Fierce competition expected when Vietnam opens up telecom market
The telecommunications market in Vietnam will be bustling with a fierce competition when Vietnam fully opens it in 2012 under its WTO commitment, experts from the Ministry of Information and Communications have forecast.
Along with implementing the commitment, Vietnam is required to enact a law on telecommunications that fits international practices and integration, said Standing Deputy Minister of Information and Communications Le Nam Thang.
According to a telecommunications bill, all businesses will be allowed to enter the telecoms market. The Government will submit the bill to the National Assembly this week for consideration, he said.
Under its WTO commitments, Vietnam will also allow foreign owned businesses to provide telecom services.
The telecom market in Vietnam has already seen the presence of many leading international telecoms companies, such as AT-T, Cisco, Motorola, Nokia, Ericsson, SK Telecom, Hutchison and Vimpelcom.
In addition, many other players have recently come to Vietnam to buy part of MobiFone, which is preparing for equitization.
With such a situation, fierce competition is inevitable when Vietnam fully opens its telecom market, since domestic companies are merely providing basic services while remaining much dependent on foreign technologies and equipment.
Foreign players are more engaged in services based on added value and transnational services.
Compared to some other economic fields, Vietnam’s telecoms sector has done reasonably well while gradually opening up to foreign companies.
This has come from Vietnam’s success in negotiations that allow the Vietnamese to hold at least a 51 percent of stake of any telecom joint venture. It also helps Vietnam to carry out its commitments to the WTO step-by-step, said experts.
However, the deadline for fully opening the domestic telecom market is fast approaching, and the development potential of Vietnam’s telecom – such as services and building infrastructure – is creating big opportunities for both foreign and local investors, said the ministry.
While remaining weaker in terms of technology, domestic businesses should focus more on diversifying service and improving service quality if they want to succeed, the ministry advised.
The ministry has collected opinions from experts, administrators and CEOs in its preparations for opening up of the telecoms market.
By Tran Luu - Sai Gon Giai Phong - June 1st, 2009