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A glance at Vietnam's telecommunications industry

A glance at Vietnam's telecommunications industry

Saturday 17, 09 2022
Vietnam is one of the fastest growing telecommunications markets in the region and the world in recent years.

Impressive growth

The period prior to the 2010s saw a rapid increase in the number of participants in telecommunications services in Vietnam. At the end of 2005, Vietnam had only 15.8 million telephone subscribers, including 8.7 million mobile phone subscribers, 7.1 million landline phone subscribers and 210,000 internet subscribers. In 2010, the number of telephone subscribers reached 125.9 million telephone subscribers, nearly 8 times higher than in 2005, of which the number of cell phone subscribers was 111.5 million. Although the number of Internet subscribers was not high, it grew very fast during this period. In 2010, although there were only 3.7 million fixed broadband internet subscribers, it was 17 times higher than 2005.

Impressive growth

Along with that, telecommunications revenue also had a very positive growth. Telecommunications revenue in 2010 reached VND 177.8 trillion, maintaining the growth rate of over 40%. During the period 2011-2015, the telecommunications and internet infrastructure was constantly modernized and developed. The number of telephone subscribers continued to increase sharply in the first years of the period but gradually decreased in the following years, of which there was a sharp decrease in the segment of fixed telephone subscribers.

2012 was the year with the highest number of telephone subscribers ever, reaching 141.2 million. In 2015, the figure decreased to 129.4 million. The number of telephone subscribers in this period achieved an average increase of 0.5%/year, of which mobile subscribers increased by 2.1%/year and fixed subscribers decreased by 17.7%/year. In contrast, the number of fixed broadband Internet subscribers still maintained a relatively high growth rate, increasing by nearly 16% per year on average, reaching 7.7 million in 2015.

Revenue from post and telecommunications in the period 2011-2015 continued to maintain a relatively high growth rate, increasing by nearly 60% in 2015 compared to 2010.

The total revenue of telecommunications services in the first 6 months of 2022 reached more than VND 71,000 billion, up 7.8% over the same period in 2021 and 6.8% over the same period in 2020. In the first 6 months of 2022, the National Assembly officially approved the formulation of the Law on Telecommunications (amended) and included it in the 2023 Law and Ordinance Development Program.

Total revenue

Future trends

In recent years, the telecommunications market is facing saturation of traditional telecommunications services. The number of landline phone subscribers tends to decrease sharply. By the end of 2020, there were only 3.2 million subscribers, down 41% compared to the same period in 2015, and 78% compared to the same period in 2010. The operation of the fixed telephone service segment is currently only in moderation, mainly serving agencies, government organizations, and businesses.

It is worth noting that the number of mobile phone subscribers had exploded, replacing nearly 10 million fixed-line subscribers, but it is now also in a state of saturation. As of the end of 2020, there were 123.6 million subscribers, which is close to the figure in 2015. In addition to the decrease in demand, it is also due to the fact that network operators handle garbage sim cards according to the regulations of the Ministry of Information and Communications.

However, the Internet services segment still has a lot of potential for telecommunications businesses to exploit. The number of broadband Internet subscribers continues to maintain a high growth rate for many years. By the end of 2020, there were 16.7 million fixed broadband internet subscribers, 2.2 times higher than in 2015, equal to an average annual increase of 16.9%. Broadband connection speeds have also improved, but are still slower than in many other countries.

Future trends

Facing the reality with nearly 124 million mobile subscribers, larger than the current population of more than 97.6 million, and the fact that the market share is almost fixed, operators can only improve their business results by maximizing the added value on existing subscribers. Along with that, the fierce competition for market share makes telecommunications businesses have to continuously deploy preferential packages, reduce telecommunications charges, and at the same time constantly improve service quality. In addition, revenue from traditional telecommunications services is also greatly influenced by the popularity of OTT applications. It will become more and more difficult to secure a positive profit from the traditional telecommunications market.

Digital transformation is currently a global trend. With the emergence of the 4th industrial revolution and the push of the Covid-19 pandemic, the world is at a breaking point of the digital transformation process, accelerating digital transformation.

Decision No. 749/QD-TTg dated June 3, 2020 of the Prime Minister approving the "National Digital Transformation Program to 2025, with orientation to 2030" has made Vietnam one of the first country in the world to issue a program on National Digital Transformation, which is a favorable condition for businesses to actively exploit the opportunities brought by the technological revolution

Source: GSO, Minister of Information and Communications

Compiled by VietnamCredit


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