VietNamNet Bridge - “Looking back on history, we believe that if we had not opened the market to create a telecommunication and internet competitive market, we would have found it difficult to sign BTA (the Vietnam-US Bilateral Trade Agreement) and WTO (World Trade Organization), i.e hindering the country’s development and integration. If so, we would have been at fault with the people,” said Mai Liem Truc, former Deputy Minister of Post and Telematics.

Mai Liem Truc, former Deputy Minister of Post and Telematics.

As one of the persons who made great contributions to the country’s post & telecommunication development, would you please talk about the achievements gained in the last 30 years of the sector's renovations?

In the first 15 years of the renovation, the General Department of Posts made two important strategic decisions, which created a breakthrough and turning point in the development of telecommunications and internet in Vietnam.

First, in 1987, Vietnam began going straight into the digitalization of the telecommunications networks, applying advanced technologies and providing modern services to satisfy the country’s communication needs in the period of opening and integration into the world. 

This was really a daring decision at that moment, when 95 percent of the world was still using analog telecommunication network. Meanwhile, Vietnam was still poor after the long subsidy phase and bearing the US economic and high-technology telecommunication embargo.

Dang Van Than, General Director of the General Department of Posts, the personwho assumed full responsibility, and his co-workers then made extraordinary efforts and laid down many original policies to deal with problems. 

They decided to consider developing international telecommunication as the breakthrough and enhance international cooperation to create capital & technology. Also, the general department cooperated with the US’s large telecommunication conglomerates, especially AT&T, to lobby the US Congress to lift the telecommunication embargo against Vietnam (the telecommunication embargo was finally lifted in 1992, two years before the lifting of economic embargo).

By 1995, Vietnam had fulfilled digitalization and automation in all provinces and cities in the country, connecting with the US and tens of countries in the world, providing all types of telecommunication services such as telephone, facsimile, data transmission and mobile information, and satisfying the country’s communication needs.

By 1995, Vietnam had fulfilled digitalization and automation in all provinces and cities in the country, connecting with the US and tens of countries in the world, providing all types of telecommunication services such as telephone, facsimile, data transmission and mobile information, and satisfying the country’s communication needs.

Also in the year, the post sector became the first economic and technical sector in Vietnam to receive the Golden Star Medal and got recognition from the Communist Party, the State and people as leading in the Doi Moi (renovation) process.

The second strategic decision was eliminating the monopoly, creating competition in the telecommunication and internet market. 

When we prepared to bring internet to Vietnam in 1997, I once signed the decision to grant four licenses to VNPT, FPT, NetNam and Saigon Net to provide ISP within one day.

In 2000, the General Department of Posts granted a license to Viettel to provide services through VOIP (voice over internet protocol). Later, it granted mobile band to SPT and Viettel to develop mobile information, creating competition in the domestic telecom market.

The competition made the service fees decrease and the service quality increase significantly, thus helping popularize telecommunication and internet services throughout the country, including remote and rural areas, border areas and islands.

The market opening in the monopolies such as telecommunication, electricity, railway and airway wasa difficult task not only in Vietnam, but in other countries such as Singapore and Thailand. Did you bear any pressure and face any difficulties when deciding to open the market soon for competition?

It is true that opening the market in fields with natural monopoly was a very difficult task. In France, Germany, Japan, Malaysia, South Korea, Singapore and Thailand, it took about 10 years to fulfill the plan, from the day the market opening decision was released to the day the market became fully opened.

In Vietnam, in mid-1990s, the post & telecommunication sector was developing well with the digitalization strategy, which was highly appreciated by the Party’s leaders and people, and therefore, there was no pressure on the market opening.

However, there were some complaints about the high service fees, especially from foreign investors. Therefore, the then Prime Minister Vo Van Kiet decided to allow Sigeles, which became Viettel later, and SPT to join the market to provide post & telecommunication services.

Vu Khoan signs the Vietnam-US BTA in July 2000

Both Viettel and SPT then felt embarrassed as they did not know where to begin. The investments in post & telecommunication required huge capital, while Viettel’s revenue was very modest, just several billions of dong from installing Viba antennas, and SP had tens of billions of dong from trading electronics & telecommunication equipment.

The state management agency – the General Department of Posts – also did not know how to open the market, what to open first – local or long-distance telephone, fixed line or mobile network. Some high ranking leaders then expressed their worries that the market opening for competition may lead to management problems and affect national security.

Following success in the internet market opening in 1997, the General Department of Posts was determined to eliminate the monopoly and open the market of telecommunication services. It decided to choose Viettel as the pioneer, allowing Viettel to develop VOIP-based telephone services, because the investments in the field did not require high capital, while it allowed to recover investment capital quickly.  

This was because Viettel has good technical staff. Besides, there was no need to worry about national security as Viettel is a military company.

"A very high-ranking official came to see us and asked about the market opening process. He cut short our presentation and said that if we do this, we will lose the nation’s security and socialism”.

I replied: “In 1945, we had less than 5,000 Party members only and we still could run the revolution successfully, and now we have 2 million members, so we need to have confidence in our people and integration”. 

It is true that international integration gave us one more reason to be determined to remove the monopoly in telecommunication. In 1997, telecommunications was put into discussion within the frame of BTA. At that moment, Vietnam only allowed international business cooperation under the mode of BCC. 

Meanwhile, the US side mentioned the establishment of joint ventures and even 100 percent foreign owned enterprises in the telecommunication sector.

The request from the US side then aroused big worries about the risk to national security and the loss of economic benefits. However, I said That I would take responsibility before the Prime Minister.

From the final round for BTA in Washington DC, the then Minister of Trade Vu Khoan called and informed that two matters were still in controversy – telecommunication and banking. The then Deputy PM Nguyen Manh Cam summoned me and asked for explanation for two hours, then asked me and Governor Le Duc Thuy to report to the Party Politburo for a final decision.

And we finally signed the BTA and joined WTO six years later. Vietnam’s telcos have grown and dominated the domestic market.

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