There have been changes within the Vietnam telecom industry with the restructuring of VNPT and Viettel, which made the competition becoming more intense.
The year 2014 has undergone with many changes within the telecommunications industry of Vietnam. The change in personnel and structure of the two corporations that are VNPT and Viettel made the competition becoming more intense. According to experts, the year 2015 will continue to witness a lot of breaks as well as new trends in the telecommunication industry, therefore the management agencies and enterprises must change to adapt to the actual needs.
The following are update intelligence from Vietnam corporate insights for the purpose of risk management for foreign investors interested in telecom business while expanding into Vietnam.
Telecommunications industry in 2014: Many prominent imprints
To implement the Resolution No. 01/NQ-CP of the Government dated January 2nd 2014, Vietnam Ministry of Information and Communications has submitted to the Government a series of Decrees, Decision of the Prime Minister, issued many Circulars related to state management in the field of telecommunications, as well as implementing various related projects, facilitating the development of infrastructure and telecommunications services; approving a series of other important projects such as number portability; implement the systems to ensure safety and security for the national domain name servers; deployment of projects concerning data collection of telecommunication enterprises to ensure the controlling of all mobile subscribers…
In addition, 2014 was the year that telecommunication businesses leave many important marks. Although the economy is still in the recovery process, along with competition in the market, the impact of OTT… but the large telecommunication businesses like Viettel, VNPT, MobiFone still achieve high sales, maintaining the domestic market and outreaching international market.
Viettel – the goal is to become a global enterprise
End of 2014, Viettel’s revenue reached 196,650 billion VND, increased by 20% compared with 2013, profit before tax reached 40,532 billion VND and contributing to the state budget over 15,434 billion VND.
Regarding telecommunication networks, 3G network is investing to expand and improve the quality with more than 29,032 3G BTS stations (2G with 34,603 stations). The ultra-wide band fixed network has been deployed across the country. The telecommunication infrastructure can ensure to supply all telecommunication, television and information technology services to customers.
Also in 2014, Viettel has also launched services in two countries Peru and Cameroon, bringing the total number of countries that Viettel invested to 9 countries.
With these successes, Viettel has showed the determination to achieve revenue of 230,000 billion VND in 2015. Their goal in the future is to become a global enterprise. Therefore, in addition to maintain its position in the country, Viettel has to strengthen their business abroad.
As of the end of 2014, Viettel reached 57.4 million subscribers (mobile accounts for 55.5 million subscribers). Viettel’s foreign market reached 17.5 million mobile subscribers and 815 thousand of fixed subscribers.
VNPT, MobiFone – change to develop
2014 was a volatile year of VNPT when the group decided to separate Mobilefone from the system to carry out restructuring. The objective set for the board is to put VNPT back to the 1st position after being dropped into the setback phase.
VNPT’s total revenue in 2014 was 101,055 billion VND, contributing 5,850 billion VND to the state budget. Total subscribers were around 30.5 million (mobile subscribers accounted for 26 million). In addition, the total number of broadband internet subscribers reached over 3 million subscribers; total IPTV subscriber was about 1 million subscribers.
Mobifone, which was separated from VNPT, has achieved certain success. Revenue was estimated at 36,605 billion VND, profit before tax was estimated at 7,300 billion VND. State budget contribution was estimated at 3,926 billion VND.
Total active subscribers on MobiFone so far reached 40.2 million subscribers, in which in 2014 the number increased by 1 million subscribers.
MobiFone has also developed additional of 4,566 2G + 3G BTS stations, bringing the total number of BTS 2G + 3G station up to 33,939 stations (2G: 19,647 stations; 3G: 14,292 stations).
The immediate goal of MobiFone leader is still promoting the inherent strengths and successfully implementing the privatization.
Highlight trends of the telecommunications industry in 2015
With the restructuring of enterprises and the market, the competition will increase. The separation of MobiFone into independent business will create more competition, helping the market grow better and bringing more benefits to consumers.
Besides, the trend of technology convergence of telecommunication services – radio and television – information technology have also leveraged enterprises to deploy business plans, devise solutions and services to ensure the assembly convergence and services integration on one platform.
With the development of personal devices, all service applications that previously could only be implemented to agencies, businesses, organizations and households, can now be supplied to each citizen and is used anywhere. Therefore, enterprises when deploying need to mass-oriented to people, takes customer as center to provide services.
Although the telecommunications market could be considered as saturated with the monopoly of the 3 large networks mentioned above, but its development needs remain enormous. As people’s living standard is significantly improved, the demand for quality services will also increase. That’s the potential, the main development direction that Vietnam telecommunications businesses should lead to.
And with many challenges
In addition to growth opportunities, telecommunications industry also has many challenges that need to be solved as policies are insufficient and incomplete; training of human resources is limited, especially the team of skilled engineers; still heavily dependent on foreign technology… The state authorities, enterprises also need to draw from experiences in terms of mechanisms and policies to encourage youth creativity, building new business model… contributing to the overall development of the country’s telecommunications industry.