Status and Investment Opportunities in 5G Technology Vietnam

A detailed overview of investment opportunities in 5G Technology in Vietnam and what foreign investors should place their focus on.

The Ministry of Information and Communications (MIC) has set ambitious goals to make the 5G network available across Vietnam by 2022. Moreover, it also aims to increase the number of digital enterprises from 58,000 to 100,000 by 2025. Several telecom operators have been granted licenses by MIC to provide 5G technology in Vietnam. 

The government is taking various steps to implement the national digital transformation process as part of its efforts to create a digital Vietnam. There are many components of a digital society, including an electronic economy, a digital government, and a digital society. An official press release announced that the ministry also plans to amend laws on telecommunications, e-transactions, and posts in order to facilitate digital transformation and create favourable conditions for Vietnam’s economy to grow and catch up with the global trend of digitalization. 

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5G Commercialization in 2022

As stated earlier, the Ministry of Information and Communications has identified its tasks and directions for 2022. It aims to disperse 5G services via devices developed in the country. However, due to limited infrastructure, only 25% of the population will have access to this service by 2025. The Public Telecoms Fund should be used wisely for remote areas via effective propaganda campaigns so that the public supports telecoms development in accordance with regulations. According to a telecommunications industry expert, now is the right time to invest in Base Transceiver Station (BTS), as the cost of these devices is quite reasonable, along with the reuse of existing telecoms networks. In 2021, 75% of the country’s population owns a smartphone, increasing by  16% since 2018. Considering this growth and the MIC’s plan to phase out outdated mobile technologies by 2022, most Vietnamese will have smartphones by 2023, making 5G commercialization inevitable.

5G Infrastructure in Vietnam

Viettel, MobiFone, and Vinaphone, the top three telecom operators in Vietnam, have been testing 5G in 16 different cities and provinces. Along with high-demand areas like industrial parks, 5G services will be launched in major cities.

In Vietnam, commercial 5G services were expected to launch by 2020, but the pandemic caused multiple delays, and the rollout has been delayed until 2022. It is noteworthy that Vietnam’s telecom operators have agreed to share 5G infrastructure with one another. By streamlining their capital investments related to 5G, telcos (providers of telecommunications services) will be able to reduce costs. 

In addition, Vietnam Telecom, the country’s largest telecom operator, has built its own 5G network and equipment. In order to ensure the security of its networks, it might avoid partnering with overseas companies. Vietnam’s government is promoting a shift to high-tech manufacturing while promoting 5G services to boost the country’s digital economy. 

Plan for Nationwide 5G coverage by 2030

According to several reports, mobile operators will price their services at the same level as current 4G services. The SIM cards will not need to be changed. With the deployment of 5G, Vietnam’s digital economy is expected to reach USD14 billion in 2020.

5G will contribute 7.34% of GDP in 2025, according to estimates. Despite its ambitious timelines, the country has high expectations for 5G in the medium term. Considering Vietnam missed its 5G commercialization deadline in 2021, perhaps some caution is in order.

As part of efforts to accelerate digital transformation, the government has started a number of initiatives, including boosting tourism management and promotions, infrastructure investment, digitizing the postal sector, digitizing the logistics sector, and boosting e-commerce. To develop the sector, and enable meaningful digital transformation, it is critical that these government programs are met as a first step.

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Potential for Global Cooperation and Incentives of 5G Technology in Vietnam

It has been noted that 5G technology is of particular interest to the agriculture industry as well as the high-tech sector, including smart factories and smart cities. With the help of the Vietnam Telecommunications Authority, 5G will be deployed primarily in industrial and high-tech parks, as well as urban centers with high densities and central business districts in major cities.

The country’s mobile and fixed broadband infrastructure will continue to improve, contributing to its development. A strong communications network is vital to the development of the digital economy. In order to take advantage of technologies like the Internet of Things (IoT), artificial intelligence, big data, network security, digital identity, digital government, and electronic payment platforms, widespread, fast, and affordable connectivity is required.

Law often lags behind technological advancements. Vietnamese data protection law could be amended in the near future, potentially restricting the free flow of information. It remains to be seen what the implications of data-intensive technologies powered by 5G will be. To bolster investor confidence and drive innovation, there is a need for a clear and robust legal framework.

Vietnamese and foreign businesses have a great deal of room for cooperation. Five-generation (5G) mobile networks will offer high capacity and ultra-low latency, making AI-enabled technologies and IoT applications meaningful across various use cases and sectors. Businesses will use 5G as a means of processing and analyzing more data, thereby increasing revenues and valuations as they become better suited to monetize large amounts of data.

Latest technologies powered by 5G will expand the mobile ecosystem to new industries. Globally, the digital economy is projected to reach USD13.1 trillion by 2035. Fifth-generation connectivity is expected to drive much of this growth. 5G coverage will help develop precision agriculture, intelligent manufacturing, digitalized education, construction and mining, connected healthcare, intelligent retail, and connected smart cities. Five-gigabit-per-second 5G networks will revolutionize container ports, warehousing and logistics, airports, hospitals, hotels, manufacturing, and agriculture. 

Vietnam shall follow other countries’ steps to quicken the commercialization of 5G. For instance, approximately 700,000 base stations serve approximately one billion people in China. China Mobile, meanwhile, reported an increase of 13% in revenue from 2020 to 2021. Operators see an increase of around 20% in average revenues per user.

Thailand’s transition to a smart healthcare system is facilitated by Siriraj Hospital’s use of 5G. More than 50 5G applications within healthcare are being tested by the hospital and Huawei, a 5G infrastructure vendor. Contactless delivery of medications is possible with robotic-guided vehicles powered by 5G.

Private 5G networks can also be deployed in manufacturing plants and logistics hubs, aside from the healthcare sector.

Trends such as the metaverse may accelerate the transition to mass 5G adoption as data transmissions increase, requiring lower latencies, higher bandwidths, and more reliable network connections.

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Tomas Svoboda - Cekindo - Vietnam Country Manager

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Ing. Tomas Svoboda

Tomas is an expansion manager responsible for Vietnam. His role is to define the key potential of the Vietnamese market and to ensure that Cekindo branch in Vietnam provides its clients with smooth and hassle-free market entry solutions.