Telecom Market Remains Attractive

 

The market was repeatedly stirred up by terminal personal devices powered by 3G and 4G technologies made by world-leading brands like IPhone, Blackberry, Nokia, Samsung and LG. With soaring demand and limited supply, some distributors deliberately created a falsified fever for hot models to push up prices.

 

Although terminal devices have been sold in Vietnam for a long time and leading makers like Nokia and Samsung frequently open new showroom, many Vietnamese companies with their traditional businesses having no relation with mobile phones start importing to sell in the country as they see a soaring demand. HiPT, which is known for making and distributing PC software and hardware, is preparing to introduce first imported mobile phones to the market in early 2011.

 

Before 2000, the Vietnam’s telecommunications market was not competitive because the Vietnam Posts and Telecommunications Group (VNPT) was a monopolistic player. People had to use the service at exorbitant prices and very poor quality. At that time, the mobile phone coverage was divided in three different regions with higher charges for farther destinations. The intra-region call charge was VND3,500 per minute while the rate for calls to an adjacent region was VND6,000 and for calls between the two ends was VND8,000. The country had more than 3 million telephone subscribers and mobile phone users accounted for only 0.3 million. More than 10 years after the end of monopoly, the Vietnamese telecom market made a record growth rate - considered amongst the world’s highest. To date, the country had 156.1 million telephone subscribers, of which 90.32 percent were cell phone users, bringing the tele-density to 180.7 telephone lines per 100 people. Modern equipment was installed to support state-of-the-art technologies like 3G and broadband internet.

 

By this time, at the end of 2010, telecommunications companies are scrambling to increase revenues by launching attractive promotion programmes, from presenting iPhone 4G phones to Toyota Camry cars. In previous years, Vinaphone - the third largest mobile phone service provider in Vietnam - only presented cheap SIM cards to customers but it this year presented IPhone 4G for users reactivating old SIM cards. Top-up value is also doubled. The development of the market offers consumers more choices and more utilities. The expansion of this market will also stimulate the development of science and prop up the country’s economic growth.

 

The diversity of telecom services also makes this market more compelling and expansive. According to the Ministry of Information and Communications, mobile service providers like VinaPhone, MobiFone and Viettel are providing basic applications on their electronic portals. Specifically, MobiFone - the second largest network - now has 60 services and VinaPhone has about 50 services. However, these applications are very basic. This is a good chance for other providers to jump into this promising market.

In 2010, the Vietnamese telecommunications market impressively raked in US$5.9 billion of revenues, more than doubling the amount in 2007. High growth is estimated to continue until 2015. According to IT experts, 3G technology that Vietnam will begin to use will be a primer for this market to boom.