Market Trends of Vietnam ICT Industry
IT and Infrastructure Services (Including Cloud) Are Expected to Drive the Market
- The demand for cloud computing technology is increasing in the country as cloud solutions providers offer several benefits. However, this exposes hosted data to severe risks such as privacy and identity theft. As part of national goals for digitalization, the Ministry of Information and Communications (MIC) aims to expand the market share covered by domestic CSPs (cloud service providers) to 70% by 2030, which would support the market growth of ICT infrastructure services in Vietnam.
- Vietnam's evolving digital landscape and surging appetite for cloud services make it an ideal choice for upcoming data centers. With the market poised for expansion, bolstered by heightened infrastructure and tech investments, Vietnam's foothold in cloud computing is set to strengthen. In June 2024, after establishing five data centers in Southeast Asia, Huawei considered Vietnam the location for its next data center, signaling the growing attractiveness of Vietnam's cloud computing market.
- Additionally, in June 2024, Deputy Minister of Information and Communications Phan Tam underscored the substantial investment prospects within cloud computing infrastructure and encouraged the openings for US cloud companies to set up large-scale data centers in HCMC and Danang in the country, which would support the market growth in the future.
- The country recorded a significant number of domestic transactions via the Internet and mobile banking in Vietnam, increasing the demand for ICT infrastructure developments for high-speed Internet connectivity to support online banking services in Vietnam.
- The expansion of global data center infrastructure in Vietnam shows the potential for future growth of IT infrastructure services, which may fuel market growth. For instance, in May 2024, ST Telemedia Global Data Centres (STT GDC), one of the world’s fastest-growing data center providers, announced a joint venture partnership with VNG Corporation, a leading technology company in Vietnam, for the development, construction, and operation of data center projects in Ho Chi Minh City, Vietnam, creating a growth opportunity for the market.
Understand The Key Trends Shaping This Market
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The IT and Telecom Segment is Expected to Hold a Significant Market Share
- The IT and telecom industry verticals have witnessed rapid growth. In the 2023 GSMA Mobile Economy, the Vietnamese government announced plans to upgrade mobile infrastructure and make 5G universal by 2030, offering new services and improved networks. This would support the expansion of mobile network infrastructure development in the country, driving overall market growth.
- Expanding network infrastructure, including fixed and wireless broadband, is a long-term trend boosting market growth. The country's telecoms network infrastructure has expanded to cover 100% of communal-level localities. The 2G, 3G, and 4G mobile networks cover 99.8% of the population, while 5G has been piloted in 16 provinces and cities. Such government initiatives would create new growth opportunities for telecom service providers.
- Furthermore, the government plans to replace the 3G and 4G network coverage with 5G. The Ministry of Information and Communications (MIC) reported that it finished installing 5G stations using open radio access network (ORAN) technology, with download and upload speeds of 900 Mbps and 60 Mbps, respectively. This shows the market's future growth potential.
- Vietnam plans to invest in two to four additional international telecommunications cables, each with a data capacity of 60 Tbps, by 2025. Additionally, per the government-approved plan announced by the Ministry of Information and Communications, the new cables would prioritize connections to areas with existing stations and central islands, showing the increasing ICT infrastructure development projects in the IT and telecom industry verticals. This is expected to boost the growth of the market during the forecast period.
- The growing mobile data and fixed broadband segments in Vietnam are expected to increase the country's total telecom services revenue. The country's growing adoption of 4G services, the projected rise in 5G subscriptions, and the growth in the mobile data average revenue per user (ARPU) with high upload and download speed show the ICT infrastructure investments in the fixed and mobile telecommunication sector in the country.
