VietNamNet Bridge – The appearance of the new comers Viettel and FPT on the pay-TV market could be a threat to the big guys SCTV and VCTV.

Pay-TV market to be re-mapped

According to the Competition Administration Department, an arm of the Ministry of Industry and Trade, by the end of 2012, SCTV had led the pay-TV market with 40 percent of the market share. VCTV is the second biggest guy with 30 percent, while HTVC 15 percent.

The two leaders, SCTV and VCTV, which is now VTVCab, reportedly have stable high growth rates of 8-10 percent per annum in the number of subscribers.

By the end of 2012, Vietnam had had 6 million subscribers, bringing the turnover of $2 billion in 2011 and $2.5 billion in 2012.

The market is believed to have great potentials for the investors with the growth rate of 20-25 percent in 2011-2015.

There are some 50 service providers on the market, and the figure may be even higher in the future, the market has been dominated by the central televisions.

Meanwhile, the gap between the market share held by the big central televisions and the one held by smaller ones has been widened in recent years. In 2011, small televisions held 25 percent of the market share, while the figure dropped to 11 percent in 2012.

However, the market share is believed to be re-divided in the future, once the big names in the telecom sector like VNPT, Viettel and FPT join the market.

The telcos’ disadvantage is that they are unfamiliar in the TV market, but they have great advantages, including the good technical foundation, business experiences and powerful financial capability.

Televisions understand well the advantages of the telcos, which might be the reason why they tried every possible way to prevent telcos to enter the pay-TV market. However, they failed to do that, since the Ministry of Information and Communication believes that it’d be better to open the market to bring benefits to users.

Low profits, stiff competition await the new comers

Though the pay-TV market is believed to be worth billions of dollars, the “new solders” would have to struggle hard in the time to come to obtain the “pieces of the cake.”

Vu Van Hien, former General Director of the Vietnam National Television (VTV) which owns VTVCab, said most of the enterprises in the sector cannot make profit, or make little profits.

He affirmed that enterprises have been making profit only for the last two years, while they either took profit or broke even in the past. When he was in the position of VTV General Director, VTVCab did not make profit.

How the new comers would approach the market is the thing the “old soldiers” have been thinking about.

One of the biggest worries is that the new comers, with the powerful financial capability may dump in the market to attract more clients.

It is highly possible that VNPT, Viettel or FPT would launch the service packages at the fees below the production costs. Since the telcos can make money from other services, they would not be hurt by the dumping.

Viettel is believed to be the most redoubtable rival which may change the face of the pay-TV market, the thing it could do with the telecom market.

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