Vietnam - Telecoms, Mobile and Broadband
Vietnam moves to reduce government presence in telecoms
Any review of the telecoms market in Vietnam must take into account the nature and structure of the government. Whilst nominally a communist state and therefore a centrally planned economy, it has undergone significant structural change over the years. After revising its attitude to the market economy and the role of the private sector, the government has progressively introduced some competition into the market place, building what it describes as ‘a socialist oriented market economy.’ There is no doubt that this change of policy and outlook resulted in a fresh growth momentum within the nation. Nevertheless it remains a one-party system, moving slowing in the implementing of social and economic reform and simply avoiding some reforms altogether. This background is important in understanding the manner in which the country’s telecom sector has been developing in 2015.
The government is finally addressing the restructure of the VNPT. After numerous false starts and a variety of proposals, it had finally agreed to hive off MobiFone from the state-owned parent and sell shares via an IPO. Steps had already been taken that indicated the process was now irreversible. The IPO was set for 2016.
Vietnam’s mobile market is growing, but had slowed significantly into 2015; fixed-line subscriber numbers have declined sharply; and broadband is booming boosted by mobile broadband services and fibre-based fixed broadband. Much earlier, the government had set ambitious targets in the telecom sector for the expansion of infrastructure. But it fell well short of these targets. Things began to change, however, mainly on the back of an increasingly competitive mobile sector. Vietnam’s mobile market has grown strongly over the last decade in particular. This was evidence that the competition model the government had put in place, although limited, was in fact working. The mobile market stalled in 2013, suffering a major correction in that year. By 2015 growth had returned but was generally slower, as already noted.
In the meantime, having come late to the internet, Vietnam is finally embracing the higher access speeds offered by the various broadband platforms. Although there has been a surge in subscriber numbers, fixed broadband remains a relatively small but expanding market segment. The fixed broadband services have been largely based on DSL technology; more recently, fibre-based broadband services are starting to replace DSL as the fixed broadband option, with FttH subscriptions growing by more than 150% in 2014. Most significantly, the arrival of mobile broadband has seen much wider access to faster internet speeds. The penetration of mobile broadband services was more than four times that of fixed broadband by 2015. An important aspect of the internet market is that the government has been particularly active in the development of cyber laws, no doubt because of its deeply ingrained political culture of central control.
The significant presence of fixed-line services throughout the country had been against the global trend for a developing economy (a high point of 20% penetration in 2009); however, fixed-line numbers have declined dramatically in recent years and by 2015 penetration had fallen to around 5%.
It needs to be said that the broad telecom market growth in Vietnam is happening amidst a sometimes confusing set of statistics. The figures published both by the government, the operators and other industry sources are often contradictory and earlier figures are often revised. In this report, where there is any doubt about the statistics issued, BuddeComm publishes in its tables what are considered the most likely figures or provides estimates.
broadband market growing strongly, on back of vigorous mobile broadband sector;
annual growth in fixed broadband subscribers at 16% in 2014 and similarly into 2015
mobile market had reached 150% penetration milestone coming into 2015;
overall growth in mobile subscribers has slowed;
Vietnam’s second satellite, Vinasat-2, has been launched;
MobiFone, separated from VNPT, preparing for an IPO, possibly in 2016;
MIC revoked the operator licence of struggling S-Fone;
MIC authorised operators to launch trial 4G/LTE networks;
MIC preparing for 4G, with licensing expected in 2016;
FttP broadband subscribers were growing at an annual rate of 100%+ into 2015;
DSL technology was still supporting the majority of fixed broadband services;
Viettel a clear leader in the fibre market with 55% share of the subscriber base;
MIC set 2017 as target date for introducing Mobile Number Portability (MNP);
Despite effective 3G network rollout nationwide, subscriber numbers lower than expected;
Viettel was continuing to expand its overseas ventures, with ambitious plans announced;
government continues tight control of internet, with sudden clamp downs from time to time;
mobile operator Vinaphone introduced an ‘e-medicine service’ for customers;
a schedule had been put in place for the digitalisation of TV broadcasting in Vietnam;
DVB-T2 terrestrial digital TV standard selected by regulator;
government was to subsidise poor households in purchasing terrestrial digital TV receivers.
Companies mentioned in this report:
VNPT; Vinaphone; Mobifone; Viettel; S-Fone; EVN Telecom; Vietnamobile (Hanoi Telecom); GMobile/GTel; Vietnam Datacommunications Company (VDC); FPT Telecom; SaiGonNet; NetNam; Vietnam Television Technology Investment and Development Company (VTC); FPT Telecom; Vietnamobile (Hanoi Telecom); Gmobile (formerly Beeline); Facebook; Google; Vietnam Cable TV (VCTV); SCTV; K+; Alibaba, EBay; BTS-Hanoi; HTVC-HCM City; VTC; Qualcomm; Red River Delta; CMC; DN khac.