To achieve this, it has proactively implemented supportive policies and decisions, such as the National Digital Transformation Programme, and created a National Committee on Digital Transformation to spearhead digitalisation goals.
This holistic drive towards digital transformation has already yielded positive results. Vietnam has the fastest-growing digital economy in Southeast Asia, which hit $23 billion in value this year, and is set to achieve over $50 billion by 2025. This is largely credited to a thriving e-commerce sector, supported by increased efforts to drive digitalisation among the nation’s small- and medium-sized enterprises (SMEs).
With 5G connectivity the next frontier for digital transformation, Vietnam is already ahead as a regional frontrunner in this space. It is one of the first Southeast Asian countries to deploy 5G trials and has declared its intent to achieve national 5G coverage by 2030. However, it is essential to lay the connectivity groundwork to ensure a seamless 5G commercial rollout, and collaboration between the government and local communication service providers (CSPs) will be instrumental to achieving this.
The explosive popularity of e-commerce in Vietnam, which is expected to be worth $39 billion by 2025 – has spurred more digital-centric behaviour among Vietnamese consumers, such as greater adoption of online shopping and digital payments. Simultaneously, a stronger push for digitalisation is also happening across Vietnam’s banking and finance, tourism, healthcare, and other sectors.
While these sectors are determining the best way forward in digitally transforming their operations, it is necessary to first establish seamless, widespread nationwide connectivity to sustain the momentum of this digital transformation push.
Vietnam’s growing digital population reinforces the need for this focus on telecommunications infrastructure enhancement; by 2021, the country already had 70.9 million mobile broadband subscribers, with internet users accounting for two-thirds of the population and internet traffic growing by 40 per cent that year.
To further drive this digital transformation, the government has made it a core mission to provision 5G services through locally-developed devices this year to accelerate its push towards 5G commercialisation.
As of mid-2022, the 5G network has been successfully piloted in at least 40 cities and provinces in Vietnam. However, 5G services will only be deployed to a quarter of the national population by 2025 due to infrastructure limits.
These limitations require both the government and CSPs to invest more into upgrading and widening domestic and international bandwidth, updating the capacity of modern devices, and – for CSPs – cooperating and sharing 5G telecommunications equipment and infrastructure to spur growth.
With 5G’s low latency and fast speed, its successful commercial rollout would further amplify the benefits of digitalisation for Vietnam. 5G will be able to unlock the country’s ability to participate in new digital industries, such as cryptocurrencies and fintech, as well as encourage greater innovation in traditional sectors including health and education.
In addition, it would enable different stakeholders in Vietnam to leverage 5G to their advantage. For example, there is significant opportunity in the nation’s agriculture sector – where digitalisation is still nascent – for new digital farming technologies to improve the productivity and resilience of farmers. Farmers in Dalat are already using artificial intelligence to analyse crop production and leveraging drones to carry out heavy-duty farm work.
Another example would be Vietnam Posts and Telecommunications Group exploring the deployment of 5G private wireless networks at transportation and logistics hubs to create smart ports and airports in the country. Besides ensuring the highest levels of speed, availability and reliability for mission-critical connectivity, especially in high-traffic areas, it would also enable visitors and employees to leverage smart apps and features to optimise their experience.
As a manufacturing hub, Vietnam will also benefit greatly from smart factories, which would require the low latency and high throughput that 5G networks offer to cater for multiple Industry 4.0 technologies and create a more productive, safe environment. As it is, the northern province of Vinh Phuc has already announced a smart factory development project to help SMEs improve their productivity and product quality.
With the progress that Vietnam has already made towards its digital transformation goals, achieving nationwide 5G rollout is the next obvious step. However, this first requires stakeholder cooperation to work together in enhancing the nation’s digital infrastructure, as only equitable access to consistent, high-speed connectivity can be the catalyst for further digital growth.
CSPs must recognise the transformational role they play in supporting Vietnam’s digital ambitions and be ready to work with all stakeholders to achieve a digital future. They can take a leading role in developing Vietnam’s digital infrastructure, building new innovations in communications technology, and educating the market in the adoption of Industry 4.0 technologies. Their support will be instrumental to helping one of Southeast Asia’s fastest-growing digital economies achieve its full potential.
Author: Rubén M. Flores, general director, Nokia Vietnam
Design: Hung Nguyen