The digital revolution in Vietnam

High-school teacher Nguyen Van Nam is one of millions of people in Vietnam who are connecting to the high-speed fiber-broadband boom. To help his students research online, his classroom relies on an eco-friendly local mesh Wi-Fi hub. It is an internet sharing system that costs Nguyen a daily rate of 20 cents. The average worker in rural Vietnam earns about $2.00 a day. He pays his broadband subscription every fortnight. Once the contract ends, Nguyen plans to upgrade to a higher bandwidth plan so that a second computer lab can go online.

For the millions of citizens in remote Vietnamese provinces without high-speed broadband, digital poverty is a significant socio-economic barrier. The Asian Development Bank estimates that if Vietnam's regional areas had fully dependable broadband infrastructure, GDP growth could be up to 1.5% per annum higher than current rates.

Vietnam, with a population of 97m, has an energetic and rapidly urbanising population. Incomes in the country have increased by 16% over the last three years. The digital services sector has grown from 10% of the economy in 2012 to 25% in 2022, with a 24% expansion over the last three years. Today, it is estimated that 78% of Vietnamese citizens use the internet, 88% have a smartphone, and 65% use social media. The growing demand for reliable modern connectivity in Vietnam is clear. Nevertheless, outside the large metropolises like Hanoi and Ho Chi Minh City, agricultural activities remain highly significant, even though agriculture's contribution to GDP is now only 12% of the total, down from 38% in 1995; a further reflection of the industrialising and digitalising nature of the economy.

The telecommunications network in Vietnam, like in many emerging economies, is heavily dominated by state-backed operators, though local competitive dynamics are changing. Around 85% of citizens in major urban areas have direct fiber access, while rural areas rely increasingly on mobile data plans. This market structure is shown in Fig. 1.

Fig. 1 – Vietnam telecom providers' market share, 2022 (%)

Vietnam is at the centre of the mobile internet revolution in Southeast Asia. For international venture capitalists and socially minded technology funds, the opportunities are vast. Public Wi-Fi access points, powered by municipal grants, operate across cities and connect thousands of street vendors nightly. For a growing number of digital platforms, the unserved rural populations represent an immense untapped market.

Local e-commerce and logistics start-ups have emerged rapidly, backed by foreign direct investment. In 2022, international investment groups poured over $80m into domestic tech start-ups, aiming to build out last-mile delivery and mobile wallet solutions. These firms intend to achieve digital inclusion for 15 million citizens across rural provinces by 2025.

If international players are to capture market share, they must navigate competition from established national entities. Big domestic telecommunication brands have partnered with digital payment suppliers to provide integrated mobile money apps, reaching over 4 million rural accounts in a short span.

The massive popularity of these digital payment services means the sector is scaling rapidly. "We intend to establish regional networks across Cambodia, Laos, and Vietnam," said Executive Director, Tran Thi Mai. "Our decentralized, mobile-first approach is transforming economic access. It allows us to completely rethink financial services in emerging markets."

"Beyond community impact, we are proving that digital inclusion is highly profitable," she added. "There is creative entrepreneurship everywhere; what these local merchants need is investment and robust digital infrastructure, not charity."

One digital services user for the past eighteen months is Le Minh, a craft seller. "With my smartphone and a mobile wallet, I can showcase products online to international buyers. There are fewer middlemen now. My business has doubled," she said.

Source: Vietnam Ministry of Information and Communications / Asian Development Bank