On 10 May 2019, Vietnam became one of the first
countries to successfully establish a 5G-powered phone call. It was a milestone
for the country given Hanoi’s ambitious plan to deploy a 5G network for
commercial operations by 2020 using domestically-developed technology. But
while Vietnam’s 5G rollout is on the right track, fully realizing this ambition
still requires overcoming myriad challenges in technology, national security
and governance.
Heralded as a revolution in network speed, latency and
coverage, 5G opens up massive business opportunities in a wide range of fields
such as virtual reality, intelligent manufacturing, smart cities, immersive
education, digital health care and driverless cars. 5G’s huge potential has
catapulted a global race to gain first-mover advantage.
While late to 4G deployment, Vietnam has been quick to
join the 5G race. A largest carrier in
Vietnam has invested US$40 million in 5G since 2015. The company has vowed to
self-develop 80 per cent of core network infrastructure by 2020, with a further
aim to become a global 5G supplier. In 2019, a Vietnam’s largest conglomerate
announced plans to launch its new 5G smartphone in US and EU markets by 2020.
More broadly, the country enjoys a booming tech start-up scene and a
rapidly-expanding tech user-base, both eager to take advantage of 5G benefits.
The incumbent government deserves some credit for
Vietnam’s 5G progress. Since taking office in 2016, government leaders have prioritized
technology as the key engine of economic growth, with 5G serving as the most
important foundation for the digital transformation process.
The government has introduced a series of
tech-supporting policies. These include Resolution 41 in 2016 on tax incentives
for IT development and application and Decree 13 in 2019 which provides
corporate income-tax remissions and credit incentives for science and
technology enterprises. Government-led initiatives — such as Project 844 which
supports the start-up ecosystem — are catalyzing the surge of tech start-ups in
the country.
On the human-resources side, computer science and
other STEM subjects are emphasized right from elementary school, while
innovation partnership programs with tech companies are modernizing the
country’s top engineering and technical vocational institutions. As Asia’s
hottest destination for foreign direct investment, the country also benefits
from skilled-employee training initiatives by multinationals.
But while Vietnam is on track to roll out 5G by 2020,
maintaining a reliable network and developing local 5G manufacturing
capabilities are a different story.
The country is no stranger to cyberattacks and
cybercrimes, suffering the eighth highest malware infection rates globally in
2016. More than 18,000 websites with the national .vn domain have been hacked
since 2010, including almost half the websites of state agencies. The rapid
deployment of 5G will expose Vietnam’s already vulnerable networks to even more
cyber-threats. Being an early adopter of this evolving technology means that
the country will have to find its own solutions to many of these problems.
The key to winning the 5G race, and to limiting its
security risks, is ensuring that all stakeholders — from regulatory bodies to
individual tech users — are well-prepared for the advent of 5G. While the
government has been active in promoting both tech-supporting and cybersecurity
policies, the effectiveness of these policies often remains in doubt.
Resolution 41 in 2016, for example, promised a 50 per cent reduction in
personal income tax for individuals working in hi-tech sections of the IT
industry. It also promised a preferential corporate income tax of 10 per cent
for IT start-ups. Three years later, not a single firm nor individual benefits
from this incentive scheme.
The 2018 Cybersecurity Law has also had questionable
effects. It requires all foreign online service providers to store the data of
users in Vietnam locally for cybersecurity purposes. The security benefits of
this law are unclear given Vietnam’s vulnerable ICT infrastructure, and this
mandate will undoubtedly obstruct free data flows and raise the cost of doing
business in the ICT sector.
Despite initial achievements, Vietnam’s 5G ambition
still faces a mountain to climb. The most important next step is for the
government to go beyond promoting policies. It should begin effectively
implementing, evaluating and revising policies that reward innovation, strengthen
cybersecurity and prioritise the growth of domestic firms. Winning the 5G race
is only meaningful if all stakeholders — state, businesses and individuals
alike — can reap benefits from the digital transformation process.
About us : TMA Solutions was established in 1997 to provide quality software outsourcing services to leading companies worldwide. We are one of the largest software outsourcing companies in Vietnam with 2,400 engineers. Our engineering team was selected from a large pool of Vietnam IT resources; they are well-trained and have successfully completed many large and complex projects. Visit us at:https://www.tmasolutions.com/
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