VietNamNet Bridge – Analysts believe that 2011 will be a tough year for telecom companies because it is getting more and more difficult to seek clients for broadband ADSL internet services
The “hot development age” is over

Just several years ago, broadband Internet ADSL was the top choice of internet users in big urban areas, cities and in rural areas. The demand for installing ADSL was so high that sometimes enterprises did not have enough DSLAM (Digital Subscriber Line Access Multiplexer) to provide services. Nowadays, ADSL services have been threatened by new rivals such as broadband 3G Internet and optical cable FTTH.

Though new technologies are still far from being considered the main consumption trend in 2011, it is clear that the existence of new technologies is a threat to the enterprises providing broadband internet. The broadband Internet market not only has ADSL, but also other technologies which could be seen as worthy rivals of ADSL.

According to the Ministry of Information and Communication, at the end of 2010 the total number of broadband subscribers had reached 3.68 million, with the density of 4.2 percent. Currently, VNPT (the Vietnam Post and Telecommunication Group) is holding the biggest market share (70 percent and 2.6 million subscribers).

The second and third positions on the market belong to the two big guys, FPT Telecom and Viettel with one million subscribers each.Some other enterprises are also providing services, but their market share remains very modest. The figures are modest if compared with the potentials and the capacity of larger service providers.

New business strategies needed

Some analysts believe that though the number of ADSL subscribers still is not high,there have been signs showing that the service has entered a setback period. Of course, ADSL service will not “die” in the immediate time or in 2011, but there is no doubt that optical cable and wireless broadband Internet services will be the biggest threat to ADSL.

ADSL service providers well understand the threat. Therefore, the three service providers that hold the biggest market shares now, VNPT/VDC, FPT Telecom and Viettel have been quietly applying measures to attract clients. They have been trying to perfect service packages, focusing on improving the quality of service or launching promotional campaigns.

A representative from VNPT/VDC admitted that though the company did not obtain the expected number of new subscribers in 2010, big cities and urban areas are no longer “fertile soil” for the company. VDC’s Director Vu Hoang Lien frankly said that the main objectives of the company are retaining existing clients and reaching out to rural and remote areas.

VDC has been following its business motto that it is necessary to create favorable conditions to help as more people access internet services as possible. Specifically, the company has been paying attention to the development of services in rural areas.

Meanwhile, analysts believe that ADSL, though having to compete with other technologies, still has the advantage of low costs and prices that will be lowered further in the time to come. This proves to be the biggest advantage. Just with tens of thousands dong, ADSL users can surf on Internet. Meanwhile, the users of other services will have to pay hundreds of thousands of dong, or millions of dong a month.

It is clear that local residents in rural areas do not want to spend much money on internet services, therefore, this will be an opportunity for ADSL to expand its market share.


Source: VnMedia