With the characteristic of being an economic – technical industry associated with science and technology and also one of the industries most affected by the Industrial Revolution 4.0, Viet Nam’s telecommunications industry cannot stay out of the transformation trend, especially when traditional telecommunications services are already at saturation level.
Viet Nam is one of the fastest growing telecommunications markets in the region and the world in recent years. Years before 2010s saw a rapid increase in the number of participants in telecommunications services in Viet Nam. At the end of 2005, Viet Nam had only 15.8 million telephone subscribers, including 8.7 million mobile phone subscribers and 7.1 million fixed telephone subscribers and 210 thousand internet subscribers. By 2010, there are 125.9 million telephone subscribers, 8 times more than in 2005, of which the number of mobile phone subscribers was 111.5 million, 12.8 times higher and 14.4 million fixed telephone subscribers, twice compared to 2005. The number of internet subscribers is not much but it has grown very fast during this period. In 2010, although there were only 3.7 million fixed broadband internet subscribers but it was 17 times higher than in 2005. Along with that, telecommunications revenue also experienced a very positive growth. Telecommunications revenue in 2010 reached 177.8 trillion dongs, maintaining the growth rate of over 40% for many years. By the period 2011-2015, the telecommunications and internet infrastructure was constantly being modernized and developed synchronously with nationwide coverage thanks to the successful launch and put into use of Vinasat-2 and VNREDsat-1. The number of telephone subscribers continued to increase strongly in the first years of the period but gradually decreased in the following years, of which there was a sharp decrease in the fixed telephone subscribers. 2012 was the year with the highest number of phone subscribers ever, reaching 141.2 million subscribers; in 2015 it decreased to 129.4 million subscribers, of which the number of mobile phone subscribers in the respective years are 131.7 million subscribers and 123.9 million subscribers; the number of fixed telephone subscribers is 9.6 million and 5.4 million. The number of telephone subscribers in this period achieved an average increase of 0.5%/year, of which mobile subscribers increased by 2.1%/year and fixed telephone subscribers decreased by 17.7%/year. In contrast, the number of fixed broadband internet subscribers still maintained a relatively high growth rate, increasing by nearly 16% per year on average, reaching 7.7 million subscribers in 2015. Telecommunications revenue in the period 2011- 2015 continued to maintain a fairly high growth rate, nearly 60% in 2015 compared to 2010, an average annual increase of nearly 10%.
However, in recent years, the telecommunications market is facing saturation of traditional telecommunications services. The number of fixed telephone subscribers tends to decrease sharply, by the end of 2020, there are only 3.2 million subscribers, down 41% compared to the same period in 2015 and down 78% compared to the same period 2010. The operation of the fixed telephone service segment is now only in moderation, mainly serving agencies, government organizations, businesses, and the percentage of fixed telephone subscribers in households is very small. It is worth noting that the number of mobile phone subscribers has been in a state of saturation. As of the end of 2020, the whole country has 123.6 million mobile phone subscribers, which is only close to the number of subscribers in 2015. In addition to the recent decrease in demand, it is also due to telecommunications businesses handle garbage subscribers according to the regulations of the Ministry of Information and Communications. However, the internet services segment still has a lot of potential for telecommunications businesses to exploit. The number of internet subscribers continues to maintain a high growth rate for many years. By the end of 2020, there were 16.7 million fixed broadband internet subscribers, 2.2 times higher than in 2015, an average annual increase of 16.9%. Broadband connection speeds have also improved, but are still slower than in many other countries. Telecommunications revenue in the years from 2016 to 2018 maintained a relatively high increase of nearly 8% compared to the previous year, but in 2019 it only increased by 2.6% and in 2020, due to the impact of the Covid-19 epidemic, telecommunications revenue has fell sharply by 13.6%, reaching only 315.2 trillion dongs. Facing the reality with nearly 124 million mobile subscribers, larger than the current population of more than 97.6 million; the market share is almost fixed, so the telecommunications businesses can only improve their business results by maximizing the added value on existing subscribers. Along with that, the fierce competition for market share makes telecommunications businesses have to continuously deploy preferential packages, reduce telecommunications charges, and at the same time, at the same time, constantly improving service quality is really a big challenge. In addition, revenue from traditional telecommunications services is also greatly influenced by the popularity of free calling and messaging OTT applications. Securing positive returns from the traditional telecommunications market will become increasingly difficult.
Digital transformation, the digital economy is currently a global trend, an irreversible process. With the emergence of the industrial revolution 4.0 and the push of the Covid-19 pandemic, the world is at a breaking point of the digital transformation process, accelerating digital transformation. Decision No. 749/QD-TTg dated June 3, 2020 of the Prime Minister approving the “National Digital Transformation Program to 2025, with orientation to 2030” has made Viet Nam one of the first country in the world issue a program on National Digital Transformation, which is a favorable condition for businesses to actively exploit the opportunities brought by the technological revolution. With the goals: “Viet Nam is in the group of 70 leading countries in e-Government (EGDI)”; “Digital economy accounts for 20% of GDP”; “Fiber broadband network infrastructure covers over 80% of households, 100% of communes” and “Popularity access 4G/5G mobile network services and smart phones”, telecommunication enterprises and digital enterprises have a lot of space for development.
Seizing the opportunities from the industrial revolution 4.0 along with the urgent requirements of the Government, businesses as well as the whole society, Vietnamese telecommunications businesses have also made strong changes from traditional telecommunications service suppliers into digital service providers. According to statistics from the Ministry of Information and Communications, the whole country currently has about 58,000 digital technology enterprises in operation, and in 2020, there was 13,000 new digital technology enterprises born. According to experts’ forecasts, digital transformation and e-commerce will continue to thrive in 2021 and create new impetus for economic growth. At the same time, this is also an opportunity for Vietnamese enterprises to develop new business strategies.