2013 Vietnam - Telecoms, Mobile, Broadband and Forecasts

Vietnam’s mobile market sees continuing sluggish growth as the local industry ‘sorts itself out’

Note: For this report the statistics in most of the tables have been updated with the latest available data, and/or estimates where appropriate, as of August 2013; the scenario forecasts have also been revised/updated.

Vietnam has for some years now 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, although there has been a substantial moderation in growth of late; and whilst the internet market, and particularly the roll-out of broadband internet, is still in the early stages of development, the last five years have seen a significant surge in the country’s online access. Most significantly, there has been a major push into mobile broadband.

It needs to be said that the broad market growth in Vietnam is happening amidst a confusing set of market statistics. As the country’s telecom sector continued expanded in a relatively strong fashion through 2011 and 2012, the figures published both by the government and the operators were often contradictory and earlier figures were often revised. The government reported that there were 154 million mobile subscribers by end-2010, an increase of 40% for the year and representing an overall penetration of 174%. The total figure included 16.4 million fixed-line services by end-2010. Yet in September 2012, according to Vietnam’s General Statistics Office (GSO), the number of telephone subscribers nationwide was 135.9 million, which included 15 million fixed-line subscribers and almost 121 million mobile phone subscribers. The government has been casting the activity in the market as positive growth; yet there appeared to be a major revision of the mobile subscriber statistics being published. By late 2012, the government was publishing less and less official subscriber numbers. The conflicting and missing numbers have made it difficult to obtain a considered view of the market. In this report, where there is any doubt about the statistics issued by the government/operators, the most likely figures are published in our tables of statistics.

In any event, there is no doubt, despite the at times puzzling statistics, that Vietnam’s telecom sector has been through a period of particularly strong growth. It is reasonable to say that the country’s mobile market has been on a long run of growth and that even as the annual rate of mobile subscriber growth fell below 10% a year the market remained competitive and offered a good platform for further growth.

The industry-wide ‘correction’ in mobile subscriber figures put the number of mobile subscribers at 134 million by end-2012 for a penetration of 149%. The country’s fixed-line subscriber growth had not been impressive of late either. With the government also seeming to be hedging somewhat on reporting 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 or it may even decline further. This is not to underestimate the fixed line infrastructure that has been already been put in place. The excellent national coverage already achieved is indeed impressive. As for the internet, the government continues to take a cautious position; government reticence has not, however, stopped the online market from moving along a solid growth path. Internet user penetration was estimated at a very healthy 39% coming into 2013. The broadband segment growth was particularly strong, although much more of the growth was in mobile wireless broadband rather than in fixed broadband.

The telecom market in Vietnam continues to attract investor interest, but there is a cautiousness now as the global industry senses that ‘the bubble has burst’ in Vietnam. Vimpelcom was the latest foreign telco to depart, selling its shares in the Beeline operation to its local partner. It is generally agreed that the country has come out of a period of wishful thinking and must now face certain realities. 

Market highlights:

• Vietnam’s mobile market stood at 135 million subscribers by mid-2012, for a penetration of 150%;
• This represented a significant ‘correction’ in the market, with some sources reporting a considerably higher penetration just 12 months earlier;
• The country’s annual growth rate in mobile subscribers was reported close to 40% in 2010 but after the market correction growth had moderated considerably (less than 10% annually);
• In the 2007/2012 period the country’s fixed broadband internet market has surged, jumping almost 300% to reach more than 4.5 million by end-2012;
• Overall fixed broadband penetration remained relatively low, however, at around 5% of population;
• With interest in broadband services in Vietnam finally picking up, much of the growth was in mobile wireless broadband;
• Fixed-line subscriber numbers were stagnating in 2010/2011 and went into decline in 2012;
• Following on from the successful launch of its Vinasat-1 satellite in 2008, Vietnam successfully put Vinasat-2 in orbit in May 2012;
• the equitisation of Vietnam’s state-owned telecom operators remains on the national agenda;
• In the meantime, rationalisation of the mobile market has started with Viettel acquiring the cash-strapped EVN Telecom in 2012.

Vietnam – key telecom parameters – 2011 - 2013

(Source: BuddeComm)

Data in this report is the latest available at the time of preparation and may not be for the current year