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Digital transformation contributes $139 mn to Vietnam

The Vietnamese information technology (IT) and telecom sectors have witnessed significant growth over the year, emerging as a “bright spot amid the COVID-19 pandemic”, according to a press release by the Ministry of Information and Communications (MIC). Local companies have quickly optimised opportunities to move ahead and develop sustainably.

The release cited data from the BIDV Securities Company (BSC), explaining that the pandemic has sped up investment in technologies for many businesses, which has facilitated the development of tech enterprises that have provided solutions, platforms, services, and products for digital transformation.

Digital transformation contributed VND 3.21 trillion (US$139 million) to turnover, up 31% against 2019. The turnover for the tech sphere, in particular, was around VND 13.9 trillion (US$603 million), up 23% year-on-year. Customer numbers also grew nearly 19%, while the number of projects worth millions of US dollars rose nearly 29%.

BSC said it hopes domestic enterprises with “Made in Vietnam” products will be prioritised in the government’s digital transformation project. Tech bidding packages are expected to be stepped up this year due to public and annual investments in technologies. Packages for 11 road routes will focus on services such as smart transport, administration, management, and automated toll collection.

Fixed broadband and 5G services will also drive growth among businesses operating in the telecoms sector. MIC said the sector earned more than VND 130 trillion (US$5.6 billion) last year, up 0.3% against 2019. Between 2016 and 2020, fixed broadband rose 15% each year while mobile broadband grew 22%. As of January, Vietnam had more than 1 million km of cable spanning all villages, communes, and wards. Mobile phone services covered 99.81% of the national population, while 98% of the population had access to 3G and 4G services.

Major telecoms providers like Viettel, Vinaphone, and MobiFone will expand 5G services nationwide. The providers had piloted 5G programmes last year. To promote 5G development, the ministry has proposed that the government issue a decree on radio frequency fee collections and the auction and transfer of the right to use radio frequencies.

The deployment of 5G services is hoped to accelerate the building of e-government while serving as a prerequisite for promoting telecoms infrastructure and helping businesses with digital transformation, the release said.

Telecom firms posted strong growth last year despite COVID-19. The rising move towards digital transformation is expected to help such firms as FPT and CMC benefit from software exports. FPT’s growth remained in the double digits last year despite the pandemic, with turnover at VND 29.83 trillion (US$1.29 billion) and pre-tax profit VND 5.26 trillion (US$228 million), increases of 7.6% and 12.8%, respectively

The turnover for state-run organisation Viettel exceeded VND 264 trillion (US$11.4 billion), a year-on-year increase of 4.4% and representing 102.4% of the annual target. Pre-tax profit was VND 39.8 trillion (US$1.7 billion), up 4.1% and 103.9% of the annual target. The group posted growth of 6.4% in the telecom sector; nearly double the global average.

Its overseas investment also rose 24.4%, or six times higher than the global average, earning it nearly VND 42 trillion (US$1.8 billion). The Vietnam Post and Telecommunications Group (VNPT) also recorded positive growth, with total turnover hitting VND 162.7 trillion (US$7 billion).

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