VietNamNet Bridge – The Vietnam’s mobile market has been existing and developing for 20 years. But the market boom occurred 10 years ago and it took Vietnam 10 years only to list itself among the countries with the high percentage mobile phone users.

10 years to warm up the market

In April 1993, MobiFone, the first mobile network in Vietnam officially began operation.

However, at that time, mobile phone was still an unfamiliar concept to Vietnamese. Mobile phones were “as expensive as gold”, a product was valued at some $1,000. Meanwhile, users had to pay $200 for the network connection fee and the subscription fee of $30. They had to pay $0.3 for every minute of conservation.

By early 1994, MobiFone had had 3,200 subscribers. It got 15,000 more subscribers in 1995 and got 30,000 subscribers by 1995.

Cheap equipment and Viettel help foster the market

In 2003, S-Fone, a new network was set up, which was hoped to help create a competitive market and eliminate MobiFone’s monopoly. However, the appearance of S-Fone did not bring any changes to the market.

A revolution in the mobile market only broke out when Viettel, a military telecom group, joined the market in 2004. By that time, VinaPhone and MobiFone, the two biggest mobile networks, had had 2 million subscribers.

When Viettel started up with the modest capital of VND2.3 billion and 100 workers, no one believed that it would be the company which can make a breakthrough in the market.

In order to have low cost equipment, Viettel conducted negotiations with the world’s device suppliers. Viettel, which was then a small company, signed a contract on buying devices and equipment under the mode of deferred payment for four years with Chinese Huawei.

Prior to that, Vietnam mostly bought telecom products from Europe and the US such as Ericsson, Siemens, Alcatel, or Motorola.

The use of Huawei equipment was considered the premise for Viettel to follow its strategy of becoming a service provider which can provide services at low fees.

Analysts commented that the decision to shake hands with Huawei and ZTE, the low-cost equipment manufacturers, has caused headaches to the US and European telecom manufacturers. They then had to offer unprecedented price discounts to Vietnamese partners.

Until that time, telecom equipment had been considered as “luxurious” and “mysterious” products. Meanwhile, Viettel then stirred the public when giving a new concept “BTS (base transceiver stations) are just bunches of vegetables.” The low cost telecom equipment revolution then also helped other mobile network operators expand their networks at lower costs and offer better service fees to clients.

Subscribers boom, service fee getting cheaper

A report showed that the mobile service fee has decreased by three times over the last 10 years. The stiff competition in the telecom market has turned Vietnam, a country with the highest telecom service fee, into a country with the lowest fee.

The joining of Viettel to the mobile market has led to the market boom. On the first days when Viettel jumped into the market, the number of new subscribers within one day was equal to the number of new subscribers in the whole month before.

According to the Ministry of Information and Communication, by June 2013, Vietnam had had 148.5 million of telephone subscribers, 93.3 percent of which are mobile subscribers.

Buu Dien