Vietnam’s growing economy has greatly strengthened the development of the ICT (Information Technology & Communication) sector, especially as Vietnamese firms are increasingly integrated into the global economy. The ICT sector continues to be a key growth priority of the Vietnamese Government. Access to and adoption of ICT has been considerably high in Vietnam over the past decade. Improved telecommunications infrastructure has enabled most households and citizens to have access to land lines, mobile phones and internet connections (ADSL/fiber cable) although land lines are shrinking; yet further infrastructure investment is still needed.
The telecoms sector is increasingly liberalised and less dominated by state owned enterprises. Opportunities are getting more and more abundant in telecoms as well as other areas of ICT for foreign investors. There are many encouraging signs that Vietnam is working toward building an advanced infrastructure that will be attractive to foreign firms. Vietnam is developing the telecommunications infrastructure necessary to support continuing economic growth and foreign investment.
According to White Book of Information Technology and Communication published by the Ministry of Information Technology and Communication, in 2012, the number of mobile phone users reached 131 million (up 3.2% from previous year). Internet users accounted for 35.3% of the population (31.3 million people), with nearly 3.67 million subscribers of broadband Internet (xDSL, CATV, leased line, etc.). International internet bandwidth (bit/s) per user reaches 4,898 bit/s.
The rapid urbanization of the population has led to greatly modernized and populated cities with extensive communications infrastructure. Yet much of rural Vietnam remains a largely untapped market for IT and telecommunications networks, which offers strong growth potential. About a third of the country’s villages lie in remote mountainous areas that still lack infrastructure or access to IT and telecom services, presenting opportunities to address this issue and expand investment in the country.
Telecommunication companies (telcos) are facing a new challenge to their business model as Vietnam subscribers are now giving up traditional data services like short message service (SMS) or multimedia messaging service (MMS) in favor of making calls and sending messages through over-the-top (OTT) applications. There will be increasing partnership structure between OTTPs and local telcos in the coming years, which will bring win-win solutions for both categories of players.
Regarding internet connection services, broadband should maintain healthy growth in the near future. The privatization and restructuring of VNPT (the State-owned giant player) has been mentioned recently and it could bring about increased revenues as well as the arrival of new skills. Broadband enjoys a high penetration in major urban centers but it is highly dependent on DSL.
The 3G market is looking quite bright, thanks to operators’ recent aggressive price competition to pursue customers. The Ministry of Information and Communication has also announced that the deployment of 4G services will be put on hold until 2018 to allow operators to recoup their investments in 3G services.
The government is devising new policies and working on major economic restructuring with a focus on stabilizing the economy rather than pushing for stronger economic growth. It is also addressing rampant corruption and promoting significant administrative reforms, particularly in the state-owned sector, which will hopefully turn the current situation around, attract more FDI into the country, and boost the economy in the right direction.