Wider development space in need for tech titans to grow

FPT Corporation, one of Vietnam’s biggest technology firms, last week announced its business performance in the first five months of the year with impressive results. It made revenues of over $705 million and pre-tax profits of almost $132 million, up 22.2 per cent and 24.7 per cent on-year, respectively.

Notably, revenue from technology soared 23.5 per cent on-year to more than $398 million, making up 56 per cent of the group’s total revenue. Strong growth in the US (55.6 per cent) and Asia-Pacific (57 per cent) greatly contributed to these results. Like FPT, other Vietnamese technology firms such as VNPT, Viettel, and MobiFone are said to be performing well, though they have yet to announce official statistics.

According to the Ministry of Information and Communications (MIC), players in Vietnam’s ICT sector are estimated to have reached a total revenue of around $57 billion in the first five months of 2022, up 8.5 per cent from the same period last year. During the span, export turnover of hardware and electronics was estimated at nearly $44.8 billion, representing 30.1 per cent of the country’s total export value.

Statistics from the MIC also showed that as of the end of April, the number of digital technology enterprises has reached over 66,000, up nearly 550 from March, showing a strong interest in ventures in this burgeoning sector.

Vu Kiem Van, deputy general secretary of the Vietnam Digital Communications Association, told VIR, “The result is attributed to growing demand for digital transformation at home and abroad. And the trend will continue in the months to come. Better performance is predicted in the upcoming months.”

Van added, “International ICT giants are raising investment in Vietnam. In the meantime, Vietnamese technology giants tend to venture further in the overseas market and gain success, with Viettel and FPT being outstanding examples. International cooperation is now a strong focus among them to increase their footprint, and will intensify in the future.”

In late May, the local technology market witnessed FPT Software entering a strategic partnership with Silicon Valley startup Landing AI to tap into both sides’ AI capabilities and promote the adoption of computer vision across all industries. This strategic alliance is expected to not only extend these capabilities but also enable the company to expand its large customer base globally. Landing AI is one of the international partners that FPT has hooked up with in recent months. In March, FPT signed an MoU with Sierra Leone to accelerate the national digital transformation and training of human resources in the West African nation.

The intensifying of international partnership also enables Viettel, VNPT, and MobiFone to grow at home and overseas. In particular, VNPT this month announced it was working with Amazon Web Services in developing digital transformation solutions for government agencies and businesses in Vietnam. The partnership reinforces VNPT’s strategy toward increasing international cooperation so as to venture further into the national digital transformation.

In mid-May, VNPT also signed an investment cooperation agreement on 5G network development with Casa System Group in Washington D.C. The partnership with Casa Systems is the next step in VNPT’s digital infrastructure development roadmap to explore, exploit, and apply techniques and technologies in Vietnam’s 5G network development in the context that Vietnam is going to commercialise 5G.

VNPT is also cooperating with Qualcomm in developing 5G products and services, and Ericsson in an Industry 4.0 partnership.

Viettel has also entered partnerships with several international tech firms. In 2021, it signed an agreement with Samsung on digital transformation in Vietnam, while last year also saw Viettel, Ericsson, and Qualcomm work together to research, test, and establish a 5G data transmission speed of over 4.7Gbps. This is 40 times faster than 4G and twice as fast as currently available 5G speeds.

Qualcomm is among international tech titans that have strongly developed cooperation with Vietnamese giants such as Viettel, VNPT, MobiFone, BKAV, and VinFast to expand its presence. Ericsson also does so similarly.

In anticipation of its growth potential, FPT aims to reap revenues of around $1.84 billion and pre-tax profits of over $331 million in 2022, up 19 per cent and 20.2 per cent on-year. Looking forward, FPT targets developing new products and providing larger-scale digital transformation services in 2022-2024.

Meanwhile, MobiFone aims to have one or two recognised national digital transformation platforms in 2022. In the development strategy towards 2030, this company will focus on three key pillars: digital infrastructure, digital solutions/platforms, and digital content services.