Vietnam: Vietnam Communication Profile

Next a ‘correction’ in subscriber numbers in 2013, Vietnam’s mobile market moves forward.

Vietnam has for some years presently been aggressively expanding its national infrastructure and growing its subscriber bases across all market segments.

Evolution in developing the mobile market has been particularly impressive, although there was been a substantial moderation in increase over the last few year; in fact the year 2013 saw the mobile market experience a correction, as the mobile numbers were revised downwards. In the meantime, the internet market, and particularly the roll-out of broadband internet, was still in a relatively early stage of development, there has been a significant rise in the country’s online access over the last decade. Most importantly, there has been a major push into mobile broadband.

It needs to be said that the broad market increase in Vietnam is happening amidst a confusing set of market statistics. As the country’s telecom sector was clearly expanding in a strong manner, the figures published both by the government and the operators were often contradictory and before figures were often revised. The government reported that there were 154 million mobile subscribers by end-2010, an increase of 40% for the year and representing an in general penetration of 174%. The total figure included 16.4 million fixed-line services by end-2010.

From presently on in September 2012, according to Vietnam’s General Statistics Office (GSO), the number of telephone subscribers nationwide was 135.9 million, which included 15 million fixed-line subscribers and almost 121 million mobile phone subscribers. The government has been casting the activity in the market as positive increase; from presently on there appeared to be a process in place for regularly revising the mobile subscriber statistics being published. The conflicting and missing numbers have made it difficult to obtain a considered view of the market. In this statement, where there is any doubt about the statistics issued by the government/operators, what are considered the majority likely figures are published in our tables of statistics.

In any event, as by presently noted, there is no doubt that Vietnam’s telecom sector has been through a period of particularly strong increase. It is reasonable to say that the country’s mobile market has been on a long run of increase and that even as the annual rate of mobile subscriber increase was falling to somewhere below 10% a year the market remained competitive and offered a good platform for further increase and development.

As with the mobile market, the government as well seemed to have been hedging somewhat on reporting fixed-line statistics. It finally became clear, however, that this market segment has been seriously struggling and was in major decline. Whilst it may well have ‘flattened out’, there is no doubt that the fixed penetration halved in just four years, from 20% in 2009 to 10% in 2013. This is not to underestimate the price of the fixed-line infrastructure that has been put in place. The excellent national coverage by presently completed is indeed impressive. As for the internet, the government continues to take a cautious position; government reticence has not, however, stopped the online market from moving along a solid increase path. Internet user penetration was estimated at 44% coming into 2014. The broadband segment increase has been particularly strong, although much additional of the increase was in mobile wireless broadband rather than in fixed broadband.

Over the years Vietnam’s evolution on regulatory reform in the telecom sector has moved along in an erratic fashion. Certainly good evolution was made in the lead up to WTO accession, but a lot of initiatives stalled subsequently. By 2014 the government was finally addressing the restructure of VNPT. Next numerous false starts and a variety of proposals, it was finally agreed to hive off MobiFone from the national owned parent and sell shares via an IPO. Steps had by presently been taken that indicated the process was finally irreversible. The IPO was set for 2015.

The telecom market in Vietnam continues to attract investor interest, but there is a cautiousness presently as the world industry senses that ‘the bubble has burst’ in Vietnam. Vimpelcom was one of the foreign telcos to depart, selling its shares in the Beeline operation to its local partner. A general process of rationalisation has clearly been taking place in the market.