Vietnam Communication Services Market Outlook to 2030

Vietnam Communication Services Market Overview

• The Vietnam Communication Services Market is valued at USD 4.1 billion, with its growth driven by a combination of factors including rising internet penetration, the adoption of advanced telecommunications infrastructure, and government initiatives that encourage the expansion of mobile and broadband services. Additionally, a growing demand for high-speed connectivity, especially in urban centers, further supports market growth, reflecting a trajectory built on historical growth over five years.

• In terms of geographical dominance, Ho Chi Minh City and Hanoi lead the market, mainly due to their higher population densities, economic activities, and tech-savvy populations that require advanced communication solutions. These cities benefit from greater infrastructure investments and government support, making them hubs for broadband and mobile internet growth. Their advanced digital economy and large urban populations drive demand, cementing their status as leaders in the country's communication services landscape.
• Launched in 2024, the Vietnamese government allocated $2 billion to its Digital Transformation Program, which aims to increase internet and mobile network coverage, especially in underserved areas. This initiative provides financial support and incentives for companies to expand communication services to rural areas.

Vietnam Communication Services Market Segmentation

By Service Type: The market is segmented by service type into mobile communication services, fixed-line communication services, and internet and data services. Mobile communication services hold a dominant market share due to Vietnams high mobile penetration rate and increasing demand for mobile internet services. The expansion of 4G and 5G networks across major cities and rural areas contributes significantly to this segment's strength, meeting the demand for connectivity on the go and appealing to a tech-savvy population.

By Technology: The market segmentation by technology includes 3G, 4G, and 5G networks. Currently, 4G technology dominates the landscape, given its widespread availability and compatibility with a vast array of devices. The rapid rollout of 5G technology, however, is expected to bring significant shifts in the near future. The government's initiatives to promote digital transformation and improved mobile internet infrastructure are instrumental in the ongoing expansion of 5G, with urban centers like Ho Chi Minh City leading the adoption.

Vietnam Communication Services Market Competitive Landscape

The market is dominated by a few key players, including local giants such as VNPT Group and Viettel Group, which have established strong footholds through extensive network coverage and government support.

Vietnam Communication Services Market Analysis

Market Growth Drivers

• Increasing Mobile Subscriber Base: Vietnam's mobile subscriber base grew by 7 million from 2023, reaching 150 million active users by mid-2024. This rise reflects a demand for enhanced communication services, driven by the governments digital transformation initiatives and the growing need for mobile connectivity, especially in urban and semi-urban regions.
• High Internet Penetration: As of 2024, Vietnam's internet penetration rate reached 78 million users, with nearly 80% of the population actively using online services. The countrys broadband expansion, supported by the governments "National Digital Transformation Program," is fueling the adoption of communication services as internet users increasingly seek reliable voice and video communication options.
• Rising Demand for Cloud-Based Communication Services: Cloud communications usage in Vietnam expanded in 2024, with over 40,000 businesses adopting cloud-based solutions for their operations. As more enterprises in the country seek flexible communication options that enable remote working, the demand for such cloud solutions continues to grow, providing a significant boost to the communication services market.

Market Challenges

• Inadequate Infrastructure in Rural Areas: Despite Vietnam's robust urban communication network, rural areas remain underserved. In 2024, it was estimated that over 40 million people still lack access to reliable internet connectivity, leading to limited adoption of communication services outside major cities. Addressing this gap will require substantial infrastructure investments.
• High Cost of Service Upgrades: Service providers in Vietnam face high operational costs for infrastructure improvements, with estimated expenditures reaching $1.5 billion in 2024 alone for expanding 5G networks and upgrading existing 4G infrastructure. These costs create barriers to affordable service provision, particularly for smaller communication service companies.

Vietnam Communication Services Market Future Outlook

The Vietnam Communication Services industry is set to experience growth over the next five years, fueled by the continued expansion of 5G networks, increased government support for digital transformation, and a rising demand for cloud-based communication solutions.

Future Market Opportunities

• Expansion of Rural Connectivity: Over the next five years, the Vietnamese government and private sector are expected to invest an additional $5 billion to expand network infrastructure in rural areas, aiming to provide communication services to over 30 million people currently lacking access. This will likely bridge the urban-rural digital divide and contribute significantly to the markets growth.
• Growth in 5G Adoption for Enterprise Applications: By 2029, 5G adoption among Vietnamese enterprises is expected to grow, reaching 60% of large businesses. This shift is anticipated to support the demand for high-speed communication tools essential for real-time data applications and advanced video conferencing solutions.