090812 B Nguyen
- 1. Internet market development and opportunities in Vietnam, an emerging market Presented: Bien Nguyen, MBA (Hons.) Equinix Asia Peering Forum, Bangkok, September 1, 2009
- 2. INFORMATION REVOLUTION…. THAT CHANGES PEOPLE’S LIVES
- 3. AGENDA • Overview • Regulatory Regime • Market Dynamics • Business Drivers / Challenges • Infrastructure Development • Future Plan • Business Opportunities • Tips for business collaboration with Vietnamese Telcos/ISP
- 4. OVERVIEW • The Internet was introduced to Vietnam in 1997; • ¼ of population now have access to the Internet; • International BW is as much as 65 Gbps; • Domestic BW is as much as 90 Gbps, among which 40% through VNIX; • 110K DotVN domain names were issued; • 6.7 mlln. IPv4 addresses were allocated; • BB subs are as much as 2.6 mlln. (Sources: VNNIC, MIC, Operators)
- 5. OVERVIEW (Sources: VNNIC, MIC, Operators)
- 6. OVERVIEW • The youth (15-24), 44% of the online population, is driving the Internet use. 80% of them get connected very often. Females a bit more than men. 55% have a blog. Mostly females. The young adults (25-34) represent 32% of the online population. More men than women. • Regular users spend in average 2h45 online every day. • 91% of users have an ADSL connection. Internet has 66% home penetration in the 4 key cities. • Between 2005 and 2009, twice more people own a personal computer and four times more homes have an Internet access. • Home use has now overtaken Internet café and office use. 46% home users get connected many times every day. • 27% of users buy online. 38% of them are part of the (15-24) segment. • Main reasons for internet use: getting information’s for 56% users, online buying for 8% of users. (Sources: A marketing agency)
- 7. REGULATORY REGIME • Key Government Agencies – Ministry of Information and Communications; – Ministry of Police; – Ministry of Planning and Investment; – Ministry of Culture, Sports, and Tourism. • Key Policies – Classify service providers for licensing purposes (ISP, IXP, ICP, OSP) to ease the administrative procedure; – Facilitate network optimization (IIX, VNIX) and enhance e- security; – Encourage and maintain competition; – Promote new technologies, services, and local content; – Support non-infrastructure ISPs.
- 9. MARKET DYNAMICS • The licenses issued by MIC (up to 2009) – 11 licenses for telecom infrastructure deployment have been issued; – 67 ISP licenses have been granted. • The player dynamics – 54 ISP provides no services; – 56 ISP possesses no infrastructure. • The market share – 10 out of 13 ISP haves less than 2% market share. – CR3,CR4>90%. There is oligopoly stronghold.
- 10. BUSINESS DRIVERS • The integration into the world economy causing increasing demand of one-stop shop services from enterprise customers who need ICT, not separate telecom or IT services; • The leap frog of advanced technologies and the growth of supplementary industries; • The growing young population; • The commitments from the country leaders;
- 11. BUSINESS DRIVER ENTERPRISES
- 12. BUSINESS DRIVER SUPPLEMENT INDUSTRIES • IT industry 2008 growth rate of 20% and total market value of US$ 4.5 blln. ; – Hardware: 16% growth rate; – Software: 35% growth rate; – Content: 50% growth rate; (Sources: MIC)
- 13. BUSINESS CHALLENGES • Slow privatization, ineffective regulation and incomplete telecom market liberalization; • Signs of industry consolidation and restructure; • Fast pace of changing technologies hurting return on investment; • More and more demanding and less loyalty customers; • Security threats and violation of IP rights;
- 14. INFRASTRUCTURE DEVELOPMENT • International Connectivity – Vinasat ; – Cross border landline cables from Vietnam to Cambodia and China; – New submarine cables , namely, AAG, TGN-IA, and APG. • Domestic Infrastructure – North-South backbone network by operators; – NGN and high-capacity last mile solutions; – IDCs in key cities;
- 15. FUTURE PLAN • Regulator’s Views – <The Master Plan for Telecom and Internet in Vietnam to 2020> (Sources: MIC)
- 16. FUTURE PLAN • Services providers’ views – Transformation from “network operator” to “service provider”; – Intelligent network optimization; – Effective cost management; – Sustainable brand building;
- 17. BUSINESS OPPORTUNITIES • Individuals – Social networks; – Customization & personal reflection; • Households – Committed high speed broadband, esp. wireless solutions; – Information and entertainment services; • Enterprises – IDCs; – Professional BPO services; • Government Agencies & Communities – VPNs on health care, school, etc.
- 18. TIPS FOR DOING BIZ • Understand the local institutions and adapt to the culture – Approach and build relationship with the regulators and relevant government agencies; – Be aware of and respect to national culture and corporate culture; – Obtain education on investment policies in telecom & Internet; – Understand the prospect in terms of size, business scope, licenses, financial health, and customer base ; • State-owned vs. joint-stock Co.; • Incumbent vs. new entrants; • Be prepared if the partners are – About to ask for acceptance of intangible assets such as licenses and spectrum right of use; – Lack of adequate resources such as information capital; – Lack of competent human resources; – Unfamiliar in developing sound business plans; • Should record the progress in written documents – South vs. North negotiation style • And avoid – Relying too much on indirect communications; – Pushing too hard at the beginning; – Using many business consultants.