Vietnam’s Internet Infrastructure Improving

Posted by Reading Time: 4 minutes

14986552030_492492e31e_o (1)The AAG (Asia America Gateway) cable came into operation in 2009 with a total length of 20,000 kilometers, connecting Southeast Asia to the U.S., across the Pacific Ocean via Guam and Hawaii. The cable has landing points at the USA, Hawaii, Guam, Philippines, Hong Kong, Malaysia, Singapore, Thailand, Brunei and Vietnam. It has the largest capacity among other three systems including IA (Intra Asia), SMW3 (Southeast Asia – Middle East – Western Europe 3), and TVH (Thailand-Vietnam-Hong Kong).

In 2014, Internet users in Vietnam accounted for a population penetration of 39 percent, out of 90.73 million people in the country. The AAG cable alone may not meet the demand of over 35 million Internet users in Vietnam, especially as Vietnam’s internet infrastructure has suffered of late. Killer bites from shark attacks have reportedly damaged its underwater cable infrastructure, and several ruptures have happened in 2015 on January 1, April 23, and May 26. The cable breakdowns have greatly affected Internet traffic in Vietnam, and it often took at least three weeks to fix the cable. Currently, the AAG cable is completely fixed but due to its instability, the cable was temporarily suspended for ten days for repair and maintenance, starting from June 7.

Professional Service_CB icons_2015RELATED: Dezan Shira & Associates’ Pre-Investment Strategy Advisory

According to Akamai Technologies’ First Quarter 2015 State of the Internet Report, Vietnam reached 3.2 Mbps average internet connection speed in the first quarter of 2015, up 19 percent quarter-on-quarter and 57 percent year-on-year. This is faster than averages in the Philippines (2.8 Mbps), India (2.3 Mbps) and Indonesia (2.2 Mbps). Vietnam’s average speed climbed up from 2.7 Mbps in the fourth quarter of 2014 and reached a highest speed of 21.3 Mbps in Q1, up from 17.3 Mbps in Q4 of last year.

Poor Internet connection has caused difficulties for local users and significantly impacted many businesses, particularly reducing their productivity. In a country where the online marketplace is booming, Vietnam is improving its internet infrastructure to satisfy the needs of both local and foreign individuals and companies.

According to Mr. Lam Quoc Cuong, a representative of Vietnam Posts and Telecommunications (VNPT), four major telecommunications companies in Vietnam, including VNPT, Viettel, Japan’s NTT Docomo, China Telecom, and China Unicom have invested in a new 10,400 kilometer-long cable called Asia Pacific Gateway that runs between Da Nang City, Singapore, Japan and Malaysia. The additional undersea cable is expected to come into operation next year with a speed of 54 terabytes per second, much faster than the AGG cable with only 2.88 terabytes per second. Another 25,000-kilometer cable known as the Asia Africa Euro 1 will also become operational in 2016, connecting Vietnam with Europe, as stated by Mr. Pham Dinh Truong, a representative of Viettel. The Ministry of Information and Communications also announced in April 2015 that Vietnam would build a new land-based Internet cable through China, instead of an undersea one.

Related Link Icon-VBRELATED: Vietnam Online: Understanding Vietnam’s E-Commerce Market

Along with the newly installed cables and good maintenance of the AAG cable, Vietnam is expected to minimize network connection problems and enhance Internet speed for users. While Vietnam is improving the stability of existing cables and building new ones, companies operating in this country need to focus on technical mechanisms and personnel training in information technology skills, and develop network resources such to secure information in the case of cable rupture.


Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email or visit

Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.


Related Reading Icon-VB

Import and Export: A Guide to Trade in Vietnam

In this issue of Vietnam Briefing Magazine, we provide you with a clear understanding of the current business trends related to trade in Vietnam, as well as explaining how to set up your trading business in the country. We also attempt to give perspective on what will be Vietnam’s place in the Association of Southeast Asian Nations (ASEAN) in 2015, and look at some of the country’s key import and export regulations.

Tax, Accounting, and Audit in Vietnam 2014-2015
The first edition of Tax, Accounting, and Audit in Vietnam, published in 2014, offers a comprehensive overview of the major taxes foreign investors are likely to encounter when establishing or operating a business in Vietnam, as well as other tax-relevant obligations. This concise, detailed, yet pragmatic guide is ideal for CFOs, compliance officers and heads of accounting who need to be able to navigate the complex tax and accounting landscape in Vietnam in order to effectively manage and strategically plan their Vietnam operations.
E-Commerce in Vietnam: Trends, Tax Policies & Regulatory Framework
In this issue of Vietnam Briefing Magazine, we provide readers with a complete understanding of Vietnam’s e-commerce industry. We begin by highlighting existing trends in the market, paying special attention to scope for foreign investment. We look at means for online sellers to receive payment in Vietnam, examine the industry’s tax and regulatory framework, and discuss how a foreign retailer can actually establish an online company in Vietnam.