This document summarizes the internet market development and opportunities in Vietnam. It provides an overview of Vietnam's internet usage statistics and regulatory environment. Key points include that about 25% of Vietnam's population now accesses the internet, with high growth among youth users. Infrastructure is also expanding, with new submarine cable connections. The document outlines business drivers in enterprises, technology, and the growing population. It identifies opportunities in services for individuals, households, and enterprises. Finally, it provides tips for foreign businesses to understand the local culture and build relationships when collaborating with Vietnamese telecom companies.

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.

8. REGULATORY REGIME
(Sources: MIC)

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.

19. Thank you!
biennn@spt.vn