Good Morning Vietnam
As I rolled out of the airport on my way to downtown Hanoi, the rice paddies and lush green vegetation were familiar images from the past. Vietnam is peaceful and thriving these days, but as you get closer to downtown Hanoi, it is clear there is a new war going on – and the weapon of choice is mobile phones. Vietnam has a population of nearly 90 million, and while 75% still live in rural areas, the country has more than 80 million mobile phone subscribers, with many people holding multiple numbers. Eight service providers are battling for the hearts and wallets of the people of the Socialist Republic of Vietnam. The rural areas are largely untapped, which means that many city dwellers have multiple phones and subscriptions.
A throng of motorcycles and bicycles choke the bustling streets of Hanoi, and the drivers have one hand on the handlebar, and the other on a mobile phone pressed to their ears. While these drivers are making voice calls as they drive, Vietnam, like India and the Philippines is dominated by non- voice traffic, particularly SMS. This is why the next battleground in Vietnam revolves around the imminent launch of 3G Value Added Services, as it will be a natural for consumers to migrate from text to multimedia services.
Multimedia services such as live TV, portal access, video ringback tones, video blogging, and video surveillance will be rolled out over the next 6 months initially in Ho Chi Minh City, Hanoi, and Da Nang, and then nationwide. Smartphone and netbook vendors as well as VAS providers are elbowing for position, as Vietnam is one of the top 15 most populous countries in the world. While inflation has recently become a problem and slowed the high growth rates of the last few years, the outlook remains strong and growth is still projected at 5%+ this year.
In Vietnam, the government controls the service providers and has granted four 3G licenses: Mobifone (mostly state owned by Vietnam Posts and Telecommunications Corporation), Viettel (run by the military), Vinaphone (which will be the first to launch and is also state owned), and a joint venture between Hanoi Telecom and Electricity Vietnam Telecom. Expect fierce competition between these four operators as they compete to hold existing subscribers and capture new ones through the offering of a range of multimedia services at very competitive prices. Subscriber growth is booming, but ARPU continues to drop sharply. Vietnam is poised to become one of the largest mobile markets in Asia, as well as one of the most innovative.
