the 700MHz, 2600MHz and 26GHz bands. Advanced Info Service (AIS), through its subsidiary Advanced Wireless Network (AWN), secured 23 out of the 49 licences, followed by True Corp and its subsidiary True Move H Universal Communication (TUC) with 17 licences, TOT with four licences and both Total Access Communication (DTAC) and CAT with two concessions each. 

Vietnam: According to the Ministry of Information and Communications (MIC), Vietnam has now 128mn mobile phone subscribers. Although the market is quite mature and saturated, its telecom industry still generated around US$16.8bn in 2017 (a 7.3% growth YoY) and the local Government is actively promoting the development of telecom technologies and IT initiatives to meet the objectives of sustainable economic growth and international integration. More recently, the government has recently announced plans to sell large stakes in State-owned Mobifone and VPTG (which owns MNO Vinaphone) by the end of 2020. MNO privatisation - with a potential entrance of international investment - and the long rumoured sale or carve-out of Viettel’s towers, could create a whole new and very interesting telecom landscape in the country.

MIC is also preparing the 2600MHz band spectrum auction, which is expected to enhance LTE coverage and capacity across the country. Winning bidders will be required to begin network deployment within 24 months of receiving their spectrum licence, which will notably drive demand for new sites and equipment.

Viettel undoubtedly dominates the game and has around 50% market share with 63mn subscribers. The country’s largest mobile operator by subscribers is now aiming to add ten million 4G customers this year and is rolling out 2,400 new LTE base stations  across the country to provide coverage to 3,700 underserved areas. Further, the MNO plans to introduce 5G services in June this year, using network equipment and software developed by itself.

Currently there are an estimated 90,000 towers in Vietnam, and the majority of them remain in the hands of the operators. The towerco ecosystem is still fragmented and there are dozens of very small tower companies owning portfolios of less than 100 sites.

With 2,673 towers as of Q219, we can consider Malaysia-based OCK the market leader. OCK is not planning to build more assets due to mobile market constraints but they are very keen on consolidating its portfolio and TowerXchange has learned that they are currently negotiating some acquisitions.

Golden Towers and Nisco are the other known towercos of some scale with 350 and 300 towers respectively. The former is now building 100 more towers after closing a BTS deal with MobiFone.

Tenancy ratios are around 1.5. MNOs do not have plans to sell and leaseback any tower assets and infrastructure sharing among operators is still limited, but there is still much room for growth and positive expectations. Lease rates, which are all denominated in local currency, have grown recently due to inflation and an increase in rental fees. The average cost is VND15mn per month (US$640 per month), notably lower than Myanmar (US$900-1500) but still higher than in India (US$550) and China (US$350).

The market has almost reached its peak in terms of subscribers however everybody across the value chain can find a role in this challenging environment. While the government still needs to grasp the benefits of infrastructure sharing, operators can improve their efficiency and relieve their balance sheets by modernising their networks and transferring some responsibilities to towercos. Infrastructure providers can find great opportunities in urban areas, where fibre, 4G and the future deployment of 5G will require significant network investment. Ultimately, vendors can also play a substantial role in this modernisation process by providing more sophisticated monitoring systems and helping both towercos and operators in optimising their assets.

State-owned MobiFone serves approximately 34.8mn customers, followed by VNPT-Vinaphone with 20.5mn. Smaller players Gmobile, with 6mn and Vietnamobile with 3.7mn are trying to increase their share of the pie and compete with the three giants.