2016 Vietnam - Telecoms, Mobile, Broadband and Digital Media - Statistics and Analyses

Vietnam transitions to potentially more open mobile market

The Vietnamese government is finally addressing the restructure of the state-owned telecom conglomerate VNPT. After numerous false starts and a variety of proposals, it finally decided to hive off MobiFone from the state-owned parent and eventually sell shares via an IPO. The process is now irreversible. VNPT’s internal restructure also saw some major changes which included Vinaphone, its remaining mobile subsidiary. The revamped Vinaphone-VNPT was launched in August 2015.

Vietnam’s mobile market is growing, but growth had slowed significantly in 2015 and into 2016; fixed-line subscriber numbers have declined sharply; and broadband is booming, boosted by mobile broadband services and fibre-based fixed broadband. Much earlier, the government had set ambitious targets in the telecom sector for the expansion of infrastructure. But it fell well short of these targets. Things began to change, however, mainly on the back of an increasingly competitive mobile market. Vietnam’s mobile market has grown strongly over the last decade in particular. This was evidence that the competition model the government had put in place, although limited, was in fact working. The mobile market stalled in 2013, suffering a major correction in that year. By 2015/16 growth had returned but was generally slower, as already noted.

In the meantime, having come late to the internet, Vietnam is finally embracing the higher access speeds offered by the various broadband platforms. Although there has been a surge in subscriber numbers, fixed broadband remains a relatively small but expanding market segment. The fixed broadband services have been largely based on DSL technology; more recently, fibre-based broadband services are starting to replace DSL as the fixed broadband option, with FttH subscriptions growing by more than 150% in 2014. Most significantly, the arrival of mobile broadband has seen much wider access to faster internet speeds. The penetration of mobile broadband services was more than four times that of fixed broadband by 2015. An important aspect of the internet market is that the government has been particularly active in the development of cyber laws, no doubt because of its deeply ingrained political culture of central control.

The significant presence of fixed-line services throughout the country had been against the global trend for a developing economy (a high point of 20% penetration in 2009); however, fixed-line numbers have declined dramatically in recent years and by 2015 penetration had fallen to around 5%.

It needs to be said that the broad telecom market growth in Vietnam is happening amidst a sometimes confusing set of statistics. The figures published both by the government, the operators and other industry sources are often contradictory and earlier figures are often revised. In this report, where there is any doubt about the statistics issued, BuddeComm publishes in its tables what are considered the most likely figures or provides estimates.

Key developments:

• Vietnam’s broadband market is growing strongly, on the back of the mobile broadband sector;
• the mobile market had reached 147% penetration milestone coming into 2016;
• overall growth in mobile subscribers has slowed;
• despite extensive nationwide 3G rollout, subscriber numbers were lower still than expected;
• the MIC had been preparing for 4G in 2015, with the licensing process expected in 2016;
• the fixed-line market continues to be in decline, having dropped by 70% from its 2009 peak;
• Vietnam’s second satellite, Vinasat-2, has been launched;
• MobiFone, having been hived off from VNPT, by 2015 was being prepared for an IPO;
• a revamped VNPT-Vinaphone operation was formally launched in August 2015;
• fibre-based broadband subscribers were growing at an annual rate of 100%+ into 2015;
• Samsung became the largest foreign investor in Viet Nam when it launched its project for a US$3 billion telephone handset manufacturing and assembling plant;
• the MIC has set 2017 as the target date for introducing Mobile Number Portability (MNP).
• The government continues to exercise tight control of internet, with clamp downs from time to time.

Companies mentioned in this report:

VNPT; Vinaphone; Mobifone; Viettel; S-Fone; EVN Telecom; Vietnamobile (Hanoi Telecom); GMobile/GTel; Vietnam Datacommunications Company (VDC); FPT Telecom; SaiGonNet; NetNam; Vietnam Television Technology Investment and Development Company (VTC); FPT Telecom; Vietnamobile (Hanoi Telecom); Gmobile (formerly Beeline); Facebook; Google; Vietnam Cable TV (VCTV); SCTV; K+; Alibaba, EBay; BTS-Hanoi; HTVC-HCM City; VTC; Qualcomm; Red River Delta; CMC; DN khac.