Vietnam’s telecommunication market is becoming more attractive to foreign investors as it has returned to the growth path in the first half of 2019 after a long period of saturation.
According to a press release, foreign investors have big opportunities in Vietnam’s growing telecom sector. This is because the government considers it a key driver for the country’s digital economy and will step up the divestment from state-owned telco corporations.
According to experts, the government’s plans for the Fourth Industrial Revolution, smart cities, start-ups, and the National Innovation Network Program, enabled by state-of-the-art 4G and 5G, IoT, and mobile telecommunication networks, are helping the ICT sector continue to record strong revenue growth.
There is room to grow for foreign investors in Vietnam’s telecommunication industry. The number of households with internet access at home is only 27 per 100 households while only 9.3% of Vietnamese households have a fixed-line telephone, an industry expert said.
The number of mobile subscribers with a 3G data connection is also still below the world average (39 subscribers per 100 people) while the number of subscribers with a 4G data connection is much lower and the 5G network has only been deployed on a trial basis in Vietnam.
Data demand is on the rise in the country and will keep increasing in the near future, according to estimations from the Ministry of Information and Communications (MIC). Telecom experts said that the number of 4G subscribers will increase by over nine-fold from 2019 to 2024.
Also, the government is working to finish the divestment from the country’s giant telco corporations, in 2019 and 2020 to meet the country’s commitments in newly signed trade agreements.
Besides, opportunities exist for foreign exporters in providing equipment and infrastructure and value-added services, such as developing wireless and alternative broadband technologies as well as partnering with established network operators to provide 3G, 4G, and 5G services.
Additionally, since the satellite-based telecom market is not yet developed in Vietnam, it is expected there will be an opportunity for foreign companies to provide satellite services into the country on a cross-border basis.
Vietnam’s telecommunication market is expected to develop further as carriers are racing to test and roll out 5G services.
A MIC report showed that the total number of mobile subscribers in the first six months of 2019 reached 134.5 million, up 12.3 percent over the same period of last year. Such a high figure indicates a recovery in the market after a long period of sluggishness.
Analysts said that such a positive result was due to several major policy changes taken by the MIC, first of which is the mobile number portability service introduced in late 2018.
Besides, the MIC licensed 5G trials to three major carriers, giving way to a technological race which is expected to become fierce in the months ahead. Military-run Viettel has announced the successful testing of the fifth-generation wireless technology in Hanoi and is expanding trials in Ho Chi Minh City.
The MIC has also worked with the Vietnamese central bank to formulate a plan that allows mobile carriers to pilot mobile payment, a move lauded as a breakthrough to help reduce cash payments, make the national financial market more transparent, and open new growth opportunities for mobile carriers.