5G Projected to Contribute 7.34% to Vietnam's GDP Growth

10:39:27 AM | 31/3/2021

5G is expected to contribute to 7.34% to GDP growth by 2025. The Government and the Ministry of Information and Communications are taking momentous decisions to promote large-scale 5G testing, commercialize and use Made-in-Vietnam equipment.

Telecom is key infrastructure of digital economy

Vietnam's digital economy reached a total value of US$14 billion, over US$2 billion more than last year, according to the report on Southeast Asia’s internet economy 2020 released by Google, Temasek and Bain. Of all digital service consumers in Vietnam, 41% are new, the highest among surveyed countries in the region.

According to the General Statistics Office (GSO), Vietnam is one of three Asian countries with positive growth, with an economic size of more than US$343 billion (Singapore: US$337.5 billion and Malaysia: US$336.3 billion). The Government of Vietnam determined that one of the pillars of the digital economy is telecommunications infrastructure, including mobile broadband and landline broadband.

Speaking at the World Mobile Broadband & ICT Conference 2021 recently held in Hanoi by Vietnam International Data Group (IDG Vietnam) in collaboration with the Radio and Electronics Association of Vietnam (REV), Deputy Minister of Information and Communications Phan Tam said that telecommunications infrastructure is becoming the foundation infrastructure for the digital economy, digital society and digital government. 5G mobile broadband and landline broadband will play an important role in Vietnam development. Experiences from developed countries are also showing that there are great opportunities for the digital economy and digital transformation powered by 5G technology, broadband infrastructure in particular and digital infrastructure in general.

In fact, in the past 2-3 years, broadband infrastructure development has paved the way for many other economic sectors to develop. By the end of February 2021, in Vietnam, landline broadband subscribers exceeded 17.2 million and mobile broadband subscribers reached nearly 69.5 million (data from the Vietnam Telecommunications Authority). In particular, within two months, revenue of telecommunications services increased by nearly 28% on Covid-19 pandemic impacts, and was expected to keep growing in the coming months.

However, according to many experts, in order to further promote the digital economy and realize the goal of the national digital transformation project to 2030, long-term investment strategy is needed.

Commercializing Made-in-Vietnam 5G equipment

The Ministry of Information and Communications licensed three operators - Viettel, Mobifone and Vinaphone - to test 5G commercialization. REV President Tran Duc Lai said, in the past time, these operators have deployed 5G and achieved very positive results. From 2021, Vietnam will test 5G on a large scale, one of the first steps to achieve the goal of becoming one of the countries to successfully test 5G technology in the world. At the same time, it will use “Made in Vietnam” 5G devices of high quality and cost-effectiveness.

In addition to infrastructure development and coverage expansion, Vietnam is also particularly interested in applying 5G to boost agricultural production and high-tech industries and regards telecom infrastructure development as a decisive factor to take long strides to seize the best opportunities of the Fourth Industrial Revolution, he said.

Agreeing with this point of view, Deputy Minister Phan Tam added that science, technology, innovation and digital transformation are strategic breakthroughs of the next 10-year stage to make Vietnam a top middle-income country by 2030 and a high-income industrial country in 2045. In that context, the Ministry of Information and Communications determined to keep tune with the world and actively commercialize 5G in Vietnam.

Regarding the continued expansion of the 5G commercialization, the representative of Viettel Network Corporation (VTNET) said Viettel is currently applying for a license from the Vietnam Telecommunications Authority (Ministry of Information and Communications). In March and April 2021, Viettel will launch a 5G commercial trial in some provinces such as Da Nang, Hai Phong, Can Tho, Quang Ninh and Vinh Phuc. Previously, this operator broadcasted 5G in Hanoi, Ho Chi Minh City, Bac Giang, Bac Ninh and Binh Phuoc. Many ICT experts predicted that this move of Viettel will lead to a race in the 5G trial commercialization from other carriers such as VinaPhone or Mobifone.

Regarding challenges of 5G expansion in Vietnam, according to Michael Jiang, Chief Technology Officer (CTO) of Huawei Vietnam, Vietnamese carriers will face a lot of challenges such as infrastructure, service delivery time, cost optimization or user experience.

Mr. Nguyen Phong Nha, Deputy Director of the Vietnam Telecommunications Authority, recommended that Vietnamese carriers need to research new telecommunications services for 5G to grasp new opportunities such as 3-way telecommunications services, digital twin system, and IoT industry with cloud computing.

By Ha Linh, Vietnam Business Forum