Mobile Telecommunications Market: Towards Sustainable Development

“Mobile Telecommunications Market: Towards Sustainable Development” is one of the two main themes of the International Exhibition and Conference Mobile Vietnam 2012, which recently took place in Hanoi. The event has contributed to shaping the future of the mobile industry in Vietnam, and offered cooperation opportunities for mobile operators; mobile solutions providers; terminal equipment manufacturers and suppliers of mobile software.

According to the Department of Telecommunications (Ministry of Information and Telecommunications), by the end of May 2012, the total number of telephone subscribers on the entire network of Vietnam was 132,8 million, of which 122,79 million was mobile subscribers accounting for 92.5 percent, 10 million was landline subscribers accounting for 7.5 percent. Accordingly, for a population of nearly 88 million people, an average person uses about 1.5 mobile numbers. This is considered a quite fast development pace. Currently, there are six major network suppliers, of which three suppliers occupy the bulk of the market: Viettel (accounting for 40 percent), Vinaphone (accounting for 30 percent) and Mobifone (accounting for 20 percent). However, the Vietnamese mobile telecommunications market is revealing its unsustainability when witnessing the leaving of two mobile brands which are S-Fone and Beeline. This network supplier had to leave the Vietnamese telecom market since VimpelCom Group (Russia) sold off 49% stock to its partner, Gtel Mobile. Other small mobile network suppliers are still trying to maintain their market share and some investors still hesitate to set foot in Vietnam's telecommunications sector.

 

Meanwhile, the new changes from the mobile network suppliers in Vietnam recently also show the fierce competition on the mobile telecommunications market and promises many changes in the future. According to statistics, in the first 6 months of 2012, three major network suppliers which are Viettel, Vinaphone and Mobifone’s market share only increased 1 percent, while Gmobile saw a growth of 1.42 percent. However, the majority of users use subscribers of this network as an alternative, to enjoy promotion. This will probably lead to loss of balance and stability of this network.

 

Mr Vu Anh, Director of Telecommunications Department of VNPT said that the Asia Pacific region has the largest number of mobile subscribers with a steady growth rate in the period of 2009-2015. It is expected to be approximately 7 billion mobile subscribers, 588 million mobile broadband subscribers in 2015. Demand for data services with high speed has also been increasing. Video capacity accounts for about 40-60 percent of the mobile data traffic of the mobile network suppliers in 2011. With the development of telecommunications services, users tend to use more high-resolution videos.

 

To navigate to the sustainable development of the mobile telecommunications market in Vietnam, Department of Telecom said that the major networks would be more tightly managed in terms of tariff as well as promotions. Smaller network suppliers will be granted more flexible policies. Mrs Tran Nhat Le, Deputy Director of Department of Policy and Planning, Department of Telecommunications (Ministry of Information & Communications) also affirmed that in the Vietnamese market, "there are at least three major networks" operating under the pressure of competition.

 

Deputy Minister Le Nam Thang of Information and Communications said that this meeting has the theme in compliance with the orientation of the government in the national Telecommunications development plan towards 2020. The conference will be a good opportunity for speakers to exchange and promote cooperation and investment opportunities and to introduce new application solutions in the field of telecommunications. He also affirmed that Vietnam is always ready to welcome and create favourable conditions for the international telecommunications business to effectively take investment into Vietnam.

 

Previously, in the inaugural exhibition Mobile Vietnam 2012, Minister of Information and Communications Nguyen Bac Son also emphasized that currently, the Information and technology industry in Vietnam is considered an industry with steady steps, playing an increasingly important role in the socio-economy. Vietnam is expected to will have mastered technology and information infrastructure by 2020. To make this goal come into reality, Vietnam is focusing on development of human resource and investment in telecommunications infrastructure, including mobile systems.

 

Also according to Minister Nguyen Bac Son, Vietnam's telecommunications with modern technology all over the country are offering diverse services with good quality and competitive price to meet the requirements of social life. Particularly, many Vietnamese enterprises have started to reach out to world markets. However, to make the Vietnamese telecom market develop with balance and sustainability, Vietnam's telecommunications industry has to make more efforts and build information superhighway to widely apply information technology, ensure information security and national sovereignty on information security.

 

In addition, from the view of state management, in recent times, Ministry of Information and Communications and related industries have taken great efforts to build and perfect the legal framework to promote the development of the telecommunications industry and information technology. Besides, they also put effort into setting up an environment for fair competition and creating favourable conditions for investment, business and participation in the market by domestic and foreign economic sectors.

According to the national telecommunications development plan towards 2020, in the future, Vietnam will reorganize the telecommunications business in the direction of allowing the transfer, sale and merger to form three to four groups and corporations with specialized professional operations on the basis of effective use of infrastructure and telecommunications resources to avoid monopoly in telecommunications activities. The Ministry of Information and Communications will also strictly control service prices to reduce costs to match the income of ordinary people. However, it will gradually adjust some services with current low cost to ensure effective business for enterprises.