On approval of a new bill by the National Assembly, the doors of Vietnam’s telecom sector will get fully open for the foreign players, intensifying the competition.
According to the official website of Vietnam’s communist party, the National Assembly of Vietnam is to take a decision on a bill presented by the government, which, on approval, will completely open up the telecom market of the country in the coming 3-4 years, as reported by Light Reading Asia.
Vietnam, having seven mobile service providers, had a mobile phone subscriber base of more than 76 Million by the end of May 2009. With a subscriber base of 36 Million, Viettel is the market leader, while MobiFone and VinaPhone follow Viettel.
Going by the projections of the officials from the Ministry of Information and Communications, Vietnam’s telecom market will witness a cut throat competition once it gets fully open in 2012 to comply with the WTO commitment.
As revealed by law firm VLAF - Hong Duc, according to its WTO commitment, the Vietnamese government needs to act upon its deregulation plan by 2012, which includes: ensuring speedy as well as fair network interconnection arrangements, limiting the control of government on state-owned operators, enabling infrastructure sharing, and loosening the current legislations that limit the foreign investment to 49%.
Several international telecom giants, including Cisco, AT-T, Motorola, SK Telecom, Vimpelcom, Nokia, Hutchison, and Ericsson, have already marked their presence in the telecom market of Vietnam. Besides this, many other players have lately entered Vietnam in order to buy the part of equalization-seeking MobiFone.
In such a scenario, fierce competition is quite likely in the country’s telecom market once it opens up fully for the foreign players, as homegrown companies are right now providing only basic services and are largely dependent upon foreign equipment and technologies.
Moreover, Vietnam’s telecom market has been doing reasonably well which is attributed to its successful negotiations allowing domestic players to hold atleast 51% share in any telecom joint venture in the country. According to experts, it is helping Vietnam in stepwise implementing its WTO commitments.
According to a Research Analyst at RNCOS, “On comparing with certain other economic sectors, it appears that Vietnam’s telecom sector has performed really well while steadily opening its doors for foreign players. Now, Vietnam not only needs to comply with the WTO commitment, but also requires bringing a telecom law in force that suits international practices.”
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