Opportunities abound for telecoms services

09:00 | 10/04/2020
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.
1486p10 opportunities abound for telecoms services
Vu The Binh General secretary Vietnam Internet Association

In addition, 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, the Internet of Things, and mobile telecommunication networks, are helping the ICT sector continue to 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 increase in bandwidth and drop in charges.

In 2020 and 2021, there will be some obvious trends in Vietnam. First is 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 supporting services for online jobs as a way people adapt to the serious impacts of COVID-19.

Moreover, the tendency of using the internet via mobile phones is increasing strongly and will be more intensified in the future, resulting in the development of new applications.

Evidently, 5G is the game for the country’s three biggest telecoms service operators of Viettel, VNPT, and MobiFone. They are also members of ours and ready for the commercial launch of 5G to serve customer demand. 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, we have several operators such as FPT, CMC, Hanoi Telecom, NetNam, and some foreign firms, but the opportunity for international service operators is not vast.

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.

Additionally, 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.

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 therefore must definitely craft careful preparations and strategies to adapt to possible changes in market demands, technologies, and also competition.

According to the Vietnam Telecommunications report for the first quarter of 2020 by MarketResearch.com, the most comprehensive collection of market intelligence products and services on the web, newly-announced plans to equitise 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 Vietnam Internet Association believed the news will be well-received by foreign financiers keen to invest in a large, but still growing, telecoms market.

The association sees strong growth opportunities in the 4G mobile data segment, which will remain the key revenue driver towards the medium term. 5G services, while set to be commercialised next year, will provide little overall to the consumer market, with the strongest use cases remaining in the Industrial Internet of Things segment.

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Based on MasterCMS Ultimate Edition Ver 2.9 2020