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Vietnam Plans Greater Investment in Internet Infrastructure

The Internet infrastructure in the country is set to receive considerable investment in 2022 to meet users’ growing demands. The number of Internet subscriptions in Vietnam hit a record last year with nearly 71 million mobile broadband subscriptions and 18.8 million fixed ones. Respectively rising 4% and 14.6% from 2020. Internet users accounted for two-thirds of the population. Internet traffic also grew strongly, by over 40%, in 2021.

Telecom businesses stepped up developing broadband infrastructure. So far, the 5G network has been piloted in 16 provinces and cities, 4G covers 99.8% of the population, and cable Internet services reached 100% of communal-level localities. This is according to data from the Authority of Telecommunications, which runs under the Ministry of Information and Communications (MIC).

Although there has been steady growth, repeated breakdowns of undersea international cables greatly affected the domestic Internet quality. There are five undersea cable routes currently operating in Vietnam, namely AAG, SMW3, IA, APG, and AAE-1. Two others, SJC 2 and ADC, are scheduled to be put into use in 2022 and 2023. Meanwhile, other countries in the region have more routes such as Singapore (30), Malaysia (22), and Thailand (10). Compared to them, international infrastructure serving internet connection in Vietnam remains modest, a report stated. Experts believe that it is crucial to develop infrastructure for international Internet connection on par with regional countries.

Deputy Director of the Telecommunications Authority, Nguyen Phong Nha, stated that to improve broadband Internet quality, the government should focus on upgrading bandwidth and modem devices’ capacity, widening domestic and international bandwidth, and amending standards. Apart from investing in Internet infrastructure, telecoms services suppliers should also prepare backup plans. Developing digital infrastructure, including the Internet, telecoms, and cloud computing infrastructure, is set to be among the country’s top priorities between now and 2025. This will also create a big opportunity for service providers, infrastructure developers, and operators to compete equally with transnational enterprises in Vietnam.

The country had earlier set an ambitious target for the digital economy to account for 20% of the GDP by 2025. However, the Deputy Director of the Department of Enterprise Management, Nguyen Trong Duong, believes that with a breakthrough scenario, the Vietnamese digital economy could account for 26.2% of the GDP in the next three years. He stated that this will be possible if digital transformation and digital economy development are strongly deployed, accompanied by measures to ensure a market balance between domestic digital enterprises and foreign counterparts. The government would also formulate policies to support Vietnamese technology start-ups. 16% of the 26.2% would be from information communication technologies (ICTs), telecommunications, and the Internet economy.

At the beginning of the year, OpenGov Asia reported that the government aims to have ten technology firms with annual revenue of over US$1 billion by 2025. It plans to have 100,000 digital technology firms by 2025 and have at least ten firms compete in global markets. It also wants to have 10 localities with revenues of over US$1 billion from ICT and 10-12 IT zones. Last year, the total revenue of Vietnam’s ICT segment was estimated at an all-time high of VND3,462 trillion (US$151 billion), growing 9% year on year. The ICT segment alone contributes over US$136 billion to the sum, increasing by some US$11.5 billion from last year, according to MIC data.

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