Qualcomm Indochina’s CEO Thieu Phuong Nam believes that 2016 is the time for telcos to utilize 4G because of the readiness of terminal devices and technology advancement. Nam said the number of clients using 3G has been increasing rapidly, accounting for 1/3 of smartphone subscribers. Meanwhile, the prices of smartphones in general and 4G smartphones in particular are on a sharp decrease, while more and more low-cost models have appeared in the market. Qualcomm, for example, has 4G integrated into all chipset models, including products such as Snapdragon 200. The telcos’ worries about expensive terminal devices will no longer exist.
Nam said that 4G deployment will bring new great opportunities to mobile network operators. 4G may give a push to the mobile industry, helping increase the sales of terminal devices, number of data service users, and mobile network operators’ revenue. Mobile network operators sell data packages based on capacity, while they don’t care if they provide 3G or 4G. As 3G users cannot use services such as HD video, they tend to buy small-capacity service packages. But if they shift to use 4G which has 10-20 times more speed than 3G, they would use more data. As 4G has lower production cost than 3G, while 4G subscribers will use bigger data, telcos will make good profit even if they just define 4G service fees at the same levels as for 3G.
According to the Boston Consulting Group, the data transfer speed of 4G LTE could be 12,000 times higher than 2G, while the production cost could be 99 percent lower. Therefore, an analyst commented that 4G service providers should not set 4G service fees at high levels if compared with 3G. Qiu Heng from Huawei suggested that the 4G service fee should be $4 for 1GB, if the 3G service fee is $3 for the same capacity. If so, while the total 4G service fee is higher, the service fee per byte is lower. The business model has brought success in the US, Japan and China. Nguyen Ai Viet from the Information Technology Institute of the Hanoi National University said that once Viettel launches 4G, other telcos like MobiFone and VinaPhone will have to follow. He does not think the two mobile network operators would hesitate to provide 4G, as they want to take back the investment capital used to deploy 3G.
