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Vietnam’s mobile service market gets overly hot 10:29 AM,6/28/2013

The Ministry of Information and Communication has decided to amend a series of policies to drive the mobile service market to a more sustainable development. The market is believed to experience an overly hot development period lately.
ITU has ranked Vietnam at the 8th position in the world in terms of the mobile subscription density. A report of the Ministry of Communication and Information showed that by early 2013, Vietnam had had 148.5 million phone subscribers, of which 93.3 percent is mobile phone subscribers.
However, Tom Kershaw, Vice President of Telcordia, speaking at Mobile Vietnam 2012 conference, noted that the Vietnamese market has witnessed an overly hot development period which shows the signs of unsustainable development.
The statistics show that every Vietnamese person owns up to 1.5 mobile subscribers which is unsuitable to the current economic conditions of the country.
The senior executive, while believing that Vietnam has been going on the right track to develop the telecom market, having obtained high density of mobile subscribers and the rapid development of smart phone users, has given an “absurd” advice that what Vietnam should do now is to reduce the subscription density to 90-95 per 100 people.
In fact, the Ministry of Information and Communication itself has realized Vietnam’s problems, having told mobile network subscribers to strive for a more substantial growth instead of just trying to obtain more subscribers.
The ministry’s policies to restrict the development of virtual subscribers have brought the desired effects. The reports of mobile network operators showed that the number of subscribers registered so far this year is just equal to 1/10 of the last year. This can more truly reflect the current situation of the mobile market which analysts believe has nearly saturated.
Big mobile networks all have affirmed that their numbers of subscribers have been increasing steadily, but very slowly. A senior executive of a mobile network operator has even said that it’s more difficult to retain existing subscribers than developing new ones.
Overly hot development period over
In the new development period, what mobile network operators need to focus on is to retain loyal subscribers and increase the revenue from the subscribers instead of trying to obtain new subscribers.
There are five network operators in the market, but analysts believe that the war in the new period would be the one of the three biggest network operators MobiFone, VinaPhone and Viettel.
Of the three, MobiFone’s business performance has been highly appreciated with good turnover and profit growth. MobiFone has been described as keeping the “western genetic working style” it got during the period of cooperating with the Swedish Comvik, which has been partially “Vietnamized.”
MobiFone is the enterprise with the highest productivity among telecom groups and it is also the biggest tax payer to the State.
MobiFone, VNPT and Viettel could be found in the top 10 of the 2012’s V1000 report released by Vietnam Report – the list of the 1000 biggest tax payers in the four consecutive years of 2008-2011.
Meanwhile, MobiFone ranks the second in the list. The ranking, in the eyes of experts, has much significance, because MobiFone purely provide mobile services. In 2012, every MobiFone’s worker created VND7 billion, thus making MobiFone the mobile network with the highest productivity among telcos.
Source: Tienphong