Minister Nguyen Manh Hung: Vietnam's telecommunications industry is aging rapidly if it does not innovate

The Vietnam Journal of Science and Technology respectfully introduces the speech of the Minister of Science and Technology Nguyen Manh Hung at the Conference.

Vietnam’s telecommunications industry is no longer as youthful as it once was; it is aging. Over the past decade, we have remained stable but lacked breakthroughs. We have maintained our position but have yet to open up new growth engines. The growth rate has consistently remained below 5%.

Telecommunications has fulfilled its historical mission and is now standing at a new crossroads. Our achievements are significant: universalizing connectivity, bringing the Internet to every citizen, and creating the foundation for national digital transformation. These are historical achievements.

However, the traditional growth model based on subscribers, traffic, and ARPU (Average Revenue Per User) has hit its ceiling. 3G, 4G, and 5G are merely higher "G", yet the new value created is not much. Telecommunications revenue is growing slowly, while data is exploding, AI is exploding, and the digital economy is booming. A paradox exists where telecommunications serves as the infrastructure of the digital era, yet it is growing slower than the digital economy itself.

The issue does not lie in technology but in the model. Vietnam’s networks are among the best in the region, and telecommunications enterprises possess strong engineering teams. However, the problem is that we are still thinking like a sector providing connectivity, while the world has shifted toward providing digital capacity.

If telecommunications only sells call minutes and gigabytes of data, prices will continue to drop, competition will become increasingly fierce, and value margins will thin out, leaving no capital to continue investing heavily in infrastructure.

Telecommunications can no longer survive solely by selling pipes!

It is time to transition Telco into Digital Infrastructure Companies. I want to emphasize a vital shift: Telecommunications is not just connection infrastructure; it must become the digital capacity infrastructure of the economy. This means not just selling bandwidth but providing Cloud-AI-Data-Security-IoT-Platforms. It acts like a new form of electricity for businesses and society. Telecommunications must become a comprehensive digital capacity provider, not just a network operator.

5G is not about being faster, it is about doing things that have never been done before. If 5G is only used for clearer videos or faster downloads, it will fail economically. 5G only becomes meaningful when it enters factories, seaports, logistics, healthcare, energy, and urban areas, becoming the infrastructure for high-value production and services.

This requires telecommunications to partner deeply with vertical industries, understanding production and operational problems, understanding customer costs, and co-creating solutions rather than just selling SIM cards. Carriers must become research and development entities rather than mere network operators.

Telecommunications cannot innovate alone, but it must be the trailblazer. Telecommunications possesses advantages few industries have: data, infrastructure, coverage, reliability, and an extensive apparatus. Therefore, telecommunications should not replace startups or compete with technology firms; instead, it must open its infrastructure, open API, share controlled data, and become the platform for the entire innovation ecosystem, supporting tens of thousands of creative digital technology enterprises to solve business and social problems.

Telecommunications becomes stronger not by doing everything itself, but by helping tens of thousands of other businesses do their jobs better.

The State will no longer keep telecommunications in a safe zone or within old management mindsets. It will shift from managing telecommunications infrastructure to governing national strategic infrastructure; from frequency management to frequency governance for development goals; from licensing to designing new rules of the game and sandbox.

The State will not act on behalf of businesses but will clear the institutional path for experimentation, new models, new services, and controlled failure. This will be the new profession of state management in telecommunications - moving away from licensing, checking SIM cards, and managing prices for voice and data or promotions.

Vietnam’s telecommunications industry is not weak, but it is aging very quickly, if it does not innovate, it will truly become an "old man".

Vietnam's telecommunications can absolutely enter a new growth cycle, a second renovation after the first one 40 years ago. This will not be achieved through more subscribers, but through more value for the economy and society. It means shifting from "alo" infrastructure, communication infrastructure to the infrastructure of the economy. Telecommunications in the next 10 years must connect not just people, but production, knowledge, and the future.

Telecommunications must become production infrastructure and knowledge infrastructure. State management must change institutions and management styles to facilitate this transformation. Telecommunications growth in the next 10 years must also reach double digits.

The postal sector, meanwhile, is experiencing a rejuvenation. In the last 10 years, the postal sector has grown rapidly, at 20 to 30%, thanks to e-commerce. However, if the postal sector does not innovate right now, it will eventually face the same problem as telecommunications - slowing down for a decade before finding new momentum.

Therefore, the postal sector needs to innovate while things are still good, starting now, to continue growing rapidly at 20 to 30% for another 10 years.

The focus must shift from letters and parcels to digital postal infrastructure, light logistics, digital addresses, postal data sharing, and new delivery technologies compatible with e-commerce and the digital economy. This involves creating a 3D postal space operating on land and in low-altitude airspace.

State management of the postal sector must open up new spaces for the sector to grow at least fourfold. By 2030-2035, the postal sector must be larger than telecommunications.

The most important transition is toward the digital post and digital space. We must expand new concepts in digital space, such as virtual warehouses.

The digital postal ecosystem includes delivery, logistics, digital addresses, digital data, order fulfillment, and warehousing infrastructure.

The postal network must evolve from the "last mile" into a complete network. Postal infrastructure should possess a network nature similar to a national telecommunications network, with large warehouses (akin to large switching centers) at regional hubs, smaller warehouses (akin to small switching centers) in provinces, and subscriber concentrators at the commune level, leading to the last mile.

The concept of digital addresses should be expanded from districts down to households and individuals, linked with digital maps, population data, and digital space.

Traditional delivery vehicles must be expanded to include new technologies such as drones and robots.

The shift must be from delivery to order fulfillment; from 2kg to 500kg; and from basic postal services like letter/postal parcel to e-commerce and home delivery in remote areas.

Consideration should be given to establishing a public postal service fund.

Post and telecommunications are a pair that ensures the flow of data and the flow of physical goods for the economy./.

Copyright belongs to the Vietnam Journal of Science and Technology (VJST-MOST).