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Business

Vietnam mobile carriers aim for nationwide 4G coverage this year

Big three operators brace for hefty investments, new entrants

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Vietnam may already be close to cellular saturation with 140 million subscriptions in a population of 93 million.   © Reuters

HO CHI MINH CITY -- Viettel, the leading telecom in Vietnam, last week announced its plan to provide fourth-generation (4G) high-speed network coverage to 99% of populated areas by the end of April.

The military-run telecom has 63 million subscribers, and said its 4G network will soon extend to remote communes, border areas, and islands.

Its main rivals are also stepping up their 4G profile. VNPT which has over 20 million subscribers using its Vinaphone brand. Dozens of cities and provinces are already receiving its 4G service upgrades that will be extended nationally by the end of the year. MobiFone has 34 million subscribers, and aims to provide 4G in 53 of Vietnam's 63 provinces this year.

Revenue last year for Viettel, VNPT, and MobiFone was $11 billion, $2 billion, and $1.7 billion respectively. Combined, that accounted for over 90% of the market in 2016, which totalled $16.5 billion -- a 7.5% year-on-year increase. Among new entrants, Gmobile has already secured a 4G license and Vietnamobile is waiting for permission.

A looming problem is market saturation. There are 140 million mobile subscriptions already in a population of 93 million. Carriers are looking to next generation networks to sustain growth, but these will require major investment and costly promotions to lure customers.

Nguyen Binh, an IT engineer in Ho Chi Minh City changed his Vinaphone subscription from 3G to 4G the day in [month] free network upgrades were announced. A month later, he encouraged his wife to follow his example and enjoy all the same benefits. The couple were among the many subscribers wooed by special offers, discounts, and extra data.

In exchange for their licenses, carriers are expected to contribute to the government's ambitious plan to digitize the country. Last year, it set a goal of 40% broadband penetration by 2020. This is intended to promote the use of digital content and information and communication technology services, including e-government, e-commerce, and disaster prevention networks.

When the first 3G network first was launched in 2009, it attracted some 8.5 million subscriptions within a year. Carriers expect the number of new 4G subscribers to at least double that record in the same period. Smartphone users have already reached 36 million.

(Nikkei)

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