4. What is the digital economy?
All businesses and services that have a
business model based primarily on selling or servicing digital goods and
services or their supporting equipment and infrastructure. (G20 and Oxford Dictionary)
The digital
economy includes emerging phenomena such as blockchain-based networks, digital
platforms and social media, e-businesses (e.g. e-commerce, parts of traditional
sectors which use digital-enabled technologies in Industry 4.0 or precision
agriculture); businesses involved in the development of software, apps and
other content and media creation, and associated training and services; and
businesses engaged in creating and manufacturing ICT equipment.
5. Vietnam Policies supporting the
digital economy
The Vietnam
Government views digital transformation across the broader economy as critical
to continued growth and prosperity. Its commitment is seen in the number of
policies, master plans and directives published over the last 30 years that
have stressed the need to invest in critical infrastructure, build the ICT industry, promote e-commerce, and adopt technology as a means of lifting
productivity.
These
directives and decisions address the need to dramatically expand Vietnam’s
national information infrastructure, strengthen its human resource base
(especially IT professionals), and liberalize its legal and regulatory
environment to encourage greater foreign investment and in the ICT sector.
The Vietnam
Government has also linked increased innovation (including the development of
the digital economy) as a driver of economic growth, with increasing creativity
and experimentation, and a culture of openness and freedom.
6. Supportive telecommunications
infrastructure
6.1 Expanding digital
infrastructure and coverage
Reliable
telecommunications infrastructure is critical to the development and expansion
of the digital economy in Vietnam. Existing infrastructure has so far
accommodated the voracious demand for bandwidth, but issues are arising with
dropouts from undersea cables, local congestion on the network, and mobile
phone connectivity and coverage.
6.2 Backbone
infrastructure
The backbone
Internet network in Vietnam is built on fibre optic technology using dense
wavelength division multiplexing and synchronous digital hierarchies. One
overland and six submarine cables connect Vietnam to the rest of the world. The
submarine cables include the Asia America Gateway (AAG) cable, which runs via
Hawaii to the USA; the Intra Asia cable; the SMW3 cable (Southeast Asia, Middle
East, Western Europe); and TVH cable (Thailand, Vietnam, Hong Kong). Most of
the country’s connectivity relies on the AAG cable. Unfortunately, it seems to
be the least reliable connection, and has already suffered serious outages.
The Vietnam
National Internet Exchange (VNIX) was launched in 2003. It transfers domestic
Internet traffic between service providers across three regions: the North
(Hanoi), the South (Ho Chi Minh City) and the Middle (DaNang). In January 2018,
the VNIX bandwidth was 211 Gbps with total network traffic reaching nearly
40 million gigabytes.
In 2008 Vietnam
successfully launched its third satellite service, the Vinasat I satellite, to
supplement terrestrial Internet connections and reach areas that are too
expensive to connect via overland cables. However, while Vinasat I has high
capacity and can transmit Internet services to all regions of the country,
satellite signals tend to be weaker and less reliable in a range of weather
conditions.
6.3 Mobile phone coverage
and spectrum use
Terrestrial 3G
mobile wireless services were launched in Vietnam in 2009 and 4G services were
licensed in early 2016. In October 2016 four telecommunications companies were
granted licenses to install 4G LTE networks, with a view to supporting Internet
of Things applications and Smart City infrastructure. These networks are
currently being rolled out.
In early 2018
the mobile network covered all 63 provinces of Vietnam: 43,000 4G stations have
been deployed nationwide, covering 95% of the country’s population. Vietnam
also has plans to introduce 5G networks by 2020. Viettel, VNPT and Mobifone are
the dominant companies in the telecommunications market, together holding more
than 90% of total market share.
Despite the
improved Internet coverage, a substantial gap remains in access to mobile
broadband services between remote rural or mountainous areas and urban areas.
6.4 Connection speeds and
network security improving
With average
download speeds of 9.5 Mbps, Vietnam is ranked ninth in the Asia Pacific region
and 58th in the world in terms of average connection speed, above China,
Malaysia, Indonesia and the Philippines.
Vietnam has a
growing number of secure Internet servers. These are critical to e-commerce as
they encrypt online transactions, helping customers to trust and engage with
online retail. However, at 19 secure Internet servers per 1 million people
Vietnam still has significantly less
secure servers per capita than the world average (215), South Korea (2201) and
Thailand (33). It is close to the number in China (21), and greater than
Indonesia (10).
6.5 Spectrum use and
allocation
Spectrum
allocated for use by the mobile phone and broadband sector in Vietnam sits in
the 630 MHz range. Economic returns are higher than for spectrum allocated for
other purposes, such as radio and television. Some US$5021 million economic
benefit was generated by the mobile network spectrum in 2015. This is expected
to reach US$8211 million in 2020. The efficiency of the mobile spectrum has
increased over time.
There is
increasing demand for more spectrum to be allocated for mobile broadband use. Mobile
subscriptions have grown by 2 million per year since 2012, and millions of new
services are predicted to come online over the next decade. It is highly likely
that most people connected to the Internet in the future in Vietnam will be
connected through mobile devices alone. The expanding Internet of Things will
create further traffic and congestion on the existing spectrum allocated for
mobile use. It is estimated that around 75% of connections in 2020 will be to
machine-to-machine devices via short-range wireless services.
Source: Vienam Today – Data61 - 2018
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