Trends & Forecasts

Vietnam must liberalise to capitalise on telecom sector’s potential

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Vietnam initially fell well short of the ambitious targets it set for the wider expansion of its telecommunications infrastructure. However, after reviewing its approach and introducing some competition into the market, this ‘socialist oriented market economy’ has built a fresh growth momentum...

Vietnam initially fell well short of the ambitious targets it set for the wider expansion of its telecommunications infrastructure. However, after reviewing its approach and introducing some competition into the market, this ‘socialist oriented market economy’ has built a fresh growth momentum, according to Research & Markets.

The mobile market has been especially dynamic, having reached a penetration of around 170% in early 2011, although a downturn in demand has hit the market.

Internet is now certainly on the move, with broadband internet having taken off at last. The previously heavy reliance on DSL is changing with the wider deployment of wireless broadband services. Although it stalled in early 2011, the broadband market has started to grow and wireless broadband services are increasingly popular.

The significant presence of fixed-line services (teledensity of 19%) throughout the country has been against the global trend for a developing economy. The continuing government involvement in the telecom sector, however, still raises major questions about its commitment to deregulation and liberalisation. The administration seems to be finding it hard to ‘let go’.

It is yet to be seen how this will play out - the seven operators will continue to fuel a highly competitive situation, while the government continues to explore strategies for part privatising the state-owned telcos.



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