Vietnam’s 10 remarkable telecommunication and information technology events in 2012

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1. Prime Minister planned to have at least 3 mobile networks to compete

On July 31st 2012, the Prime Minister approved the national telecommunication development plan till 2020. Accordingly, in every important telecommunication services such as cellular, broadband internet, fixed landline and international landline, there must have at least three service providers to ensure competition.

This plan will ensure the sustainable development of telecommunication market in the direction of quality and efficiency on the basis of creating an environment for fair and healthy competition. Besides, the telecommunication enterprises especially state-owned enterprises will be reorganized toward an inefficient operation. Furthermore, transfer, merger, acquisition other telecom businesses to form 3 – 4 powerful groups or corporations will be allowed.

Thus, the national telecommunication development plan till 2020 will be an important basis for restructuring the Vietnam Posts and Telecommunications Corporation (VNPT) in connection to the possiblity of merging the two mobile networks VinaPhone and MobiFone.  If VinaPhone and MobiFone are allowed to merge, this will create a mobile market in the hands of two giant corporation that are VNPT and Viettel Corporation (Viettel), accounting for 95% market share. Meanwhile, the mobile market is preparing for the departure of small networks.

2. Beeline exits from Vietnamese market  

On April 23rd 2012, after Vimpelcom Group does not see chances, they exits from Vietnam by selling shares in Beeline network for Gtel Mobile at discounted level for 45 million USD.  A clause after Vimpelcom exits from Vietnam market is that Gtel Mobile will stop using the Beeline brand after six months from the date of transferring.

On September 17th 2012, Gtel Mobile announced the new brand Gmobile – officially replace and terminate the use of the Beeline brand in Vietnam. However, Gmobile is still having difficulties in the development of new subscribers, when the mobile market is still considered as a game of the big names like VNPT and Viettel.

3. MB24 scams selling more than 700 billion VND in the form of multi-level virtual shop

 The event that many leaders of MB24 network (Online sales training JSC) were arrested and investigated has caused the market trembling. This is a special case that cought attention by the public since it involved high technology and impacted people being mainly low-income people, people that buy online shop but has never used computer.

Within a year, the network has grown to more than 100,000 shops with the amount paid into the system of more than 700 billion VND. On July 25th 2012, the Vietnam E-Commerce Association (VECOM) has announced the termination of this company with reason: the company’s business activities caused damaging to the reputation and violating the rules of the Association. The investigation showed that the process faced many difficulties since the first cause is the lack of legal instruments to handle this model of business.

4. Central Resolutions point out that technology is national infrastructure

On January 2012, The 4th Conference of the the XI Party issued Resolution 13 in which stated that “Information technology and communication are infrastructures of the national infrastructure”. This Resolution is expected to develop Vietnam’s information technology and promote the development of the whole economy.

5. Successfully launched Vinasat-2 satellite

On May 16th 2012, Vinasat-2 satellite of Vietnam has been successfully launched into orbit. This event has not only showed significant representation the sovereignty of Vietnam, but also affirmed Vietnam’s determination to invest in the telecommunications sector, to further strengthen the capacity of Vietnam’s telecommunications network infrastructure.

Capital investment for this project is 280 million USD, of which 80% is through loan and 20% is from of VNPT. On July 4th 2012, VNPT has taken Vinasat-2 satellite, officially began business operation and management of this satellite. It is expected that Vinasat-2’s capital will be recovered within 10 years  The 5 – 6 remaining years, the satellite will help VNPT make profit.

6. Viettel surpassed VNPT the first time in terms of revenue

At the end of 2010, VNPT’s revenue reached 100,000 billion VND and Viettel reached 91,000 billion VND. In 2011, these two corporations both reached 120,000 billion VND in terms of revenue, but profit of Viettel was 20,000 billion VND, while VNPT achieved only 10,000 billion VND.

At the end of 2012, this race was finalized when VNPT’s revenue is of 130,000 billion VND and  profit of 8,500 billion VND. Meanwhile, Viettel has surpassed VNPT with revenue of 140,000 billion VND and 27,000 billion VND in profit. Thus, Viettel’s revenue in 2012 is 10,000 billion VND more than VNPT but profit of Viettel is 3 times more than VNPT.

After years of occupying the unique position in terms of revenue, VNPT for the first time was surpassed by Viettel.

7. Prepaid roaming charges 

On October 23rd 2012, the Ministry of Information and Communications issued a Circular guiding the regulations on roaming charges for prepaid subscribers which is of 25,000 VND, for postpaid subscribers of 35,000 VND this is applicable from January 1st 2013. Updates in the Circular is the roaming charges for prepaid mobile subscribers.

Regulations on roaming charges for prepaid subscribers is a movement to regulate the current mobile market development towards market stability and avoid the use of SIM instead of scratch card.

8. S-Fone fired most of their staffs

S-Fone was mentioned as a pioneer breaking the monopoly of the Vietnamese mobile market.  Now it was also considered as typical for the most dramatic case in  Vietnamese mobile market. The lack of investment has led S-Fone to plunge.  Since S-Fone does not have money to operate and pay rent fee for base stations, it has to narrow the network.

Fewer subscribers, lack of money to maintain the system are probably the most important reasons why S-Fone has to mass termination of contract with employees.

9. Music copyright charges

On November 1st 2012, many Vietnamese music websites claim the charges for downloading music with a fee of 1,000 VND / music file (online listening with low quality is still free). This is the result of collaboration between the Recording Industry Association of Vietnam (RIAV) with most of the websites that offer music service in Vietnam.

This partnership is initially be seen as a positive movement to tackle music piracy in recent time.

10. Forced to auction the mobile frequency

On March 12th 2012, the Prime Minister issued Decision 16/2012/QD-TTg on auction, transfer the rights to use radio frequencies. Accordingly, telecommunications companies would like to have radio frequency will have to auction the right to use instead of free as before.

According to the Decision, businesses are licensed to use radio frequencies through auctions transferable right to use the frequency band, radio frequency channel for other business for a period of at least three years from the date of issuance of the license to use radio frequencies. This policy shows the determination to manage frequency according to the market mechanism.

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