© 2008 Pyramid Research
telecommunications service revenue increasing at a CAGR of 12.9% during the 2007-2012 forecast period, against
the regional average of 5.0%. As such, Vietnam will become equal in size to its wealthier, but smaller, neighbor
Malaysia, with an expected revenue of US$6.1bn by 2012.
The main growth engine will be the mobile sector, both voice and data, while the fixed sector enjoys growth in
Demand for faster Internet connection will keep the market growing as dial-up subscribers switch to DSL services.
Despite low incomes,
huge youth segment, (65% of its 86m population is under the age of 30) who are
more tech-savvy than their older generation, will increase demand for connectivity.
In the fixed space, challengers Viettel and FPT are causing headaches for incumbent VNPT, which has been losing
significant market share in the broadband space.
Increasing mobile penetration will keep revenues climbing, despite falls in ARPS. We expect mobile voice and
data revenue to increase at a CAGR of 10.3% and 29.8%, respectively. As such, mobile operators will generate
$4.7bn in service revenue in 2012, almost double 2007 levels of $2.5bn.
Viettel, which became the leader in 2006 after just three years of operation, will continue to maintain its lead
over other operators. Despite being a latecomer, Viettel expanded coverage in areas that were underserved by
existing operators, which helped the former gain substantial market share.
The main risks to operators are falling ARPS levels, which will have an impact on margins in the long run. The
upcoming privatization of MobiFone, VinaPhone and Viettel is attracting interest from regional players such as
STT, Telekom Malaysia, NTT and Chunghwa Telecom.