BMI's Executive Summary

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Vietnamese mobile operators are preparing themselves for a price war, with Viettel setting the trend. The operator announced that it would look to reduce its mobile tariffs by as much as 15%, pending Ministry of Information and Communication approval. Similarly, VinaPhone and MobiFone both followed, with the latter stating that it would go further, with a reduction of between 25% and 28% in an effort to boost subscriber figures and to fill out the existing capacity available over its network. Furthermore, the smaller operators CDMA-based HT Mobile, S-Fone and EVN Telecom could also be swayed to follow Viettel in reducing tariffs. This should enable mobile operators to grow their subscriber bases, as the rest of the economy heads towards double digit inflation, leading to higher prices. However, the authorities have remained tolerant of a stronger currency in order to contain inflation. There are several reasons that have forced the government to allow a strong currency: rapid economic growth, rising foreign direct investment (FDI), rising remittances, equity inflows, inflationary pressures and increased foreign aid.

The mobile sector has seen a flood of FDI, particularly with MobiFone set for partial privatisation in mid- 2008. Both NTT DoCoMo and Telenor have announced of their intentions to bid for a 30% stake, with the Japanese operator setting aside US$1bn. Its sister unit, NTT Communications has also announced a joint venture with VNPT over the creation of data centres in both Hanoi and Ho Chi Minh City (HCM) city in 2008. Meanwhile, Russia's VimpelCom has signed an agreement with the Vietnamese government over the creation of a GSM network into which it will invest up to US$1bn over the next few years. Interest by foreign companies in the Vietnamese mobile market has also extended to the 3G sector.

Vietnam's government has finally approved the deployment of both 3G licences and mobile WiMAX licences in 2008. BMI does have some reservations with regard to this. GDP per capita in the country remains relatively low compared with a country such as China. With mobile services set to become cheaper, the majority of Vietnamese will favour prepaid tariffs to those of postpaid or 3G. Furthermore, the cost of 3G handsets will be out of reach for many Vietnamese, not to mention that the number of handset models to be made available will be few. China, which has been witness to a rapidly-developing mobile sector, has also yet to award 3G licences, and it would appear that the only demand for NGN will arrive from major cities and those supporting the Beijing 2008 Olympics.

Meanwhile, we have witnessed a soaring demand for broadband services. This has been helped by greater PC and laptop penetration rates, greater government-led investment, the growth of foreign companies, which have economically empowered the local workforce, as online content continues to grow. BMI has retained its existing forecast, but would expect that by the end of our forecast period 2012, the number of broadband subscribers to have reached a little over 10mn subscribers.

Contents

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Chapter 1 - Executive Summary

Chapter 2 - Business Environment

Asia

Vietnam

Vietnam Business Environment Industry SWOT

Chapter 3 - Industry Forecast Scenario

Fixed-Line

Table: Vietnam Telecoms Sector – Fixed-Line – Historical Data & Forecasts

Mobile

Table: Vietnam Telecoms Sector – Mobiles – Historical Data & Forecasts

Internet

Table: Vietnam Telecoms Sector – Internet – Historical Data & Forecasts

Chapter 4 - Macroeconomic Forecast Scenario

Table: Output & Population

Chapter 5 - Country Snapshot: Vietnam Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Chapter 6 - Competitive Landscape

Competitor Analysis

Table: Key Players – Vietnam Telecoms Sector

Key Players

Fixed-Line

Table: Regional Fixed-Line Penetration Overview

Mobile

Table: Regional Mobile Penetration Overview

Internet

Table: Regional Internet Penetration Overview

Market Data Analysis

Fixed-Line

Mobile

3G

Industry Developments

Chapter 7 - Company Profiles

Regional Case Study – Motorola

Table: Motorola Net Sales by Region (US$mn)

Table: Motorola Market Sales by Locality of End Customer

Table: Leading Mobile Phone Handset Sales (mn) – Q306

Vietnam Posts &Telecommunications

S-Fone (S-Telecom)

Vinaphone

MobiFone

Viettel

Chapter 8 - BMI Forecast Modelling

How we generate our industry forecasts

Telecommunications Industry

Sources

Chapter 9 - Appendix: Regional Demographic Data

Table- Manufacturing Wages (ave per annum), US$

Table - Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Competitive Landscape for Asia Telecommunications Reports: Sample of Companies Ranked

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Commentary on key operators highlighting ownership structures, latest available revenue figures, market share analysis and ARPU counts. BMI forecasts for all headline macroeconomic indicators, including real GDP growth, inflation, fiscal balance, trade balance, current account and external debt. Company SWOTS Covering all leading telecommunications operators and manufacturers operating in each market, including competitive intelligence on geographic presence and competitive positioning against local companies; local market share; leading products, services and technologies; foreign direct investments, projects, merger and acquisition strategies.

Network of Asian Telecommunications Sources

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BMI's Asian Telecommunications Reports are based on an extensive network of multilateral organisations, government departments, telecommunications industry associations, chambers of commerce and company reports. Information sources include: