Counterpoint: Vietnam's 2G users will drop below 800,000 by October 2024

Vietnam's Ministry of Information and Communications (MIC) announced in December 2023 that it plans to shut down the country's 2G network starting in September 2024, excluding some remote areas where 4G penetration is low.

Vietnam's Ministry of Communications has banned the import of 2G equipment since 2020, but these devices are imported through the gray market, and Vietnam will still have more than 10 million 2G users by the end of the second quarter of 2024.

Stakeholders' Efforts in 2G Network Transformation

During the transition period, network operators implemented various strategies to move 2G-only users to newer networks and ensure a smooth shutdown of 2G services. The Vietnamese government and telecom operators were quite aggressive in marketing and implemented methods such as call waiting notifications and speaker ads. Operators provided financial support for 4G-only phones and subscription packages for phones transitioning from 2G. Some companies also provided 100% financial assistance for 4G devices to help 2G-only users.

State-owned Vietnam Telecom has implemented a support program that allows consumers to switch from 2G phones to 4G for free if they use Vietnam Telecom's 4G plans for six months or more.

Another leading telecom operator, Mobifone, launched the "Replace 2G Devices, Unexpected Rewards" program to support this transition. The incentives include free replacement of 4G SIM cards, free data packages, and free 4G feature phones.

On the retail side, this is not only an opportunity to increase sales but also an opportunity to clear out old stocks of 4G entry-level smartphones and 4G feature phones.

FPT Shop has launched a program to support the collection of old 2G devices in exchange for new 4G devices, with consumers receiving gifts worth up to VND600,000 (US$24).

Impact on Vietnam’s mobile phone market

According to data provided by telecom operators, with the joint efforts of the government, telecom operators and OEMs, the number of 2G users in Vietnam has dropped below 800,000 by October 2024.

The shutdown of 2G networks and the lack of 5G network penetration means Vietnam is now highly dependent on its 4G network.

The move to shut down 2G also benefits Vietnam's telecom operators as more people switch from 2G to 4G, which helps boost average revenue per user (ARPU).

OEMs emphasize 4G smartphone launches - 66% of new Android smartphones launched in Vietnam in Q3 2024 were non-5G smartphones. OEMs are working to provide customers with more 4G options. In the smartphone market, the sub-$200 price segment saw a 38% year-over-year sales increase in Q3 2024. This price segment also had a market share of 51% in Q3 2024, the highest level since Q1 2022.

in conclusion

The switch-off of 2G is a milestone for Vietnam’s digital ecosystem. Favorable economic conditions and the efforts of OEMs, telecom operators and the government have ensured a smooth transition.

Vietnam has set a target of 99% 5G coverage by 2030.