Summary

This annual publication profiles the vibrant telecom market in Vietnam. While by some measures the country is still in a comparatively early stage of its telecommunications development, Vietnam has been aggressively expanding its national infrastructure and growing its subscriber bases across all market segments. Progress in developing the mobile market has been especially impressive; however, the introduction of Internet and particularly broadband Internet is still very much in the early stages, although the 2007/2008 period saw a significant surge in the country's online access.
 
Vietnam has become the target for an energetic new round of investor interest of late. Even in the midst of a global financial crisis numerous foreign telcos have been turning their attention to this most significant of South East Asian markets. The market is proving highly attractive to investors at the moment. It is generally agreed that Vietnam has come out of a period of wishful thinking-based on the belief that it could'go it alone.' The government has overseen the introduction of a modest level of competition into the telecoms market and this, combined with a generally improved economic climate within the country, has triggered a round of strong growth in the telecom sector.
 
More recently the move to allow an increased level of'equitisation' (the Vietnamese government's word for'privatisation') has sent a clear message to investors that the rules are changing in a positive way and the investment door has been opened. A significant milestone in this changing business environment was Vietnam's accession to the WTO in 2007; it could be said that this effectively provided a formal confirmation of the changes that had been taking place. It has still not become totally clear however, what form the government's involvement in the telecom sector will take into the future. A somewhat surprising development within Vietnam itself has been the cross-sector interest in telecoms.
 
While there has been strong growth in Vietnam's mobile sector (almost 70 million subscribers at the start of 2009, 80% penetration), the country's fixed line subscriber growth has not been so impressive. With the government seeming to be hedging somewhat on the fixed-line statistics, this market segment has been struggling to a certain degree over the last few years. It seems that growth has now flattened out.
 
In the meantime, the government continues to demonstrate a certain ambivalence about the Internet; government reticence has not, however, stopped the Internet market from at least starting to move along a solid growth path. Internet user penetration was running at an impressive 25% in early 2009, with the increasingly'hot' broadband segment of that market was expanding at an annual rate of around 50%.
 
Key highlights:*Vietnam's mobile market passed the 70 million subscriber mark in early 2009.
*The country's annual growth rate in mobile subscribers was running at in excess of 80% and looked set to continue into 2009/10.
*Interest in broadband services in Vietnam was finally picking up and in a sustained fashion.
*2008 saw the country's broadband Internet market in strong growth mode, following on from similar positive surges in 2006 and 2007.
*Overall broadband penetration remained relatively low (10% of households), but all the signs were that this expansion of the broadband market would continue in the short to medium term, at least.
*Following on from the successful launch of its Vinasat-1 satellite in early 2008, Vietnam was already moving towards its second venture into the satellite market, with planning already commenced on Vinasat-2.
*Despite what at times seemed painfully slow progress on regulatory change, the reality is that change has happened and Vietnam's telecom sector is now a vastly different market from what it was a decade ago.
 
Vietnam key telecom parameters-2008-2009
Category | 2008 | 2009 (e) |
Fixed-line services: |   |   |
*Total subscribers | 13.0 million | 12.5 million |
*Annual growth (e) | -14% | -4% |
*Fixed-line penetration (population) | 15% | 14% |
*Fixed-line penetration (household) | 57% | 54% |
Broadband Internet: |   |   |
*Total subscribers | 2.08 million | 3.00 million |
*Annual growth | 61% | 44% |
*Broadband penetration (population) | 2.5% | 3.4% |
*Broadband penetration (household) | 10% | 15% |
Mobile services: |   |   |
*Total subscribers | 68.5 million | 100 million |
*Annual growth | 89% | 46% |
*Total 3G subscribers | -- | 5 million |
*3G as percentage of total mobile | -- | 5% |
*Mobile penetration (population) | 76% | 112% | 
 
Data in this report is the latest available at the time of preparation and may not be for the current year.
 
The following notes provide some background to our scenario forecasting methodology:
*This report includes what we term scenario forecasts. By describing long-range scenarios we identify a band within which we expect market growth to occur. The associated text describes what we see as the most likely growth trend within this band.
*The projections shown in the tables in this report are based on our own historical information, as well as on telecommunication sector statistics from official and non-official, national and international sources. We assume a possible deviation of 15-20% around this data.
*All statistics for GDP, revenue, etc are shown in US$, in order to maintain consistency within and between markets. At the same time we acknowledge that this can introduce some irregularities.