Revenue of information, communication and technology (ICT) firms was estimated to have fallen by 30-90% in the first quarter of the year due to the COVID-19 pandemic.

ICT companies are facing decreased revenue due to the COVID-19 pandemic.
— Photo cafef.vn

This information was released in a report prepared by the Ministry of Information and Communications (MIC) to submit to the Prime Minister at a conference held on May 9.

The ministry said many contracts and projects of ICT companies were cancelled or halted because of the pandemic. Others were facing capital shortages while some lacked imported materials and spare parts as well as labourers.

MIC said most of local ICT businesses’ partners come from the US, Japan, the Republic of Korea and European countries. However, these countries have been facing the crisis caused by the novel coronavirus. Therefore, it was difficult to seek or maintain customers.

Customers also reduced the number of their projects. Those from Europe cut their existing contracts by 60-70% while customers from the Asian region fell 40% since March. In addition, new projects which had been under negotiation were halted.

The ministry said the online entertainment segment such as social networks and video platforms reported less ad revenue despite the increasing number of new users. Companies decided to temporarily halt their marketing strategies amid the pandemic. It was forecast that the revenue of online advertising would be reduced by 15-20%.

The same situation has been seen in the online game market as the revenue in the first quarter of this year would be also lowered by 10 to 20% in comparison with the same period last year. The country’s game industry depends on foreign partners, mainly those from China.

The postal sector reported decreased revenue of 10-20% a month as travelling among localities was limited due to social distancing.

To untie the difficulties of businesses in the ICT sector, the MIC proposed to accelerate administrative procedure reform, enhancing the IT application in public services.

Financial packages to support enterprises should be launched while developing policies to keep prices of inputs stable.

It also proposed to promote public investment in co-operation with mobilising investment from the private sector and creating markets for businesses. The Government should further promote development of start-ups and innovation firms in the digital technology sector.

MIC asked the Finance Ministry to add some enterprises in the ICT sector to subjects entitled to enjoy extensions for paying tax and land rental as well as considering exemptions and reductions of corporate income tax.