Southeast Asia Will Be a Collateral Winner of the 5G Race

Sintia Radu

While superpowers are fighting for world dominance in the upcoming fifth-generation cellular network technology race, smaller nations may also see some benefits. Countries across Southeast Asia, where giants like Huawei and Nokia are rushing to implement 5G networks, are seeing increased perks and profits in a region that's being strategically contested between the United States and China, say experts.

The 5G services rollout could bring about a $900 million boost for Malaysian telecom companies beginning 2025, according to a study by management consulting firm A.T. Kearney, commissioned by Cisco. Other countries in the region also will see gains.

"In the Association of Southeast Asian Nations (ASEAN), 5G has a wealth of potential for operators," according to the study. "In fact, 5G could add 6 to 9 percent to consumer revenues and 18 to 22 percent to enterprise revenues by 2025."

Indonesia is expected to be the biggest winner, the report adds, followed by Malaysia, Singapore, and Thailand. Malaysia is also the latest business target for Finnish telecom giant Nokia in its race for 5G expansion. On Nov. 1, reports showed that Nokia targeted Malaysian ports and has been trying to get a share of the country's 5G market, facing competition from China's Huawei that has sealed 5G deals with other telecoms firms in Malaysia.

"All these countries are rolling out 5G infrastructure and each of these economies wants to be prepared for that next generation of wireless," says Martijn Rasser, senior fellow in the Technology and National Security Program at the Center for a New American Security. "Right now there's only 3 main players in 5G, Huawei being the big one, and then Nokia and Ericsson and to a certain extent Samsung."

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In order to achieve success in the Southeast Asian market, operators will need to invest about $10 billion by 2025, says consulting firm A.T. Kearney. Yet the profits will be worth it, with 5G being a technology that will highly improve various industries, say experts. "The benefits include its high speed, low latency, and high throughput, which enable data flows at vastly greater speed and volume than today's 4G networks," says the Center for a New American Security in a new report on 5G.

Southeast Asia is particularly interesting as this is an area where both China and the United States have strategic interests. On one hand, China sees this region as an extension of its own economy in which Huawei should be a top player, Rasser says. On the other hand, the United States prefers Huawei gained less ground in this 5G space for military and national security concerns.

"Whoever controls the 5G will get tremendous influence in global economics, military and political affairs," Rasser says. "And that's the big competition going on between China and the U.S., where the U.S. doesn't want Huawei on the global 5G network because of the national security risks."

Sintia Radu is an international affairs and global technology reporter at U.S. News & World Report. She previously reported on business and technology for the Washington Post and the St. Louis Post-Dispatch. She served as the managing editor for Esquire Romania. She graduated from the Bucharest Academy of Economic Studies, and earned her Master of Arts in Journalism at the University of Missouri. She is a fellow of the National Press Foundation for a program on the impact of artificial intelligence. She was part of the 2016 Women in STEM cohort at Chicago's 1871 technology and entrepreneurship center, and helped design a multiple award-winning iOS/watchOS app profiled in the 2017 Associated Press report on The Future of Augmented Journalism. She is a Fulbright scholarship recipient and gave a TEDx talk on immigration and diversity. Follow her on Twitter, connect with her on LinkedIn, or email her at sradu@usnews.com.