BMI View: Although Vietnam’s telecoms sector is generally exhibiting declining growth momentum, we believe the market still harbors significant potential given that the bulk of consumers are using basic, low-value services. The 3G sector is particularly attractive as consumers have yet to see the benefits of the service, in addition to other hindrance to adoption such as a lack of content. However, the competitive landscape is dominated by state companies, leaving little opportunities for foreign players.
- 3G subscriber growth is gaining traction in light of low tariff rates and growing network coverage; we expect 19.3mn subscribers by end-2012.
- We have upgraded our mobile subscriber forecasts after a strong performance in mid-2012, although we continue to expect muted growth.
- The internet and fixed broadband industries are experiencing a sharp slowdown; at the end of July 2012, they grew by 1.7% and 5.8% respectively from December 2011.
Key Trends And Developments
The Ministry of Information and Communications has reportedly asked the Vietnam Posts and Telecommunications Group (VNPT) to resubmit its restructuring plan by end-2012. VNPT has previously proposed to merge mobile subsidiary MobiFone and VinaPhone, which would result in an entity with more than 50% mobile market share and 78% in the 3G industry.
The lopsided Vietnamese telecoms market is starting to rear its ugly head after local media reported that the Vietnam Post and Telecommunications Group (VNPT) and Viettel have raised various charges, which are to the detriment of their smaller rivals. In late June, VietNamNet Bridge, citing operators such as CMC TI and Hanoi Telecom-owned Vietnamobile, reported that VNPT and Viettel have raised telecoms circuit leasing charges by about 200-300%.