Vietnam's ICT Market Keeps Time

 

With three laws directing and guiding ICT operations, namely the Information Technology Law, the Electronics Transaction Law and the Intellectual Property Law, the legal corridor for ICT in Vietnam is very good. In addition, the opening of three IT universities, including privately-run FPT University, privately-owned Hoa Sen University and Ho Chi Minh City Information Technology University, showed that human resource training is receiving appropriate concern. Investment in the IT field also jumped in 2006 with the notable expansions of Canon and Intel. Especially, nine months after receiving its initial licence, Intel increased its investment capital from US$600 million to US$1 billion.

 

In 2006, Vietnam also saw spectacular development and changes in the telecom sector. Three telecom service providers were licensed to test Wimax services in Vietnam. The Vietnam Multimedia Corp. (VTC) launched digital TV services for mobile phones – a field that only three countries in the world are entering. The concern for the telecom sector was not only of the state authorities or telecom companies, but also of the intelligentsia. In the Vietnam Intelligence Contest 2006, which selected outstanding IT products, four out of nine winners were mobile phone software solutions.

 

Both the import and export revenues of hardware exceeded US$1 billion in 2006, totalling US$2.6 billion. However, contrary to the US$1.55-billion turnover of the hardware industry, services and the software industry generated only some US$250 million. The wide difference showed software production is not a strong point for Vietnam, although the Government applied many programmes and projects to speed up the development of this industry. Moreover, this US$1.55 billion turnover is contributing to Vietnam’s target of US$3 billion turnover for the hardware industry by 2010.

 

The software and service industry in 2006 was spurred on by the development of the digital content industry in Vietnam, a field with recognised great contributions. This field now has some 10,000 employees working in six contents: online training, online gaming, internet content development, mobile phone content development, electronic libraries and digital film. As for online education, although it is in the first phase of development, Vietnam already has more than 50 companies and 30 websites registering for the service. The Ministry of Posts and Telecom of Vietnam set its digital content industry earnings target at US$400 million, with the creation of 30,000 digital content sector jobs, by 2010.

 

In 2006, Vietnamese IT circles heard much discussion on open source software. Several companies invested in researching and providing open source software for users, such as Open Office of HPT Saigon Company, ISE Company and Vietkey Linux. Several open source software communities also took part in Vietnamising Open Office 2.0, like JavaVietnam, SaigonLux and HanoiLug. The Vietnam Association of Information Processing (VAIP) has built a programme to socialise the open source software project, which has received numerous commitments from young intelligentsia, scientists, researchers and IT lecturers. The Vietnamese IT circle expects that open source software will be the choice of many companies, because it reduces investment and software copyrights costs.

 

The Vietnamese telecom market in 2006 was more active than ever, especially mobile communication. The market is being dominated by GSM technology-based networks although the number of GSM technology-based and CDMA technology-based networks are equal. VinaPhone, MobiFone and Viettel Mobile are using GSM networks, while S-Fone, EVN Telecom and Hanoi Telecom are employing CDMA technologies. In 2006, S-Fone was the first mobile phone network to provide video-on-demand and internet access on CDMA platform mobile phones. In this aspect, the GSM networks could not compare.

Among the three GSM networks, Viettel Mobile is the youngest. Just over two years old, Viettel Mobile pulled off a miracle in network expansion, with the subscription of more than seven million users, equal to the subscriber populations of VinaPhone and MobiFone combined, which have been operated for more than 12 years. Viettel Mobile was also the first mobile phone network to cover all 64 provinces and cities nationwide with some 3,000 base transceiver stations.

Following WTO entry, Vietnam has to open the telecom market and abide by WTO telecom regulations. At this point of time, many leading international investors view Vietnam as the favoured destination. At the moment, more than 10 international telecom giants have expressed increasing interest in investing in Vietnam. With high pay for staff, professional managerial levels, scientific working style and rich experience in the global telecom market, foreign investors hold an advantage. To cope with this challenge, Vietnamese ICT industry enterprises should closely cooperate to build long-term business strategies. In the coming time, the market will see more severe competition. However, healthy competition will generate more practical benefits for customers. They will be better served with more advanced utilities and lower service costs.