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Analyzing Vietnam’s

telecoms trend - Past,
Present And Future

Presented by PhD., M.A., & B.A in
Mass media and communications
Research
Will The Economic Crunch Play Havoc On
Vietnam's Markets?
• Telecoms subscriber figures produced by Vietnam's MIC
showed another impressive year of growth during 2008.
• Totalling 82.25mn fixed-line and mobile subscribers,
• an increase of 105.6% during the year,
• mobile subscriptions dominated,
• accounting for 85.5% or 70.324mn, with fixed-line
occupying the remainder at 11.926mn.
• As for internet, there were 20.67mn users, representing
penetration rates of 24.2%, following an increase of
11% during the year.
Vietnam Fixed-Line, Internet and Mobile - Historical Data and

Estimates/Forecasts

Source: Vietnam Ministry of Information and Communications, VOV News, BMI
2008, A Year Of Highs And Lows
• The subscriber results of Vietnam's telecoms sector
showed resilience despite a less than supportive
operating environment during the previous year, which
saw the suspension of registration for prepaid
subscribers via text messaging and websites,
• the increase in mobile handset prices during June and
July, as the US dollar rose in value, making Vietnam's
predominantly imported handsets increasingly dearer,
and HT Mobile announcing the dissolution of its CDMA
network in favour of GSM.
Highs
• Some highs in the market.
• A seventh mobile operating licence was awarded
to Gtel Mobile, a joint venture between the
Ministry of Public Security and Vimpelcom Group
of Russia,
• national GPRS coverage by the three largest
mobile operators Viettel, MobiFone and
VinaPhone and the growth of local retailers.
• Furthermore, free GSM cell phones were
provided by MobiFone and Viettel, although their
use was restricted to one network.
Viettel
• mobile market leader Viettel announcing it had doubled
its gross profit over the year to reach VND8trn
(US$471mn) in 2008, its revenues rising by 26% in the
same period to VND33trn, accounting for 35.9% of the
reported telecoms market revenue total of VND92trn, as
cited by Reuters.
• Viettel ranked second in terms of revenues in the
country after Vietnam Posts and Telecommunications
Corporation (VNPT), the parent company of rivals
MobiFone and VinaPhone.
• Minor operators such as EVN Telecom did not fare badly
either in 2008, with 3.2mn connections, including fixed
wireless and mobile, and it announced a 17% year-on-
year increase in revenues VND3trn, according to the
MIC, and reported by VietNamNet Bridge.
So, will 2009 promise another profitable and engaging year
for Vietnam's telecommunications operators?

• Vietnam's MIC Minister Le Doan Hop has stated
that the beginning of this year has seen little
impact to telecoms growth from high inflation
and global economic turbulence.
• However, a report by HSBC issued in January
2009 predicted that Vietnam's economy would
suffer through a difficult year in 2009.
• Among its key reasons was the fact that
Vietnam's stock market had shrunk over 2008,
detracting attention from key foreign direct
investment, one of the main propellants for
economic growth in the country, together with
exports.
IPOs, The Answer To Weakened
FDI Attention
• In order to counter the problems it faces, the initial
public offering (IPO) of large corporations in key
business fields that include telecommunications is
essential and will help gain the attention of foreign
investors.
• The announcement that MobiFone would undergo part
privatisation by selling off a 30% stake saw the
establishment of a number of Vietnamese subsidiaries by
foreign operators.
• At the time, foreign investors that were early to establish
a presence in the market saw the opportunity to form
relations with government and associated telecoms
bodies. Four years have passed since privatisation was
promised, and investors such as Telenor (Norway),
Vodafone (UK), NTT DoCoMo (Japan) and France
Telecom have continued to wait.
Legal Barriers
• While such delays have been explained away by
trademark issues, legal procedures and lack of a
definition for corporate value, foreign operators have
kept their patience, largely as they appreciate the long-
term investment potential of Vietnam, as investment
opportunities elsewhere become less.
• Indeed, a number of other local operators are also set to
follow MobiFone into privatisation including sister mobile
unit VinaPhone, and EVN Telecom, which is planning to
sell a 30% stake, with Viettel and Saigon Postal possibly
following, although the latter two operators have yet to
make any commitments.
3G
• Furthermore, on the horizon is the prospect of 3G
licensing, which will also be open up to foreign
participation, in partnership with local operators. This
could potentially see France Telecom with MobiFone,
NTT DoCoMo with VinaPhone and SingTel together with
Saigon Postel. NTT DoCoMo is already involved with
helping VinaPhone to write its 3G proposal, although the
Vietnamese operator has said that its relationship is
based purely on technological support.
• Although a timeframe for these IPOs has not been
announced, foreign operators will expect to be rewarded
for their long wait, and hopefully soon. Meanwhile,
Vietnam's government could be pushed into agreement,
if it hopes to ward off a poorly performing 2009.