Hanoi: Vietnam has awarded new 5G network contracts to Chinese telecom companies Huawei and ZTE, marking a significant shift in the country’s approach to its digital infrastructure.

The decision follows recent trade tensions with the United States and improving diplomatic and economic relations with China.

Reports say a consortium involving Huawei won a contract worth about 23 million dollars earlier this year. ZTE has also received at least two contracts valued at over 20 million dollars each for supplying 5G antennas. These agreements come after years of caution in Vietnam due to security concerns surrounding Chinese telecom equipment.

Until now, Vietnam mainly relied on European companies Nokia and Ericsson and US based Qualcomm for its 5G development. Those companies will continue to provide core network infrastructure while the Chinese firms supply radio access equipment and antennas.

Experts say cost is one of the main reasons behind Vietnam’s latest decision. Huawei and ZTE equipment is often more affordable than competitors from Europe and the United States. The deals also reflect a warming relationship between Vietnam and China after recent cooperation on trade, technology and cross border development projects.

However, the move has raised concern among Western officials who fear that the increased role of Chinese technology may pose security risks.

Some analysts say Western governments may review future cooperation with Vietnam on digital security and high technology partnerships.

Industry observers note that the new contracts could reshape the direction of Vietnam’s telecommunications growth in the coming years. It may also influence decisions by other Southeast Asian countries balancing cost, security and geopolitical pressure.

More contracts may follow as Vietnam continues to expand its 5G coverage.

Government officials have not yet commented on whether future projects will also involve Chinese suppliers or if the mixed vendor approach will remain.