Vietnam Telecom Market: Numerous Opportunities for Investors

Investors said Vietnamese mobile communications is a big and potential market. Ms Liz Hall, UK-based ITM Group’s financial analyst, said the mobile market in Vietnam has recorded the fastest growth in all of Asia and will remain attractive in the following years.

 

Vietnam Posts and Telecommunications Group (VNPT) and Singapore’s ITM Asia Co. jointly opened the fourth annual Mobiles Vietnam 2007 Show, themed “Enhancing the reach and profitability of mobile services in Vietnam and beyond” in Hanoi. This is the major topic of the international conference on GMS mobile information toward 3G World Series.    The event attracted 300 guests, with over 30 speeches by leading experts from home and abroad, focusing on hot issues like developing the regional market, providing content services for mobile subscribers, broadband mobile services, 3G and WiMax technology.     During the conference, there were round-table discussions between Vietnamese and foreign companies, and an exhibition displaying the most advanced products, solutions and technology of some leading telecom groups and mobile information service developers.

Under its WTO admission commitments related to the service sector, Vietnam will allow foreign firms to invest in Vietnamese mobile phone service companies. Thus, Norway’s Telenor, Japan’s NTT DoCoMo, UK’s Vodafone, US’s Lucent Technologies, Russia’s Altimo and others have expressed keen interest in the Vietnamese market. Nguyen Van Hung, chief representative of Tenenor in Vietnam, announced that “when the Vietnamese Government permits equitisation of State-run mobile phone services companies, we will take part as strategic investors. Then, Telenor will contribute capital by acquiring stakes. At the same time, if permitted to hold key positions in the companies, Telenor will transfer experience and business initiatives to Vietnamese partners.”

Altimo, which also has a representative office in Vietnam, said although its mobile phone networks in Russia, Eastern Europe nations and Turkey are developed, Altimo cannot ignore Vietnam because it is a fast-growing market with a lot of potential for Altimo. Altimo will not act as a telecom firm in Vietnam, but directly invest in the country's telecom industry. According to experts, telecom markets in developing countries are always very active and Vietnam is no exception. A lot of leading international firms like France Telecom, Avaya, Comvik and Sun Microsystems have a presence in Vietnam. VinaCapital Investment Fund is paying close attention to this active industry.

 

TM International (Telekom Malaysia) revealed its initiative to connect Asian telecom firms by an international undersea cable system, linking South East Asia with the United States. Instead of only locating a representative office in Vietnam, the company wanted to transfer technologies and experience to Vietnam. Mr Yusof Annuar Yaacob, CEO of TM International, said the Asian region has a high demand for undersea cables, especially Vietnam. Therefore, instead of inviting one company in each nation to this project, TM invited two Vietnamese telecom firms, VNPT and Viettel.

Many foreign market analysing and forecast companies have optimistic forecasts for growth of the Vietnamese mobile communication market from now until 2010. For example, the UK-based BMI forecast Vietnam will have 36 million mobile phone subscribers by 2010, but Canada’s Hot Telecom thought the number would be 50 million. According to the Ministry of Posts and Telecom, by the end of April 2007, Vietnam signed up 33.5 million mobile phone users, including nearly 24 million mobile phone subscribers and some 9.5 million landline telephone users. The ministry forecast that half the Vietnamese population will rely on mobile services by 2010. The launch of the Vinasat satellite, scheduled for early 2008, is a good example of this and will create great opportunity for Vietnam's telecom and mobile services sectors.

At present, Vietnamese tele-density is 38 telephone subscribers/100 persons. Market saturation point is a tele-density of 80 telephone subscribers/100 residents. Thus, many pin high hopes on a market with more than 80 million people. Besides, the young population is also attractive to foreign investors.