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Vietnam’s Emerging Telecom Market Creates New Trade Opportunities

May 8, 2009

Senior International Trade Specialist Cora Dickson joined the U.S. Department of Commerce’s International Trade Administration in 2001. She helped to establish the U.S.-Vietnam Information and Communications Technologies (ICT) Dialogue, an interagency initiative led by ITA.

Last month on my second visit to Vietnam, it was evident that U.S. companies are taking a keen interest in Vietnam’s telecom market. As an analyst I can tell you several objective reasons why Vietnam holds such potential, but seeing it firsthand makes me a believer.

A cellular phone store in Hanoi, Vietnam

A cellular phone store in Hanoi, Vietnam (U.S. Department of Commerce photo)

In the downtown streets of Hanoi and Ho Chi Minh City, cell phones are becoming as ubiquitous as the scooters, bicycles, and rickshaws. You might even see farmers in straw hats carrying their goods the old-fashioned way, balanced on a pole over their shoulders, but they have cell phones too.

Some Vietnamese citizens even have more than one cell phone, confounding those who try to keep accurate statistics on mobile subscribers in Vietnam. Furthermore, a major upgrade is about to happen in Vietnam now that the government has issued several spectrum licenses for “third generation” (3G) digital wireless services. The manufacturers of handsets and other equipment have been salivating for years at the potential 3G opportunities as they watched Vietnam’s market take off.

Of course it’s not all about mobile. Internet Service Providers (ISPs) are another growing business in Vietnam, and many of the ISPs are private enterprises formed within the past ten years. Most of the broadband services are concentrated in the two major urban areas but the government is actively promoting policies for build out to the rural provinces. Meanwhile, reliable telecom infrastructure is absolutely essential to attract more foreign investment and multinational corporations (MNCs) to Vietnam. Some U.S. telecom companies already serve the MNCs globally and they would like to add Vietnam branches to their networks.

While Vietnam’s telecom market is rapidly modernizing, the telecom regulatory framework still reflects the pre-WTO accession mindset. However, new rules are taking shape through draft legislation that will bring Vietnam’s laws in line with its WTO commitments. I’ve been hearing from U.S. companies who have been eagerly awaiting this legislation, which could really make it easier to do business in Vietnam. Thus, I worked with the Commercial Service post in Hanoi and Vietnam’s Ministry of Information and Communications (MIC) to organize a half-day seminar on April 18th focusing on Vietnam’s draft telecom law.

The U.S. companies left the seminar with the impression that MIC had been willing to listen to their input and will continue to engage with the private sector as they refine the text of the bill, which is expected to be adopted by Vietnam’s National Assembly by the end of the year.

I left Hanoi feeling satisfied as a catalyst for a robust exchange of views between the U.S. companies and the Vietnamese government.

6 comments

  1. Thank you for an interesting article.
    I was in Vietnam two years ago. And as you did, I was positively surprised by how technologically advanced they were compared to surrounding countries. Cambodia for instance has a lot of time to catch up before they can present the same kind of internet related market knowledge.

    Way to go Vietnam.

    Best regards:

    Melanie D.


  2. Very interesting. This could potentially be great for US companies to expand to yet another country.


  3. Hi Cora,

    If you put the example of Vietnam in a larger context, I think the whole issue becomes a lot more transparent. South East Asia has long been the center for Global growth, and it is because of emerging markets like Vietnam.

    My company markets mobile VAS solutions to mobile operators, mainly in emerging markets, and it is a well known fact that a 10% increase in mobile saturation increases GDP by 0.6%, thus investment in mobile infrastructure and services will have on impact on the bottom line of both operators and countries. I think this is what was so apparent during your visit.

    Best,
    Lefty


  4. Thailand is getting extremely connected too, and many people who earn pennies US have a mobile phone now. And also “air cards” for laptop computers with a pretty reliable system nationwide to be on the internet wirelessly

    In Vietnam what is the mobile phone provider? Is it state controlled or is a company like Vodafone doing business there?


  5. Thailand is one of the developed country in south east Asia. they will become a powerful country there instead of Indonesia


  6. I was in Vietnam last year and is changing very technologically. Many persons already have mobile phones.
    Thank you for this interesting article.



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