Vietnam Goes 5G: A Vital Step Towards A Digital Future

Vietnam's Mobile Technology Landscape

Vietnam's smartphone usage has surged to 84.4%, surpassing the global average of 63%. The IT and telecommunications sector aims for 100% smartphone penetration by the end of 2024. Data fees remain low-about half the global average-ensuring widespread internet access for all.

As of early 2023, Vietnam boasts 161.6 million mobile connections, covering an impressive 164% of the population. There are 77.93 million internet users, with social media engagement at 71% of the total population.

The Ministry of Information and Communications reports that the digital economy accounted for 16.5% of Vietnam's GDP in 2023, with projections rising to 18.6% in 2024. The growth of digital payment systems has empowered small and medium-sized enterprises (SMEs) to reach wider audiences without physical payment infrastructure.

According to the Ministry of Information and Communications, 4G coverage in Vietnam is currently 99.8%, higher than even developed countries with high incomes with only 99.4%. This is a step forward for 5G to be commercialized in Vietnam just a few months ago in October.

The Rise of Mobile Technology in Vietnam

Early Beginnings: 2G Era

The journey began in 1993 with Mobifone launching the first commercial mobile service, followed by Vinaphone in 1996. These services utilized GSM (Global System for Mobile Communications) technology, setting the stage for future advancements.

The rise of mobile technology has also sparked a cultural transformation in Vietnam. Mobile phones have become symbols of modernity and status, reshaping social dynamics and consumer behavior. At its peak, Vietnam had over 18 million active 2G subscribers as of January 2024.

Vietnam officially switched off 2G mobile signals on October 16, 2023, marking the end of an era with about 416,000 active 2G subscribers remaining as of October 14.

Transition to 3G and 4G

3G, or the third generation of mobile communications, revolutionized connectivity in Vietnam when it was officially launched in 2009. Enabled by major telecom operators like Viettel, Mobifone, and Vinaphone, enabled users to transmit voice and data, including emails, images, and videos, transforming their interaction with technology.

Although 3G services began appearing in various projects from late 2006 to early 2008, VinaPhone was the first to achieve coverage in 13 provinces, including Hanoi and Ho Chi Minh City, in October 2009, followed by MobiFone in December. With download speeds ranging from 200 Kbps to several Mbps, 3G greatly enhanced user experiences compared to the slower 2G network.

In late 2016, Vietnam launched its first commercial 4G services, again led by major operators. This transition spurred the rapid development of mobile applications, fueling e-commerce platforms like Tiki and Shopee and enhancing services like Grab with faster data speeds.

Remarkably, despite being a low-middle-income country, Vietnam 4G coverage surpasses even many high-income nations. This achievement reflects the IT and telecommunications industry's commitment to ensuring all users have access to smartphones by the end of 2024.

The Commercialization of 5G in Vietnam

5G, known as "the network of networks," integrates existing technologies for real-time connectivity, enhancing safety and security while reducing greenhouse gas emissions through improved energy efficiency and less travel.

On October 15, Viettel officially launched Vietnam's first 5G network, just six months after receiving its frequency license. With over 6,500 base stations, Viettel's 5G service now covers all 63 provinces, including industrial parks, tourist areas, seaports, airports, hospitals, and universities.

This launch coincides with the 20th anniversary of Viettel Mobile, marking a significant milestone in Vietnam’s mobile evolution. The 5G network offers speeds of 700 Mbps to 1 Gbps - up to ten times faster than 4G - with near-zero latency.

The Vietnamese government is upgrading digital infrastructure by deploying new international undersea fiber optic cables and developing data centers by 2025. Viettel plans to install over 3,000 transmission stations to ensure comprehensive 5G coverage nationwide by the end of 2024.

In Vietnam, projections indicate that 5G technology could contribute approximately 7.34% to GDP growth by 2025, significantly enhancing productivity across various industries.

Moreover, an Ericsson study suggests that 5G could boost GDP growth by 0.3% to 0.46% by 2035, with a cost-to-benefit ratio of three to seven times the initial investment. The shift to higher bandwidth and lower latency will drive innovations in IoT (Internet of Things), smart cities, autonomous vehicles, and telemedicine, fostering economic diversification and resilience.