Vietnam Telecommunications Report Q3 2012

Date: July 3, 2012
Pages: 96
US$ 1,175.00
Report type: Strategic Report
Delivery: E-mail Delivery (PDF), Download
ID: V46C5AB5953EN

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Growth opportunities in the Vietnamese telecoms sector appear to be diminishing due to market saturation and the dominance of state-owned entities in a highly competitive landscape. BMI believes that operators should re-evaluate their strategy and focus on trying to leverage on their existing base of subscribers to generate strong revenues. Meanwhile, the government should increase its efforts to promote a level playing field and boost ailing foreign investor confidence.

Data from the General Statistics Office (GSO) indicate that the Vietnamese mobile industry has been experiencing weak growth. We believe that the phenomenon will persist given the high mobile penetration rate. By end-2016, we envisage 132.373mn subscribers, representing a penetration rate of 141.9%. Meanwhile, we believe that the slow growth in the mobile sector could explain the stability experienced by Vietnam’s fixed-line market. We forecast the number of fixed-line subscribers to gradually decline to 13.035mn in 2016, down from 14.725mn in 2012. Lastly, we predict that there will be 5.938mn fixed broadband subscribers in Vietnam at the end of 2016. The sector is expected to experience significant threat from mobile broadband solutions.

In April 2012, Russia’s VimpelCom announced that it has agreed to sell its 49% interest in GTEL Mobile to its local partner in the venture, Global Telecommunications Corporation. BMI believes consolidation and rationalisation in the Vietnamese market is urgently needed, and we see this development as further proof that foreign or private investors have little room to benefit from Vietnam's economic growth. The competitive landscape could see further deterioration if the government approves the Vietnam Posts and Telecommunications Group’s plan to merge its mobile operators MobiFone and VinaPhone.

Vietnam fell to 16th position in BMI’s latest Asia Pacific Telecoms Risk/Reward Ratings with a Telecoms Rating score of 42.4. Latest consumer price inflation figures, which signal a broad-based decline in inflationary pressures across the economy, reinforces our view that inflation is no longer at the top of the State Bank of Vietnam (SBV)'s agenda. Instead, we expect growing evidence that the Vietnamese economy is in the midst of a sharp correction to place increasing pressure on the SBV to speed up its monetary easing cycle in a bid to support economic growth. In lieu of falling price pressures and a worsening economic growth outlook, we continue to expect an additional 100bps worth of cuts in 2012, bringing the policy rate down to 11.00% by the end of the year.

Vietnam's biggest political question over the coming decade is whether one-party rule under the Communist Party of Vietnam (CPV) will face growing calls for democratisation, as was the case in other major South East Asian countries. While our core scenario envisages the CPV transforming itself into a technocratic administration, it faces major economic challenges which if mismanaged could lead to widespread unrest. On the foreign policy front, we expect an increasingly powerful China to drive Vietnam further into the camp of Asian nations with close relations with the US.
Executive Summary
SWOT Analysis
Vietnam Mobile SWOT
Vietnam Wireline SWOT
Vietnam Political SWOT
Vietnam Economic SWOT
Vietnam Business Environment SWOT
Risk/Reward Ratings
Asia Pacific
  Table: Asia Pacific Telecoms Risk/Reward Ratings
Industry Forecast Scenario
  Table: Telecoms Sector – Mobile – Historical Data And Forecasts
  Table: Telecoms Sector – Mobile ARPU – Historical Data And Forecasts (US$)
Fixed Line
  Table: Telecoms Sector – Fixed Line – Historical Data And Forecasts
  Table: Telecoms Sector – Internet – Historical Data And Forecasts
Market Data Analysis
  Table: Vietnam Mobile Market, March 2012
Mobile Contract Wins
  Table: Mobile Contract Wins
Mobile Operator Data
  Table: Vietnam Mobile Market Overview
Mobile Content
Regional Outlook
  Table: Selected NFC Developments, 2011
Country Outlook
Value-Added Services Timeline
  Table: Selected VAS Services
Fixed Line
Long-Distance Services
Fixed Wireless
Mobile Broadband
  Table: Vietnam – 4G Triallists
Wireline Contract Wins
  Table: Wireline Contract Wins
Regulatory Environment
Vietnam: Regulatory Bodies And Their Responsibilities
Legislation And Market Liberalisation
Licensing And Spectrum
Regulatory Developments
Competitive Landscape
Competitor Analysis
  Table: Key Players – Vietnam Telecoms Sector
Company Monitor
Samsung Electronics
  Table: Samsung Electronics Financial Performance (KRWbn)
Selected Operators Profiles
Vietnam Posts & Telecommunications (VNPT)
S-Fone (S-Telecom)
EVN Telecom
FPT Telecom
Regional Telecommunications Penetration Overview
Fixed Line
  Table: Regional Fixed-Line Penetration Overview
  Table: Regional Mobile Penetration Overview
  Table: Regional Broadband Penetration Overview
BMI Telecoms Industry Glossary
  Table: Glossary Of Terms
Country Snapshot: Vietnam Demographic Data
Section 1: Population
  Table: Demographic Indicators, 2005-2030
  Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education And Healthcare
  Table: Education, 2002-2005
  Table: Vital Statistics, 2005-2030
Section 3: Labour Market And Spending Power
  Table: Employment Indicators, 1999-2004
  Table: Consumer Expenditure, 2000-2012 (US$)
BMI Methodology
How We Generate Our Industry Forecasts
  Table: Key Indicators For Telecommunications Industry Forecasts
Telecoms Business Environment Ratings
Risk/Reward Ratings Methodology
  Table: Ratings Indicators
  Table: Weighting Of Indicators
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