Overcrowding confuses mobile market

A growing number of domestic mobile telecom companies had led to increased confusion in the market, reported a recent Ministry of Information and Communications seminar.

There was strong competition among the seven mobile phone providers serving Viet Nam’s 86 million people, the seminar heard.

The situation had resulted in unsustainable development of Viet Nam’s mobile telecommunications market, the function was told.

Deputy Minister of Information and Communications Le Nam Thang said business results had proven that the situation was not sustainable as the average revenue mobile companies earned per user has declined year-on-year.

Contributions by these companies to the State budget had become stagnant, he said.

Director of the Information and Public Relations Centre of the Viet Nam Post and Telecommunication Group Bui Quoc Viet reported that the average revenue mobile telephone companies earned per user in Viet Nam was only US$3 in comparison to the global average of $17 and the $10 average in Asia.

Experts believe mergers and acquisitions between mobile providers will occur in the near future to remedy the situation.

Seminar participants were informed that small mobile service suppliers were facing significant revenue challenge because their prices were already as low as possible, so they could not join in the price wars going on between larger companies.

The small companies still had room to develop in the short term but they would lose room to grow in the next two or three years, said a representative of a market research company.

A participant said the market would determine the number of service providers. It would also decide the overall winners and losers.

Vietnamese mobile telecommunications is currently dominated by the country’s three biggest companies: VinaPhone, MobiFone and Viettel. — VNS

Tags: Vietnam mobile market