Local Cellphone Market Expects Hefty Growth of 50 per cent in 2005

Local Cellphone Market Expects Hefty Growth of 50 per cent in 2005

Market research company GfK predicts that sales of cellphones in Vietnam in 2005 will see a 50 per cent growth against 2003 mainly due to the reduction of import tariff on cellphones from 15 per cent to 10 per cent in 2003 and to 5 per cent in 2004.

The tax cut has remarkably reduced the domestic mobile phone prices. In addition, cellphone suppliers has invested more in expanding their retail networks and enhance their sales promotion activities, reducing the share of smuggled cellphones in the local market from 70 per cent to 50 per cent.

"The new tax rate has helped narrow the gap between the prices of legitimate cellphones and smuggled ones, encouraging consumers to choose legitimate cellphones," said Nguyen Van Dao, Deputy Director of Samsung Vina Co.

According to cellphone traders, the prices have fallen by between 7 per cent and 15 per cent since the new tax rate took effect late last year.

The high growth of Vietnam's cellphone market is also credited to the establishment of new service providers and the move of local mobile phone service providers to reduce their charges.

According to GfK, the demand for camera cellphones and cellphones that support MP3, Internet and Bluetooth will particularly high this year.

Last year, Vietnam signed up some three million new telephone subscribers, up 70 per cent against the previous year and raising the total number of telephone subscribers in the country to 10.3 million.

Accordingly, the country's tele-density has been raised to 12.34 from 8.78 phones for every 100 residents at the end of 2003. The Ministry of Post & Telecoms predicts that the tele-density will exceed 18 phones for every 100 residents by 2010.

Vietnam now has five cellphone networks, including the GSM-based Vinaphone, MobiFone and Viettel, CDMA-based S-Fone, and iPAS-based Cityphone.

• (Young People)