5G to be a major contributor to countries’ GDP by 2040, chip making to take off

In Vietnam, 5G technology can help a number of industries and sectors that are important to the country.

According to British data firm IHS Markit, 5G will have a huge impact on the global economy, potentially bringing in around US$13.1 trillion in revenue and creating 22.3 million new jobs globally by 2035.

5G is expected to enable users to study, shop, and work in the shortest possible time. Under the right conditions, 5G download speeds can reach 10 gigabits per second, 100 times faster than 4G.

Deloitte's Technology, Media, and Telecommunications (TMT) Predictions for 2023 showed that 5G services could add up to $450 billion to India's gross domestic product (GDP) by 2040. The report said cross-sector contributions from productivity and efficiency gains across industries will accumulate into a major jump in GDP contributions.

Speaking at a press briefing, Peeyush Vaish, partner and telecom sector leader at Deloitte India, said the "real uplift in revenues will be visible only when the private networks are rolled out. We expect $10 billion to be spent over the next 3–4 years in terms of rolling out the network, barring the licence fee”.

The Telecom Regulatory Authority of India (Trai) has said that captive non-public networks (CNPN) or private networks should be given 40 MHz blocks in the 3700–3800 MHz and 4800–4990 MHz bands. For CNPN, work is also being done to figure out the reserve price and make the methods for allocating spectrum official.

The report said that more than 20 Indian companies, like Infosys, Capgemini, GMR, Larsen & Toubro, Tata Communications, etc., have already applied to get 5G spectrum for private networks in the country. But companies will have to wait until the rules for CNPN spectrum allocation are finalised by the government.

The most CNPNs are used in the US and Germany, where regulators have taken a multi-pronged approach by giving spectrum directly to businesses and telco players who offer different enterprise connectivity and private network services.

A boom in semiconductor manufacturing

The Deloitte TMT 2023 report predicts that India's semiconductor market will reach $55 billion by 2026. More than 60 percent of the market will be driven by three industries: smartphones and wearables, automotive components, and computing and data storage.

While the manufacturing sector for semiconductors is being dominated by countries such as Vietnam, Taiwan, and China, P N Sudarshan, partner and TMT leader at Deloitte India, said that "We have about 50,000 design engineers. On the other end, we have a very large electronics manufacturing services (EMS) ecosystem, which is very recent but has grown very dramatically over the last 10 years. What we lack in the middle stage is a semiconductor manufacturing value chain".

According to the French cyber company Thales Group, some tests have shown that 5G download speeds can reach 75 Mbps, making it possible to download a movie in 49 seconds. On the 4G network, this takes 50 minutes on average.

The development of 5G not only increases the amount of data that can be sent and received on cell phones, but it also gives high-speed wireless connections to many different sectors and industries, especially production lines that are automated and run by robots.

Also, according to IHS Markit, the five industries that get the highest revenue through the use of 5G are machinery manufacturing ($4,771 trillion), information and communication ($1,493 trillion), commerce and trading ($1,144 trillion), public services ($961 billion), and construction ($730 billion). 5G can also help build smart cities and smart governments. This means that people can get better public services through government-run real-time platforms.

In the early stages of 5G development, Vietnam will provide 5G services at industrial parks, schools, research institutes, and government agencies. The Vietnamese government aims for 100% of the population to have their devices connected to the 5G network by 2030./.