2014 Vietnam - Telecoms, Mobile, Broadband and Forecasts

After a ‘correction’ in subscriber numbers in 2013, Vietnam’s mobile market moves forward.

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 was been a substantial moderation in growth over the last few year; in fact the year 2013 saw the mobile market experience a correction, as the mobile numbers were revised downwards. In the meantime, the internet market, and particularly the roll-out of broadband internet, was still in a relatively early stage of development, there has been a significant rise in the country’s online access over the last decade. Most importantly, 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 was clearly expanding in a strong manner, 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 process in place for regularly revising the mobile subscriber statistics being published. 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, what are considered the most likely figures are published in our tables of statistics.

In any event, as already noted, there is no doubt 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 was falling to somewhere below 10% a year the market remained competitive and offered a good platform for further growth and development.

As with the mobile market, the government also seemed to have been hedging somewhat on reporting fixed-line statistics. It finally became clear, however, that this market segment has been seriously struggling and was in major decline. Whilst it may well have ‘flattened out’, there is no doubt that the fixed penetration halved in just four years, from 20% in 2009 to 10% in 2013. This is not to underestimate the value of the fixed-line infrastructure that has 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 44% coming into 2014. The broadband segment growth has been particularly strong, although much more of the growth was in mobile wireless broadband rather than in fixed broadband.

Over the years Vietnam’s progress on regulatory reform in the telecom sector has moved along in an erratic fashion. Certainly good progress was made in the lead up to WTO accession, but many initiatives stalled subsequently. By 2014 the government was finally addressing the restructure of VNPT. After numerous false starts and a variety of proposals, it was finally agreed to hive off MobiFone from the state owned parent and sell shares via an IPO. Steps had already been taken that indicated the process was finally irreversible. The IPO was set for 2015.

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 one of the foreign telcos to depart, selling its shares in the Beeline operation to its local partner. A general process of rationalisation has clearly been taking place in the market.

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