The circular by the Telecommunications Agency, under the Ministry of Information and Communications, is set to come into effect next July to foster digital transformation by 2025.

The ministry is also pushing for the production of low-cost smartphones in the country.

Military-run telecom giant Viettel and smartphone manufacturer VinSmart, a unit of conglomerate Vingroup, have partnered to help users switch from feature phones to smartphones in nine localities.

State-owned telecom firm VNPT has also come up with solutions to help 2G subscribers switch to smartphones in five localities. Other network service providers like MobiFone and VietnamMobile are also providing similar solutions.

The Telecommunications Agency said that the smartphones being offered under such initiatives cost just VND500,000-600,000 and come with data discounts for low-income users in rural areas.

Meanwhile, cybersecurity company and smartphone maker BKAV has also begun developing feature phones that can connect with 4G networks.

The communications ministry has also ordered network operators to integrate the voice over LTE feature into their 4G network so that more users will use the technology to make phone calls instead of using the traditional network.

The ministry has permitted Viettel and MobiFone to commercially test 5G broadcasting in Hanoi and Ho Chi Minh City, and official licenses are set to be given next year.

As of September, there were 88 million smartphone users in Vietnam, up 14 percent year-on-year; 83 million of them 4G capable.

There were 24.67 million 2G users, down nearly 20 percent year-on-year, according to the ministry.