Mobile Communication Report

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VN Mobile Communications Market Report By NADIA PHAM October 2008

Transcript of Mobile Communication Report

Page 1: Mobile Communication Report

VN Mobile Communications Market Report

By NADIA PHAMOctober 2008

Page 2: Mobile Communication Report

Key Points

VN Social DemographicMarket OverviewVN Business Environment Industry

SWOTTotal Market Volume Growth, 1995-

2008VN Mobile Market Share, 2007 Industry Trend /ForecastsVN Mobile Communications

OperatorsCoverage & Products/ServicesOperators SWOT Analysis

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Vietnam Socio Demographic 59 provinces and 5 municipalities

Population (2006) : 84.1 mill.

Population growth (2006) : 1.2%

Total fertility rate (2004) : 2.3

Life expectancy at birth (2004) : 71 years

Adult literacy rate (2004) : 93.9%

Urban population (2006) : 27.1%

Urban pop. in largest 6 cities : 72%

Average household size : 5.4

Non-agro workforce (2004) : 40%

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Market Overview

The mobile communications market was established in 1992 in Hanoi and HCMC with 2 state-

owned national GSM 900 Mhz networks: MobiFone and Vinaphone of VN Posts &

Telecommunications Copration (VNPT)

6 key operators : MobiFone (GSM 900 Mhz, 1995), Vinaphone (GSM 900 Mhz, 1996), Viettel

(GSM 900 Mhz, 2004), S-Fone (CDMA 800, 2003), HT Mobile (CDMA 800, 2006), EVN

Telecom (CDMA 450, 2005)

At the time of writing this report, VN has approximately 50 mils mobile subscribers. Viettel

remains market leader with a 29% market share, ahead of MobiFone and Vinaphone on 28%

and 25%, respectively. Approximately, 90% of all subscribers are prepaid subscribers.

The low ARPU (Average Revenue Per User) rates of around US$6 per month, one of the lowest

rates in Asia, suggests that the market is not mature with regards to value-added services and

that intense competition to low tariff setting

Mobile Technology : GSM (1992, 82% of mobile market by the end of 2007); CDMA (2004); 3G

(testing), WiMAX (testing)

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VN Business Environment Industry SWOT

WEAKNESSESLack of key strategic investors in the sector’s main operatorsAlthough communications are relatively advanced in the larger cities, many rural areas have little or no access to any telecommunications services

VN Mobile Telecommunicati

ons Market

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Total Market Volume Growth, 1995-2008

Year

Subscribers Revenue (US $ mil)

1995

23,500 27

1996

69,000 56

1997

120,000 96

1998

212,000 147

1999

328,700 202

2000

815,000 248

2001

1,297,800 310

2002

1,722,000 420

2003

2,760,000 500

2004

4,634,300 650

2005

7,900,500 1,000*

2006

16,121,100 1,750*

2007

36,263,100 3,200*

2008

60,000,000 * -

19951996

19971998

19992000

20012002

20032004

20052006

2007

Market Trend

SubscribersRevenue (US$ thousands)

Source: BMI Report 2008

Notice: * estimated figures

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VN Mobile Market Share, 2007

Source: MIC Annual report

* Data updated to Jul 2007

Vinaphone

Mobilefone

Viettel

S-Fone

EVN

HT Mobile

Operator Subscribers

Market share

Vinaphone 9,100,000 25.4 %

Mobifone 9,900,000 27.6 %

Viettel 10,400,000 29.1 %

S-Fone 3,400,000 9.5 %

EVN 2,800,000 7.8%

HT Mobile 205,000 0.6%

TOTAL 35,805,000

100%

• Viettel is the market leader although it had been launched afterVinaphone and Mobifone

• Viettel, Mobifone and Vinaphone continute to dominate the mobile sector• HT Mobile, in Apr 2008, started to migrate customers away from its CDMA

networks towards GSM technology• 3G & WiMAX technology are about to launch, which will be a revolution

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Industry Trend/Forecasts

Source: ITU & BMI report

2005 2006 2007 2008e 2009f 2010f 2011f 2012f

No. of Mobile Phone Subscribers ( thousands)

9,300 18,980 35,805 56,630 69,455 85,280 99,105110,93

0

No. of Mobile Phone Subscriber/100 Inhabitants (%)

11.0 22.2 41.4 67.8 78.1 94.6 108.5 119.8

No. of Mobile Phone Subscribers/100 Fixed Line Subscribers (%)

143.5 204.1 313.0 435.9 499.7 580.1 639.4 688.2

No. of 3G Phone Subscribers (thousands)

0 0 100 700 1,360 2,100 3,050 4,021

3G Market as % of Entire Mobile Market (%)

0.0 0.0 0.3 1.2 2.0 2.5 3.1 3.6

Notice: * e = estimated * f = forecast * ITU : International Telecommunications Union * BMI: Business Monitor International Ltd.

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Mobile Communications Operators

VINAPHONEEstablished on June

1997Frequency band: GSM

900 MhzSubscribers: 7,500,000

VIETTELEstablished on October

2004Frequency Band: GSM

900 MhzSubscribers: 14,000,000

HTMOBILEEstablished on Nov 2006Frequency Band : CDMA

850 Mhz Under constructuring,

change to GSM

EVN TelecomEstablished in 2005

Frequency Band: CDMA 450 Mhz

Subscribers: 182,500

SFONEEstablished on July

2003Frequency Band: CDMA 2000-1x,

Suscribers: 2,351,600

MOBIPHONEEstablished on April

1993Frequency Band: GSM

900 MhzSubscribers: 12,000,000 Total

Market Volume:

36,263,100

Source: MIC Annual report 2007* MIC : Ministry of Information and Communications

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Mobile Communications Operators

VINAPHONEState-owned (VNPT)

Managed by GPC ( Vietnam Telecom Services Company)

a subsidiary of VNPTPartners: Motorola & Siemens AG, Alcatel

VIETTELOwned by the

Ministry of DefencePartners: Ericsson

HTMOBILEHutchinson Telecom

(Hongkong-based company) joint with Hanoi Telecom

Partners: NortelHalted investment in

September 2007EVN Telecom

Owned by Vietnam Power Telecom

( EVN’s subsidiary)Partners: Lucent

Technologies

SFONEMajority owned by Saigon PostTel Copr (with VNPT as its 2nd largest shareholder) and SK Telecom from KoreaPartners : LG Electronics Inc,

UTStarcom

MOBIPHONEState-owned (VNPT)

VMS (VN Mobile Telecom Services) and

CIV (Comvik International Vietnam)

Owners and

Partners

Source: MIC Annual report 2007* MIC : Ministry of Information and Communications

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Mobile Communications Operators

MOBILE COMMUNICATIONS SUBSCRIBER GROWTH ( 2003-2007)

Operator

2003 2004 2005 2006 2007

SubscribersGrowth rate

(%)Subscribers

Growth rate

SubscribersGrowth rate

SubscribersGrowth

rateSubscribe

rsGrowth

rate

Vinaphone

1,700,000 - 2,500,000 47% 3,442,800 38% 5,353,700 56% 7,500,000 40%

MobiFone1,035,5000 - 1,849,300 79% 2,677,900 45% 5,540,000 106% 12,000,000 117%

Viettel - - 119,000 - 1,485,500 1148% 4,627,900 211.5% 14,000,000 202.5%

S-Fone30,000 - 166,000 453% 195,000 17.5% 737,000 278% 2,351,600 219%

HT Mobile

- - - - - - - 200,000 -

EVN- - - - - - - 182,500 -

Source: Vietnam Telecommunications Report Q3 2008 , BMI Ltd.* Data of year 2007 updated to the end of 2007

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Coverage & Products/Services

No. of BST GPRS Coverage (cities)

Vinaphone 2500 16/64

Mobifone 2500 40/64

Viettel 7000 64/64

S-Fone 715 64/64

COVERAGE

Notice: * BTS: Base Transceiver Station* GPRS: General Package Radio Service* Products & Services : see more details in attachments

Prepaid Product

Postpaid Product

Value added

services

Vinaphone 1 5 17

Mobifone 1 4 10

Viettel 5 3 18

S-Fone 9 6 11

PRODUCTS & SERVICES

Source: MIC Annual report (Jul 2007)

VN MOBILE AWARDS 2007 Most Favorite Supplier: Mobifone Best Customer Service: Mobifone Best Mobile Communications Brand: Viettel Best Loyalty: Viettel Most Favorite Service Using Mobile Technology: EVN

Telecom

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VNPT (MobiFone & Vinaphone) SWOT Analysis

STRENGTHS• Country’s leading

telecoms operator with presence in fixed-line, mobile and internet sectors

• Dominant player in the fixed-line sector and also serves 53% of mobile subscribers

WEAKNESSES• Services in rural areas

is poor or non-existent• Lack of competition in

fixed-line sector has contributed to limited array of services on offer

• New mobile price structure under pressure from competitors

OPPORTUNITIES• 3G services, once

Vinaphone and MobiFone win licences, will provide substantial source of value-added mobile revenues

• Deployment of broadband and fixed-wireless networks in short and medium term

• Expansion of Gphone fixed wireless service will help presence in rural areas

THREATS• Viettel expected to

extend lead over mobile market

• Low-cost mobile services from competitors could result in migration away from fixed services

• Timescale for restructuring plan currently uncertain and could be delayed

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VIETTEL SWOT Analysis

STRENGTHS• Licence to offer

fixed-wireless, mobile and value-added services

• Low tariff structure

• Nationwide coverage

• Market leader

WEAKNESSES• Network

currently has limited capacity

• No distribution service outside urban areas

• No international partner

OPPORTUNITIES• Mobile market

expected to increase to above 56 mils by the end of 2008

• Nationwide coverage should guarantee substantial market share in medium term

• Won license to test WiMAX mobile broadband service

THREATS• Connection

difficulties could promt potential subscribers to opt for alternative networks

• Influx of new mobile entrants likely to lead to pricing war

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S-FONE SWOT Analysis

STRENGTHS• Backed by leading

Korean players SK Telecom and LG Electronics

• Licence to offer fixed-wireless, mobile and value-added services

• Ended 2007 with 3.4 mils mobile subscribers and 9.5% share of the market

WEAKNESSES• SK/LG not

permitted to own equity in entity

• Coverage currently limited to 13 provinces and cities

• Pricing structure already undercut by Viettel

OPPORTUNITIES• Continued growth of

mobile sector offers opportunity for expansion

• Helped by its nationwide coverage, there is the potential for considerably more mobile growth, especially from next generation services

THREATS• Falling further

behind market leader Viettel and VNPT subsidiaries (Vinaphone & MobiFone)

• Influx of new mobile entrants likely to lead to pricing war

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Thanks!

By NADIA PHAMOctober 2008