1. TELECOMM
VIETNAM
W e a | s o | o o k a t t h e d e b t t h a t t h e V i e t n a m e s e g o v e r n m e n t i s c a r r y i n g o n a g aopinion s eas o t h e r c o u n t n
i n s t t h that o f
e
are in the
Vietnam borrowed muchas the
has as us in termsof percentage GDp.we of
keepthe nation,s notexceeding
debt 40%GDPat thispoint time in
an emerging market, Vietnam should
enterprises' foreign
rate of GDP' level of contribution FDI of
notingseveralfactorssuch as: growth
reserves, liquiditY assets'
and of
SourcerciA Factbook
&
7 LEGAL
REGULATORYAND CONTEXT
REGULATION VIETNAM
7.T TELECOMMUNICATIONS
IN
7.1.1 BASIS
Thefo||owing|ega|documentsconstituteabasisforte|ecommunicationsregu|ationinVietnam,
.TheordinanceNo.43/2002/PL-UBTVQHl0dated22May2002onPostsandTe|ecommunication
2004detairing imprementation
the of a number
. TheDecree 160/2004/ND-C'
No. dated3 september
ordinance PostsandTelecommunication;
on
of articles telecommunicationthe
on of
activities the postsand
200gon investment in
o The Decree 121l2''g/ND-Cp
No. dated3 December
telecommunicationssector;
o TheTelecommunications No' 41120091QH12;
Law
. Spectrum No' 42l2009/QH12,
TheRadio Law
7.,|.2AH|sToR|cALDEVELoPMENToFREGULAT|oNANDMARKETL|BERAL|ZAT|oN
Abigpictureonahistoricaldeve|opmentofregu|ationandmarketlibera|izationofVietname
industry be provided below'
telecommunications can as
1.5
Page
ffip" NNMT nguyenngocbien@yahoo'com
Advisor,

2. TELECOMMUNICATIONS
VIETNAM MARKET
SERVICES ANDBEYOND
REPORT TO 2O1O
UP
DEVELOPMENT REGULATION
Figure 6: HTSTORICAL OF AND MARKET LIBERALIZATION
PERIOD REMARKS
1992 .
Before and provider 1990'
VNpf wastheregulator onlyservice until
. and Communication the policymakerin 1990and
Ministry Transport
of was
provider.
VNPTwastheonlyservice
r Department of was the policy
(DGPT)
General Postsand Telecommunications
makerandregulator VNPT
and provider 1992.
wastheonlyservice in
. weremainly public
services
Telecommunications for services. density
Telephone
was as small as 0.2%. Analog was replaced by digital technology.
Telecommmunications was Tariffswere strictlyunder
construction liberalized.
control the government.
of
995
1992-1 ffiakerandregu|atorandVNPTwastheon|yservice
belonged VNPT.
provider to
was started to accelerate.Capital was injectedfrom
Network deployment
SomeBCCs
investors.
overseas wereestablished BCCbetween
including VNPT
andComvik. Saigon
Twonewcompanies (SPT)
Postel formed'
andViettelwere
Business and regulator but Tariffswere
were separate therewas still monopoly'
control thegovernment.
under
strictly of
1996-2002 marketwas developed
e telecommunications
reached by 2000.BothGSMandCDMA
Teledensity
rapidly. 5% weredeployed"
held more than 50% in
competitionwas very limited.The government
FBOs.
telecommunication
DGPTdecided lnternational was amongthe most
tariffsof mostservices. call
2001.
expensive in theworld.in
one
2002-2007 ffiunicationsordinancewaSapproVedin2002'Vietnam
entered TradeAgreement the US, cooperated
Bilateral with and
withinASEAN,
with commitment open up the
enteredthe World Trade Organization to
telecommunications in phases.
market
o Therewere10 FBOsandabout SBOslicensed'
60
. leased-line, Internet
Competition fiereced mobile,
was in and Fixed-line
sectors.
business suffering.
was
2007-now
. the marketpower(SMP)
The statehas only controlled retailtariffsof significant
Otheroperators set theirowntariffs.
operators. can MIChas annually the
issued
listof services operators
and SMPregime.
under
Mtc
16
Page
NNMTAdvisor,nguyenngocbien@yahoo'com
BienNguyen,

3. TELECOMMUNICATIONS
VIETNAM MARKET
SERVICES ANDBEYOND
REPORT TO 2O1O
UP
AGENCIES
7.1.3 KEYGOVERNMENT
industry regulated severalkey government
issuein the telecommunications
A specific is by entities
whereasMIC is the mainagency charge. will describe rolesof relevant
in We the agencies briefas
in
below.
. TheMinistry Information Communications
of and (MlC)
Unlikeothercountrieswherethere is an independentregulator, Ministry lnformation
the of and
Communicationsin Vietnamalsofunctions a regulator addition itstraditional of being
as in to role part
regime'
of theadministrative in thecurrent
arm
r TheMinistry Finance
of (MOF)
The Ministry Finance
of supports Ministry Information Communications participating
the of and by in
issues
financial
relevant suchas universal fundsor fees against
services rightsunder
commercial
Further, Ministry Finance giveadvice challenging
licenses. the of will on of
issuesuchas valuation
assets
intangible spectrum, numbering whenneeded.
suchas licenses, and plan,
o (MOP) theMinistry Defence
TheMinistry Police
of and of (MOD)
The Ministry Policeand the Ministry Defencesupports
of of and
the Ministryof Information
Communicationsthe areaof protecting public
in the telecommunications
and national networkand
national Thesetwo Ministries responsible establishing privatenetworks the
security. are for the for
useof the police MOPand MODare alsoparticipating the industry another
and armyforces. in in
support
way:Theystrongly to in investors.
theirenterprises participate the industry aggressive
as
. of and (MPl)
TheMinistry Planning Investment
TheMinistry Planning Investment
of and the of and in
supports Ministry Information Communications
theareaof licensing and investments.
overseas domestic
r TheMinistry Trade
of (MTl)
and lndustries
TheMinistry Tradeand Industries
of the of in the
supports Ministry Information Communications
and
pricing,
areaof regulating and practices.
promotions, anti-competitive
. TheMinistry Science Technology
of and (MST)
TheMinistry Science Technology
of and withtheMinistry Information Communications
works of and
standards equipments,
in setting national
up for protection.
services, environment
and
. Sports, Tourism
TheMinistry Culture,
of and (MCST)
NNMTAdvisor,@
BienNguyen, Paget7

4. MARKETREPORT TO 2O1O
SERVICES
VIETNAMTELECOMMUNICATIONS UP AND BEYOND
million
numbers has ones.Belowis the listof prefixes
whileeachotherprovince a capacity 7 million
of
usedfor eachoperator.
PREFIXES
re 7i FIXED-LINES ASSIGNEDTO OPERATORS
Operator prefixes
Fixed-line
EVNTelecom 2
VNPT 3
VTC 4
Postel
Saigon 5
Viettel 6
FPT 7
VNPT I
To be reserved 9
MIC
Source:
According the current
to numbering
national Vietnam a capacity 800 million
plan, has of mobile numbers
amongwhich weregiven operators. however
200 million to We estimate the usage
that ratiois justabout
20%-25% of the givennumbers to a massnumber virtual
out due of caused aggressive
subscribers by
promotions loosencontrolled
and MIC has been tryingthe best to promoteMobile
prepaidservices.
Number (MNP)approach the market.
Portability to wereencouraged frequently
Also,operators to filter
Belowis the listof prefixes
subscribers theirnetwork.
unactive in usedfor eachmobileoperator.
ASSIGNED
8 : PREFIXES FOR MOBILEOPERATORS
Operator Mobileprefixes
VinaPhone 0123,0125, , 0129
091 094,0121,
, 0127
MobiFone 0124,
0122,
090,093,0120, 0126,1028
Viettel 0 9 7 , 9 8 , 1 6 80 1 6 90 1 6 6
0 0 , ,
Postel(S-Fone)
Saigon 095
EVNTelecom 096
VinaMobile 092,
0188
GTel(Beeline) 0199
MIC
Source:
TELEGOMMUNICATIONS
7.1.7 UNIVERSAL FUND
SERVICES
Bien Nguyen,NNMT Advisor, nguyenngocbien@yahoo.com Page21,

5. SERVICES
TELECOMMUNICATIONS
VIETNAM UP ANDBEYOND
REPORT TO 2O1O
MARKET
The regulator launched universal
has an services
telecommunications fund ('theFund')in orderto 1)
distinguish gapbetween
the profits providing
making and services remote
universal to areas and2) close
regions the country.
devideamongdifferent
the digital in undera very simple
The Fund is operated
approach. Operators contribute certain
will a percentage,depends the natureof services, their
on of
annual revenues the Fund's
to budget andthis budget be re-allocated thosewho planto provide
will for
in areawhere
pre-approval andremote
services a planned rural making notyet possible.
profit is
LICENSINGFRAMEWORK
7.Z TELECOMMUNICATIONS
Likemany countries,
other is a areain Vietnam.
business
telecommunicationsconditional
7.2.1 TELECOMMUNICATIONSLICENSES
There are two categories telecommunication
of licenses Vietnam.First,the licenses doing
in for
telecommunicationsbusinesseswhich includea) infrastructure-based licenses
telecommunications
granted thoseenterprises
to whichprovidetelecommunications utilizing telecommunications
services the
networks b) services-based
infrastructure and licenses
telecommunications granted enterprises
to which
provide services
telecommunications the network.
infrastructure
without needof utilizing Infrastructure-
basedlicenses havetermsnot exceeding yearswhileservices-based
normally 15 havethose
licenses
notexceeding years.
10 The secondlicensecategory for performing
is telecommunications suchas
work
subsea
a) licenses setting
for cableswithtermsnotexceeding years,b) licenses private
25 for network
withtermsnotexceeding years,
10 andc) licenses establish networks provide services
for pilot and trial
withtheterms exceeding year.
not 1
7.2.2 BASIC FOR LICENSING
PRINCIPLES TELECOMMUNICATIONS
The following are an telecommunications
principles used when considering application a specific
for
license.
o Thelicense appropriate matches thenation's
is and with strategy master
development and plan.
. Thelicense having priority consideration project feasible fastto deploy,
is a in if the is and to
commits
benefits end users,or reaches remote
long-term of the socio-
areaswherehavingdisadvantage
conditions.
economic
. for if to resources, onlyconsidered
The application a license, relevant the telecommunications' is if
theallocation suchresources feasible in place
of is and usageplanin addition
withthe approved to
theeffectivenessusing
of resources.
telecommunications
Bien Nguyen,NNMT Advisor, nguyenngocbien@yahoo.com Page22

6. VIETNAM
TELECOMMUNICATIONS
SERVICES
MARKET
REPORT TO 2O1O
UP ANDBEYOND
B INVESTMENT
FRAMEWORK VIETNAMTELECOMMUNICATIONS
IN
8.1 LEGALBASIS
The followings
laws and regulations
documents
are the basis for any investment
activityin the
Vietnamese industry.
ICT
o TheLawon lnvestment 59/2005/QH in 2005;
No. 11
. TheDecree 108/2006/ND-CP
No. dated22 2006providing
September guidelines implementation
for
of a number articles Lawon lnvestment;
of of
. TheOrdinance 4312002/PL-UBTVQH10 22 May2002on Posts
No. dated andTelecommunications;
o TheDecree 160/2004/ND-CP 3 September
No. dated 2004detailing implementationa number
the of
of articles telecommunication Ordinance Posts Telecommunication;
on of the on and
o The Decree 121l2008/ND-CP 3 December
No. dated 2008on investment
activities the posts
in and
telecommunications
sector;
. TheTelecommunications No.41120091QH12;
Law
r TheRadio
Spectrum No.42120091QH12;
Law
e International
Treaties telecommunications thatVietnam a party.
on sector is
. Vietnam's
WTOaccession
commitments.
8.2 FORMS FOREIGN
OF INVESTMENT
Under
Vietnam's
Investment oneor moreof thefollowing
Law, vehicles available a foreign
are to investor:
o A jointventure ("JVC");
company
. A wholly
foreign-owned ("WFOE");
enterprise
. A business
co-operation ("BCC");
contract
. A BOT(build,
operate transfer);
and
o A branch
office(Banks, Offices trading
Law and companies
only)
Thereare significant
differences
amongformsof foreign
investment
vehicles
allowed
under Lawon
the
Investment follows.
as
re 9: MAJORDIFFERE
NCESBETWEENFORMSOF FOREIGNINVESTMENT
VEHICLES
(JV)
Venture
Joint 100%foreign- BCC Branch
owned
enterprises
Usein BOTcontract Yes Yes No No
Bien Nguyen,NNMT Advisor, nguyenngocbien@]rahoo.com Page25

7. TELECOMMUNICATIONS
VIETNAM MARKET
SERVICES ANDBEYOND
REPORT TO 2O1O
UP
9 TELECOMMUNI MARKETIN VIETNAM
ONSSERVICES
CATI
9 . 1 AN OVERVIEW
development Vietnam
Thetelecommunication in strategy renovation phases:
follows leap-frog
a of in (1)
Acceleration modernization
and (2)
(1990-2000), No corporatemonopoly approaching
and competition
(1995-2003), Integration,
(3) and ownershipdiversification
development, (2000-2020),and (4)
Achievementthetelecommunication
of of $rom2002onward).
country
roadmap a developed
The totalrevenue the post and telecommunications in Vietnamfor the first six monthsis
for sector
estimatedatVND87,000 billion. endof May2010,
By there 19 million subscribers.
are new Among such
thereare 18 million
new subscribers, mobile Accumulatively, are about149 million
subscribers. there
among
subscribers which129 million subscribers end of May 2010.VNPTis the incumbent
mobiles by
subscribers of the 149million
onewhocontributed to 75 million
up out VNPThad64 million
subscribers.
users theGroup's
mobile in subscriberbase. a recent
On reportconducted MPl,there
by wereabout 22.8
among
newsubscribers
million which22.1million mobile
are ones.By end of June2010,therewere
among
subscribers
about1b1million whichmobile account 89.8%.
subscribers for Teledensity about
is
Also, by end of June 2010,therewere about25 millionInternet
174.7over100 residents. usersin
The of subscribers about million VNPThas2.5 million
Internet
Vietnam. number broadband is 3.5 and
ones.
Some basic statisticsare providedin the below figures.2009 was an outstanding year for
telecommunications revenues
when grew more than 60%.We estimate that the telecommunications
revenues 2010 will be reaching
of the level of $9 billionthe first time. We also note that mobile
plays role to revenues: sector
communications a leading in contributing thetotaltelecommunications This
60%of totalindustry
about
contribute revenues thepastcouple years.
in of
SERVICES
Fiqure 10: TELECOMMUNICATIONS REVENUES
(MILLION
REVENUES
TELECOM USD)
10000
8000
6000
4000
2000
0
2006 2007 2008 2009E 2010F
WhiteBookon ICTVietnam
MlG,
Source: 2010,
2009, NNMTADVISOR's and forecasts
estimates
NNMTAdvisor,nguyenngocbien@yah.oo'com
BienNguyen, Page
34

8. VIETNAM SERVICES
TELECOMMUNICATIONS MARKET ANDBEYOND
REPORT TO 2O1O
UP
Gomputer per Percentage of Percentages of
Province government computershaving government offices
officer accessto the lnternet havinq LAN
ln Averaqe 55,87Vo 71,47%
Mrc
10 KEYTELECOM
COMPANIES
1.0.1VNPT
STRENGTHS
. VNPT is the incumbent projectsof the countryand therefore
and is assignedkey infrastructure
receives support
most favorable from the government terms of licensing,
in telecommunications
resources, rights, financial
commercial and assistance.
r can maintain excellent
VNPT has gainedyears of experience. a result,the incumbent
As an
workforce hasdeeppockets.
and
o whichhelpsprovide
infrastructure
VNPThas maintained solidtelecommunications
a mostavailable
ICTproducts services.
and
. VNPThasa strong
brandandlargest
customer
base.
. VNPT policies
most, notall,national
caninfluence if toward industry.
the
WEAKNESSES
o The incumbentcarriesa huge,but not effective,
organization
structure networks.
and infrastructure
Productivityquitequestionable. ability quickly
is The to adaptto the changing businessenvironment
is still thedark.
in
r VNPThasto provide areaswhereprofits not realized.
services remote
universal to are
OVERVIEW
COMPANY
On January 2006,the PrimeMinister
9, 06/2006iQD-TTg the establishment the
signedDecision on of
parent -
companyVNPTGroup, the basis restructuring Vietnam
on of the PostsandTelecommunications
and turning it into a strong economicgroup of Vietnam with improvedpower &
Corporation
competitiveness process regional international
in the of & integration.
VNPTGroup nowhavea new.mission stature,
will & in of whichposts, and
involved multi-businesses lT
Telecommunications majorfields.VNPT will mobilize economic
are all sectorto joint its process
of
structure flexible
ownership
development a diversified
with and businessscheme orderto renovate
in &
develop reach targets:
to the modernizing posts,
the telecoms lT infrastructure highspeed,
& with high
and popularizing kindsof services meetsocial
capacity highquality; all to driving national
demands; the
integration,
courseof industrialization modernization the new era of development,
and in knowledge
Bien Nguyen,NNMT Advisor, nguyenngocbien@yahoo.com Page61