Telecommunications Equipment and Services in Vietnam

An Expert's View about Telecommunications in Vietnam

Last updated: 4 Mar 2011


Vietnam’s telecommunications sector is among the world’s fastest growing telecommunications markets. The Government of Vietnam (GVN) has articulated its commitment to boosting the development of the Information and Communications Technology (ICT) industry, particularly in telecommunications and Internet infrastructure development, software production, Information Technology (IT) education promotion, and other forms of human capital development.


To meet tough competition and increasing market demand, Vietnamese telecommunications operators understand they need to enhance their competitiveness by adopting new technologies and by enhancing their human resource capabilities. They are seeking considerable transfer of technologies and know-how via foreign involvement in the telecommunications sector, although the market will open only at a gradual pace in line with Vietnam’s WTO commitments.


In 1988, just after the “doi moi” (renovation/open door) policies carried out by the GVN, Vietnam had less than 200,000 phone subscribers with a teledensity of 0.18 lines/100 inhabitants. In 2000, Vietnam grew to approximately 2.6 million fixed-line subscribers and 640,000 mobile subscribers. In 2006, new phone subscribers in Vietnam more than doubled the total number of subscribers added in the 25-year period of 1975-2000, and the number of 18.5 million new telephone subscribers added in 2007 tripled that of the period of the previous 3 years. According to Vietnam’s Ministry of Information and Communications (MIC), as of December 2009, Vietnam has approximately 130.4 million telephone subscribers (mobile and fixed line), with a teledensity of 152.7 lines/100 inhabitants. See figures below for more details.


The major technologies used in Vietnam include cable, satellite, and wireless cable. Major broadband networks are deployed via ADSL (asymmetric digital subscriber line), VDSL (very high rate digital subscriber line), and leased lines. WiFi is deployed in the major cities, and local ISPs are seriously contemplating WiMax (Worldwide Interoperability for Microwave Access) as a platform to popularize the Internet nationwide. In terms of network convergence, voice/data networks are available nation-wide, while “triple play” networks (voice/data/video) and broadband services have been growing in the big cities. VoIP (Voice over Internet Protocol) services are also expanding. Telecommunications companies own the Internet infrastructure and provide VoIP services. There are also several privately owned VoIP providers, all of which lease lines from major telecom carriers. Four licenses for 3G (third generation) wireless technology were issued by MIC in August 2009 to Viettel, Mobifone, Vinaphone, and an EVN Telecom/Hanoi Telecom joint venture. At present, 3 operators have officially provided their services, namely: Vinaphone, Viettel and MobiFone. According to industry estimates, Vietnam will have approximately 4.5 million 3G subscribers by 2013. So far, there are 10 local Internet service providers permitted to run WiMax pilot tests, and MIC is planning to license a selected number of service providers through a “beauty contest” in 2010


As a new member of the WTO, Vietnam will continue to implement tax cuts as part of its commitments under the Information Technology Agreement. Specifically, categories currently in a 5 percent tax bracket will decrease evenly to 0 percent in 2010; those in a 10 percent bracket will decline evenly to 0 percent in 2012 and those in a 20-30 percent bracket will go down evenly to 0 percent in 2014.


On November 23, 2009, the National Assembly passed the new Telecommunications Law and the Ratio Frequency Law, which will take effect in July 2010, and will open up new opportunities for trade and investment in the telecommunications sector. Notwithstanding, a major outstanding issue is a requirement for foreign companies to partner with SOEs for facilities-based services, which the Ministry of Information and Communications has indicated it will address via a regulatory circular prior to the implementation of the new law.


Excessively rapid growth, including price competition, problems with network connectivity and indifference to the fixed telephone market could cause some bumps in the road affecting the development of Vietnam’s telecommunications industry.


Selection of a local partner is not only essential to maximize business development opportunities but also for the provision of certain services, as required pursuant to Vietnam’s limitations to its WTO telecommunications market access commitments.


As the hi-tech industry continues to develop in Vietnam, prices will continue to go down, investment capital will increase and the business environment will become more competitive. By entering the market via the road of equitization/privatization, foreign telecommunications companies will best approach this emerging market in a step-by-step fashion.


Best Prospects/Services

American suppliers should find excellent opportunities in almost every sub-sector, from equipment for telecommunications infrastructure to value-added services. Below is an analysis of the major best-prospect sub-sectors of the telecommunications sector in Vietnam.


Fixed Telephone Networks: As of January 2010, according to Vietnam’s General Statistics Office, Vietnam has 135.3 million subscribers, of which fixed telephone and cell phone subscribers make up 19.6 million and 115.7 million respectively. That is, the number of cell phone subscribers is nearly 6 times higher than fixed telephone ones. Telephone access is currently available to all communities nationwide. State owned VNPT is the major landline telephone carrier in this market with market share of 70.98 percent in 2008. Ministry of Defense owned Viettel is second with a 34 percent market share. As the traditional PSTN (public switched telephone network) fixed telephone service is no longer a “cash cow” subsector, Vietnam’s telcos are instead developing wireless fixed telephone service solutions.


Mobile Phone Networks: At present, there are 8 licensed cell phone network operators in Vietnam. Nearly 90 percent of the mobile phone market share in Vietnam is currently divided between 3 major network operators: Viettel Mobile, MobiFone, and Vinaphone. According to figures reported by network operators to Vietnam’s Ministry of Information and Communications (MIC), as of January 2009, with a 86 million population, the total number of mobile phone subscribers in Vietnam was over 170 million, of which more than 90 percent were pre-paid subscribers. However, industry specialists estimate that there are only 50 million actual subscribers (i.e. being operational). MIC has been working on the actual number of cell phone subscribers with network operators, and the official figures are expected to be released soon in 2010. According to MIC’s statistics in 2008, Viettel leads the mobile sector with 38.07 percent market share, and VNPT-a telecommunications company that runs the two sister cell phone networks of Vinaphone and MobiFone accounted for a combined share of 51.85 percent.


In terms of the technologies used in Vietnam’s mobile phone networks, eight licensed mobile network operators run five global systems for mobile communications (GSM) networks (VinaPhone, MobiFone, Viettel, Vietnamobile, and Beeline), two run code division multiple access (CDMA) networks (S-Fone, and EVN Telecom), and one or two potential new entrants, including Indochina Telecom and VTC Telecom, plan to run their services based on other operators’ existing networks. GSM mobile networks presently account for more than 95 percent of the mobile phone market share.


Internet: The Internet market has also developed rapidly in recent years. Internet usage has increased in popularity as evidenced by the entry of many Internet service providers (ISPs) into the market.


As of December 2009, the number of Internet subscribers in Vietnam stood at 22.78 million, with 26.55 percent of the population using the Internet regularly. Presently, the country’s total international and domestic connection bandwidth are 89,619 Mbps and 114,009 Mbps respectively. However, Internet density is not equally spread throughout the country and is concentrated in the urban centers, especially Hanoi and HCMC. Broadband market demand has increased so rapidly that current market supply is not sufficient to meet demand. The broadband market is shared among 2 major ISP’s: VNPT and Viettel. Below are the charts reflecting the market share of broadband subscribers in Vietnam.


Satellites: Vietnam's first communications satellite called Vinasat-1 was launched on April 18, 2008, providing roughly 15 years of service. This $200 million satellite was manufactured by the United States’ Lockheed Martin and has a lifespan of 15 years. Vinasat is a geostationary satellite, employing 8 extended C-band channels and 12 Ku-band channels to provide broadcast and telecommunications service (video, data, voice) to countries in the Asia-Pacific region such as Vietnam, Laos, Cambodia, India, Australia, Japan, Korea, part of China, and other East Asia countries. It has the capacity to provide around 120 digital television channels and tens of thousands of Internet data transmission and telephone channels. Vinasat-1’s principal ground station is in Northern Vietnam (Que Duong, Ha Tay), and back-up ground station in Southern Vietnam (Binh Duong Province). The satellite has a transmission site in Hanoi and terrestrial networks in Hanoi, Ho Chi Minh City and Da Nang City. Vinasat-1 is connected with Intelsat, Thaicom and others.


Since the Vinasat-1 launch, it was forecasted that it will be necessary to launch the second satellite in within 5-7 years. However, only one year later, the Vinasat-2 project was kicked off as 70 percent of Vinasat-I’s capacity was consumed and it is estimated to be fully used in 2010. There are two major factors for the early start of Vinasat-2 project specified as follows: by 2012 Vietnam must have a satellite on the orbit 131.80 East and the rapid use of Vinasat-1’s capacity. Vietnamese Prime Minister Nguyen Tan Dzung thus approved an investment project for Vietnam’s second commercial satellite, which is scheduled to be launched in 2012. VNPT, the investor assigned by GVN, plans to sign the satellite tender package by the end of March 2010. The Prime Minister has approved in principle some special policies for this project to ensure its pace. VNPT plans to use consultants again to select the satellite manufacturer and consultants to supervise its manufacturing. Vinasat-2 will have a larger capacity, be heavier, and have a higher frequency band capacity. Vinasat-2 will cover Vietnam, Laos, Cambodia, Thailand and part of Myanmar. Its minimum lifespan is 15 years. Vinasat-2 will have from 24-30 transceivers compared to Vinasat-1’s 20.


Vietnam has thought of the next generations of satellites, e.g. Vinasat-3, because this is a logical and normal evolution in the evolution of the telecom satellite system for the country. When Vinasat-2 runs for 2-3 years and 70-80 percent of its capacity is in use, Vietnam will surely consider launching a third satellite. Projects to follow, however, will depend on actual market demand.


Apart from telecommunications satellites, Vietnam also has plans for another satellite: a natural resources, environment and disaster monitoring small satellite (referred to as VNREADSat-1). VNREDSat-1 would be a small-sized earth observation satellite, 150 kilograms in weight with a five-year life expectancy. The satellite is scheduled to be operational in 2012 and will be used to help Vietnam map its natural resources and provide information about the environment and disasters. The project would cost an estimated $60-100 million and help free Vietnam from reliance on satellite images provided by other countries. Any contractor that meets the requisite conditions for technology and capital will be allowed to participate in Vietnam’s satellite projects.


Broadcasting: Vietnam’s broadcasting industry has developed rapidly in recent years. At present, Vietnam has one national television station (VTV), one national radio station (VOV) and four inter-provincial broadcasting stations. Additionally, each of the country’s 63 provinces and cities has its own local broadcasting station. Apart from these broadcasters, other new entrants include cable television, satellite (DTH/Direct-to-Home) and on-line television providers. In terms of network convergence, as noted above, voice/data networks are available nation-wide and “triple play” networks (voice/data/video) and broadband services have been developing in the large cities. Moreover, 40 percent of the country’s broadcasting facilities have been digitalized. Market growth in 2009 was estimated to reach approximately 28 percent and is expected to reach 30 percent in the next 2-3 years. Market size in 2009 was estimated to be valued at $300 million. Vietnam has developed and maintains a large national transmission network including parallel digital Ku-Band and C-Band satellite carriages and hundreds of relay stations in order to ensure coverage of Vietnamese territory.



American exporters will find tremendous opportunities in almost every sub-sector of the ICT, telecommunications and broadcasting industry.


Below are listed major buyers for telecommunications equipment and services: Telecommunications service providers:

- VNPT (Vietnam Posts and Telecommunications Group)

- VMS (Vietnam Mobile Telecommunications Services Company), a subsidiary of VNPT

- EVN Telecom (Electricity of Vietnam’s Telecommunications Company)

- Saigon Postel/SPT (Saigon Posts and Telecommunications Service Corporation)

- G-Tel (Global Telecommunications Corporation)

- G-Tel Mobile (G-Tel Mobile Company, a subsidiary of G-Tel)

- FPT Telecom Company

- Hanoi Telecom (Hanoi Telecommunications Company)

- Vishipel (Vietnam Maritime Communications and Electronics Company)

- Viettel (Military Electronics Telecommunications Corporation)

- VTC (Vietnam Multimedia and Communications Corporation)

- ?ông D??ng/Indochina Telecommunications Company

- Piacom (Petrolimex Information Technology and Telecommunications Company)

- Vietnam Airlines


Internet Services Providers: Below are the Top 5 among 64 licensed ISPs:

- VNPT (Vietnam Posts and Telecommunications Group)

- Viettel (Military Electronics Telecommunications Corporation)

- FPT (FPT Group)

- SPT or Saigon Postel (Saigon Posts and Telecommunications Service Corporation)

- EVN Telecom (Electricity of Vietnam’s Telecommunications Company)


Below are the major buyers for broadcasting equipment and services:

- VTV (Vietnam Television)

- VOV (Voice of Vietnam)

- VTC (Vietnam Multimedia and Communications Corporation or Vietnam Television Corporation)


Read the full market research report


Posted: 08 July 2010, last updated 4 March 2011

See more from Telecommunications in Vietnam

Expert Views    
ICT Sector   By UK Trade & Investment
Telecommunications Equipment and Services in Vietnam   By U.S. Commercial Service Vietnam
ICT sector in Vietnam   By UK Trade & Investment
Hot Tips    
Information Technology Hardware and Software in Vietnam   By U.S. Commercial Service Vietnam
Information and Communications Technology Industry   By U.S. Commercial Service Vietnam