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Opportunities for telecom services in Vietnam

A press release has claimed that Vietnam’s telecommunication market is becoming more attractive to overseas investors, propelled by the government’s strategy to consider it a key driver for the country’s digital economy and step-up of the divestment of state-owned telecom corporations.

Additionally, the government’s plans for the fourth industrial revolution along with smart cities, startups, and the National Innovation Network Programme, enabled by state-of-the-art 4G/5G, internet-of-things, and mobile telecommunication networks, are helping the ICT sector record strong revenue growth.

Last year was a bustling one for the local telecommunications and internet market as a number of telecoms service operators announced a trial run of 5G – the next generation of wireless network technology.

Several more Vietnamese social networks also appeared during the year, continuing the trend of increased bandwidth and lowered charges.

The release noted that in 2020 and 2021, there will be some obvious trends in Vietnam. First, the commercial launch of some big telecoms service operators. The launch will be made gradually with careful steps towards market demands and economic efficiency.

The other is growing demands for bandwidth and support services for online jobs as a way people adapt to the serious impacts of COVID-19.

Moreover, the tendency to use the Internet on mobile phones is increasing and will result in the development of new applications.

5G services present huge opportunities for the country’s three biggest telecoms service operators of Viettel, VNPT, and MobiFone. And as expected, 5G will promote the development of new applications.

At the front of the pack for mobile service users, these three operators have gained the majority market share, with not much room left for international players. Regarding the fixed internet market, there are several operators such as FPT, CMC, Hanoi Telecom, NetNam, and some foreign firms, but the opportunity for international service operators is not vast.

The release added that international players will take into consideration some possible ways to venture further into the market, perhaps by investing in local partners, or by focusing on other service segments that have much room to develop and compete, such as data centres, the cloud, and other platform services.

Besides that, opportunities exist for foreign exporters in providing equipment and infrastructure and value-added services, such as developing wireless and alternative broadband technologies as well as partnering with established network operators to provide 3G, 4G, and 5G services.

Further, since the satellite-based telecoms market is not yet developed in Vietnam, it is expected there will be an opportunity for such companies to provide satellite services into the country on a cross-border basis.

Meanwhile, all telecom service companies are interested in the EU-Vietnam Free Trade Agreement. However, their awareness and knowledge about this landmark deal are varied, and its impacts on them are not always similar, the release noted.

In line with the roadmap and commitments to the agreement, there will not be much impact on local competition among players in the industry in the short term. However, in the next three or five years, the situation will possibly change and lead to an increase in competition in the market.

Vietnamese players must craft careful preparations and strategies to adapt to possible changes in market demands, technologies, and competition.

According to the Vietnam Telecommunications report for the first quarter of 2020, the most comprehensive collection of market intelligence products and services on the web, newly-announced plans to equities two government-owned operators in VNPT and MobiFone are dominating the headlines again, with the latest plans another indication that the government wants to open up the market to overseas capital in order to stimulate further service innovation.

The association sees strong growth opportunities in the 4G mobile data segment, which will remain the key revenue driver towards the medium term.

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