Vietnam Overseas

Vietnam’s government has recognised the importance of the national telecommunications sector for economic growth and made it one of its top priorities to develop it. A fast growing broadband and mobile market has also attracted foreign companies which are interested in snapping up shares in Vietnam’s telecoms operators. So there an easy prediction to make: year 2007 and 2008 will see Vietnam’s telecoms players rebranded and globalised by Telenor, France Telecom, Vodafone, SingTel and the likes. At present, foreign firms are permitted to hold only a 49% stake in a telecom joint venture. But WTO commitments will allow wholly foreign-owned entities to operate from 2010.  Vietnam accommodates no less than five fixed telephony operators: Vietnam Posts and Telecommunications Corporation (VNPT), Electric Telecommunication Company (ETC/ VP Telecom), Viettel, Saigon Posts and Telecommunications Service Corporation (SPT) and Hanoi Telecom Company (Hanoi Telecom). VNPT, the main fixed line incumbent and past multiple monopoly holder, is still the dominant player over most areas of Vietnam’s ICT sector. VNPT operates two GSM mobile networks through its subsidiaries - VinaPhone and MobiFone – and with an early entry into the ADSL consumer segment it has stakes in both vital growth areas of 2007: mobile telephony and broadband services. The government owns VNPT and interests are eventually going to collide over the need to privatise VNPT in order to encourage more competition. As a first step, in March 2005, the government approved of plans to restructure VNPT Corporation into the so-called ‘VNPT Group’. The newly restructured group is expected to enhance VPNT competitiveness and will be launched sometime in Q2 2006.  In March 2006, telephone access was available to 99.4 % of people in the country. Teledensity stood at 20.6 units per 100 inhabitants. According to the Ministry of Post and Telematics of Vietnam (MPT), by Dec 2005, Vietnam had about 15.38 million fixed and mobile telephony subscribers. This number increased to 17.1 million in March 2006 of which 13.2 million were mobile subscribers. By April 2007, the number of telephone subscribers had doubled to 33.5 million of which 24 million were mobile customers. 

In Vietnam, six licensed mobile network operators are running or will operate three GSM mobile networks operators and three 3G CDMA mobile networks soon. In March 2006, the mobile market is divided among VinaPhone (by GPC of VNPT) with 42.7%, MobiFone (by VMS, a VNPT’s BCC) with 38.9%, Viettel with 15.3% and S-Fone (a SPT’s BCC with a South Korean consortium) with a 3.0% market share. Hanoi Telecom and VP Telecom/ EVN Telecom launched their CDMA mobile phone networks in late 2006. S-Fone already launched its 3G CDMA2000 1X network in July 2003.  After two year of relaxed market rules throughout 2005, the mobile service market in Vietnam is gradually becoming more dynamic, more complex and competition is intensifying. The year 2005, witnessed the entrance of one new major player – Viettel – which quickly gained a firm foothold in the market by continuously cutting service charges and launching unprecedented promotional campaigns. But not all went smoothly for Viettel. The government intervened after complaints were raised that VNPT did not ensure interconnectivity with Viettel’s mobile network in August 2005. The two other major mobile providers - VinaPhone and MobiFone - followed Viettel’s price campaign suit. Vietnam’s mobile subscriber growth is phenomenal. In July 2007, it was estimated that the three GSM technology-based networks (Viettel, VinaPhone and MobiFone) together have some 90,000 new mobile subscribers per day. The total number of new additions would increase to 100,000 new subscribers per day if it included new mobile subscribers of the three CDMA networks of EVN Telecom, S-Fone and HT Mobile. By March 2006, VinaPhone and MobiFone had signed up more than 10 million subscribers between them (of a country total of 13.2 million). By June 2007, Vietnam had 28 million mobile customers of which MobiFone bagged over 7 million, up from 4.7 million subscribers by end-2005. VinaPhone come in as a close second with over 6 million subscribers.