During the pandemic, Vietnam has recorded the highest number of new internet users in the Southeast Asian region, with a total growth of 41 percent and bringing the country's digital economic value to USD 14 billion. Additionally, Vietnam is among the three Asian countries that succeeded in ending 2020 with a positive note, reaching more than USD 343 billion economic scale - moderately higher than Singapore and Malaysia.
Starting in 2021, the Vietnam telecommunications authority has emphasized building smart cities through defining telecommunication infrastructure by jumpstarting broadband development as the building block of all other economic sectors. So far, the country has enabled local network operators to deploy 5G network services through initial testing before implementing it on a large scale. The presence of 5G network service is crucial given the rising numbers of Vietnam's broadband subscribers, who had recently accounted for nearly 69.5 million people.
The use of the 5G network service will apply to various kinds of industries. Still, the country's government has expressed high interest in implementing the technology in agriculture, eventually establishing the fourth industrial revolution and covering all existing sectors in Vietnam. Albeit its nascent stage, the 5G network is forecasted to contribute over 7.34 percent to the GDP by 2025. The reason being the 5G would act as the backbone of Vietnam's initiative to become a digital society by allowing the installation of the Internet of Things (IoT), big data, network security, e-identity, and various e-payment variations.
The government has also acknowledged the Vietnam communications industry, merging two of the famously-used government-owned providers, VNPT and MobiFone. The two companies have launched their plan to obtain robust growth and raise overseas capital, further stimulating innovations, technology, and knowledge transfers, and gaining leverage in the market.
Vietnam telecom market is fragmented by FPT, CMC, Hanoi Telecom, NetNam, and several foreign firms with high barriers to new players exploring the venture. With the significant developments of telecommunication infrastructure taking place, the country's telecoms industry has brought fortunes for the three dominant players taking most of the market share. However, the opportunities in the Vietnam telecoms industry lie in the provision of telecommunication equipment, infrastructure, and value-adding services. Thus, international telecoms players are entering the dynamic industry through investments in established local players and tapping into service segments that still allow competition, such as data centers, cloud systems, and platform services.
Additionally, satellite-based telecommunication services also play a part in attracting investments. Vietnam has not established any satellite services and is therefore open for exploration in the particular area. The government expects European Union (EU) based telecom services companies to support the country's growing industry through the EU-Vietnam Free Trade Agreement (EUVFTA).
The recent EUVFTA will allow EU companies to bring their technological expertise and innovation to multiple Vietnam industries, including the telecommunication industry. The agreement had increased the urgency for local players to retain their market share before the opportunity realization by foreign companies and pushed them to reconfigure their long-term strategy in winning the telecoms wallet share.
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