VietNamNet Bridge – The Vietnam’s telecom market has developed to the threshold with which it is very difficult to develop more mobile phone subscribers. However, foreign investors still believe that there are still a lot of business opportunities here.
Weak and strong points
Furuhashi Goro, Chief Representative of Japanese NTT Docomo in Vietnam, said that there are only four mobile network operators in Japan, but the competition among them is very stiff. Meanwhile, there are 7 network operators in Vietnam, which explains why the competition is even stiffer.
“This is a very big advantage of the market,” he commented.
According to the General Statistics Office, by the end of November 2011, Vietnam had had 116.2 million mobile phone subscribers, which has far exceeded the current population of Vietnam (87 million people).
The chief representative said that at present, mobile phone subscribers in Vietnam are developing very well, while the network quality has been improved, including the quality of 3G networks.
However, Deputy General Director of Ericsson Vietnam Denis Brunetti, has pointed out some problems of the market. The 3G technology has been exploited in Vietnam for more than two years already, but the ARPU (average revenue per user) remains low, the number of 3G subscribers remains modest.
According to him, there are three weak points in the Vietnam’s telecom market. First, most mobile phone subscribers are prepaid ones, while network operators focus on competing in terms of price to attract subscribers. This explains why the ARPU tends to decrease.
Second, Vietnam lacks foreign strategic partners in cooperation.
Third, the mobile phone market has been mostly developed in big urban areas, while network operators have not paid attention to the rural market, and content services are still lacking and still cannot satisfy the demand.
However, he agrees that the weak points could be the opportunities for investors. It is expected that the 3G network would be improved in the time to come, and by that time, the number of 3G apps would also increase. This is really a great potential for investors.
According to Denis Brunetti, Vietnam’s 3G has the capacity of 14Mbps now, and 21Mbps, 42Mbps and 84Mbps in the future, which are enough for the current demand and well support for the future.
However, he has stressed that the efficiency of the network, not the coverage, is the most important thing.
The ways and the opportunities
The executive from NTT Docomo has designed two scenarios for the Vietnamese telecom market’s development.
In the first scenario, if the above said weak points still exist, ARPU would continue decreasing, and when the number of subscribers reaches the saturation level, this would mean that network operators’ revenue would decrease.
In the second scenario, in order to increase the ARPU, network operators need to try to increase the numbers of subscribers.
He said that though network operators should not expect overly high increases in the numbers of subscribers, they would still be able to develop more subscribers, if they can develop more markets and launch new apps. The key here is to develop more services and apps for 3G.
The expanding of the market has been carried out by Ericsson Vietnam, when it cooperates with the Trang An Hospital in Hanoi to successfully try the remote healthcare service via the broadband mobile network
Furuhashi Goro believes that network operators should focus on attracting the clients-businesses. In Japan, the clients-businesses account for 13.3 percent, but the revenue from the market segment accounted for 39.8 percent in 2010.