Information Communication Infrastructure Master Plan Approved
The Prime Minister of Vietnam has approved a plan to develop Vietnam’s information and communications infrastructure. Here are the details.
Earlier this month the Prime Minister of Vietnam issued Decision 36/QD-TTg (Decision 36) approving the Information And Communication (IC) Infrastructure Plan For The Period Of 2021 – 2030, With A Vision To 2050. This plan sets out the path forward for the development of Vietnam’s IT infrastructure as it moves toward a high-tech future.
Specifically, the document lays out key goals and frameworks for providing greater data security and efficient data management, but also to facilitate greater development of Vietnam’s IT industry.
Here are the details.
Decision 36 lays out several key targets for the postal service. These include:
- Reach a capacity of 93,000 tons of mail every day;
- To limit the time it takes for inter-provincial and international parcels to travel between postal centers to a maximum of five days; and
- To limit intra-regional delivery time to a maximum of five days.
For Vietnam’s digital infrastructure, the Decision sets out the following goals:
- 100 percent of households to have access to fiber optic cable;
- 90 percent of households to have access fixed internet with an average speed of 200 megabits per second;
- 90 percent of enterprises, schools, hospitals, and offices in urban areas to have access to the internet at an average speed of one gigabit per second.
- Mobile broadband to have an average download speed of 40 megabits per second for 4G networks and 100 megabits per second for 5G networks;
- 100 percent of the adult population to have a smartphone;
- All high-tech parks, information technology parks, research, development and innovation centers to have access to the internet at a minimum speed of one gigabit per second;
- To add two to four international internet cables;
- For there to be 1 million domain names ending in ‘.vn’ and for those 1 million domains to account for 60 percent of the domain names in use in Vietnam; and
- For Vietnam to be among the top 50 on the Information and Communication Technology Development Index determined by the International Telecommunications Union.
- The fixed broadband network to offer 100 percent of users \access at speeds above one gigabit per second;
- For 5G mobile broadband network coverage to reach 99 percent of the population; and
- To add from four to six more international undersea fiber optic cables.
Data center and cloud computing infrastructure
Vietnam has also recently identified cloud computing and data centers as key areas for development. Decision 36 sets out the following goals for this sector.
- Build three national multi-purpose data center clusters;
- Add one or two regional data centers that will be specifically for Vietnam’s financial centers; and
- For 70 percent of Vietnamese businesses to use cloud computing services provided by Vietnamese firms.
Foreign investment in IC infrastructure
These goals and objectives present broad opportunities for foreign firms. This includes both providing software and service as well as building the aforementioned infrastructure. That said, there are some limitations on foreign investment in the sector.
Foreign firms can only own a maximum of 65 percent of non-facilities-based telecommunications services. However, a foreign form can own up to 70 percent of a virtual private network. That said, for signatories to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) there are no foreign ownership restrictions.
When it comes to facilities-based telecommunications services foreign ownership is more limited. Firms from most countries can own up to 51 percent of a company providing facilities-based communications services. Again, these limits are more favorable for members of the CPTPP. Partner nations in this agreement can own up to 65 percent.
There are also several key regulations that may prove to be key growth drivers for telecommunications infrastructure. Two of the most important are data protection and localization requirements.
Personal Data Protection Decree
Regulations on the protection of personal data are outlined in Decree No. 13/2023/ND-CP. This decree covers the rights and responsibilities of individuals and organizations involved in data collection and processing, whether they are providing or requesting data. This includes how long it can be stored by which organization and how it should be handled in the event it is no longer needed.
Vietnam recently introduced new data localization regulation requirements that would see both domestic and certain foreign companies required to store the personal data of Vietnamese clients locally. This particular legislation is mostly directed at foreign firms operating in Vietnam; however, it indicates how data should be treated and for what purposes data might be used (by law enforcement most prominently) in the country.
Decree 36 lays out a number of key goals and targets for the IC industry in Vietnam. These goals provide a framework for development within which foreign firms may find lucrative business opportunities. Firms looking to enter this market should contact the business advisory experts at Dezan Shira and Associates for on-the-ground support and advice.
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Dezan Shira & Associates provide business intelligence, due diligence, legal, tax and advisory services throughout the Vietnam and the Asian region. We maintain offices in Hanoi and Ho Chi Minh City, as well as throughout China, South-East Asia, and India. For assistance with investments into Vietnam, please contact us at email@example.com or visit us at www.dezshira.com.
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