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The impact of the recent 3G license attribution on Vietnamese mobile market Ngoc-Anh +33 6 78 61 83

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Presentation on theme: "The impact of the recent 3G license attribution on Vietnamese mobile market Ngoc-Anh +33 6 78 61 83"— Presentation transcript:

1 The impact of the recent 3G license attribution on Vietnamese mobile market Ngoc-Anh +33 6 78 61 83 Telecom ParisTech 09 May 2009

2 2  Vietnamese mobile market before 3G license attribution  Winners & engagement  Potential services  Impacts on holders & non-holders of 3G licenses  Wild-card Agenda

3 Seven MNO and one MVNO are currently present in Vietnamese mobile market 3 1993 1996 Jul. 2003 Oct. 2004 June 2006 Jan 2007 Nov. 2007 April 2009 BCC between VNPT and Swedish Comvik BCC between Saigon Postel Group and Korean SK Telecom Mobile branch of VNPT Mobile branch of Viettel Telecom, an economic entity of Ministry of Defense Mobile branch of Electricity of Vietnam BCC between Ministry of Public Security and Russian Vimpelcom MVNO of Vietnam Media Corporation MNO: Mobile Network Operator MVNO: Mobile Virtual Network Operator BCC: Business Corporation Contract VNPT: incumbent Vietnam Post & Telecommunication Corporation BCC between Hanoi Telecom and Hongkongese Hutchison Telecom

4 Local market is relatively concentrated: 3 leading actors have more than 93% market share (in volume) 4 Market share (in volume) in June 2008 (latest availably consistent information) Three clear leaders Viettel: lower segment with aggressive pricing plans Mobifone: higher segment with focus on client relationship management Vinaphone -S-phone missed Vietnamese market dynamics -EVN did not meet expected results -HT Mobile decided to end its CDMA services at early 2008 and changed its trademark to Vietnamobile Total: 48 millions subscribers Penetration rate: 58% (*) Source(s): MIC (*) Multiple SIM ownership means penetration rate is far lower

5 In April 2009, four 3G licenses are attributed to 5 players who have different engagement levels 5 ViettelVinaphoneMobifone EVN Telecom & Vietnamobile Inves tment Network deployment Deployed technology US$ 800MUS$ 600MUS$ 350MUS$ 370M 9 m: 87% population (5000 Nodes B) 1 yr: 9000 Nodes B 3 yr: 100% population Q3’09: 20% population 3 yr: 50% population 6 yr: 75% population 3 m: 2000 Nodes B 1 yr: 100% big suburbs 3 yr: 98% population 9 m: 50% population (2500 Nodes B) 3 yr: 5000 Nodes B HSPAWCDMAHSPAN/C First 3 years Security money US$ 280MUS$ 93M US$ 37M Service launch 9 months after license allocation (i.e. April 2010) Q3 ‘09 3 months after license allocation (i.e. Oct. 2009) Q1 ‘10

6 One of the main drivers of 3G network deployment is to provide multimedia services in order to increase ARPU 6 Profit RevenueCost = - SubscribersARPU x Customer needs for multimedia services Web2.0 trend TV/video Music M-CommerceNomadic usage Web- browsing ARPU: Average Revenue Per User

7 Mobile TV could be a successful service thanks to premium content and suitable data plans 7 Field experience elsewhere (before flat data plans) Nokia-TeliaSonera in Finland : 20’ per day Orange France : 40’ per month, 54% at home SFR (France) : 20’ per day, 50% at home Opportunities Premium content (sports) is the main driver for Mobile TV Alternative TV screen is preferred in certain conditions Obstacles Flat data packages are necessary to develop services Field experience elsewhere Obstacles Local lifestyle is unfavorable for mobile music usage Piracy would be too strong for mobile music to become a real success TV/video Music 3 Music Store 500k tracks £ 0.99 (€1.48) per track Dual download (both on PC hand handset)

8 M-commerce could become the next killer application in local market 8 Field experience elsewhere Opportunities Vietnamese population uses micro-payment every single day Obstacles A strong synchronized deployment between different operators or with financing institutions is essential Field experience elsewhere Strategic partnership on embedded PC-card Opportunities Nomadic corporate usage would increase rapidly with the growing awareness of information security Obstacles 3G PC-card would face a strong competition from wifi networks M-commerce Nomadic usage Felica contract (million)

9 Suitable business models would boost mobile Web and Web2.0 services 9 Opportunities Vietnamese young population is eager to access web everywhere to stay update with information Obstacles Almost all popular website are not designed for mobile access but this is not a serious issue Flat data packages are necessary to develop services Example of services elsewhere Video blog, post with MMS Facebook in Iphone Opportunities Vietnamese young population is addicted to online social networks Obstacles Suitable business partnership agreements are essential to develop the services Web-browsing Web2.0

10 3G holders have the opportunity to define the local market evolution 10 Market readiness in the next 3 years Mobile TV Mobile music M-commerce Market preemption Risk on an early & undefined 3G service market Marketing impact Normandic usage Investment Web-browsing Web 2.0 + + - - Pros & cons for the 3G license holders Market leaders =

11 Non-holders of 3G license would eventually withdraw from market unless they would receive strong support from regulatory bodies 11 Announced movement after 3G license attribution Segmentation of local market to find market niche Development of adapted services Creation of new business models with different partners (ISP, taxi companies, etc.) Increase its market capital M&A with leading actors Unless they will have a strong protection from a more complete regulation GtelS-fone VTC (MVNO) Services not yet available Partnership with Vinaphone to provide 3G services N/CServices not yet available

12 Wild-card 12

13 13 If 3G services will be used at nomadic usage, what would happen? Bandwidth Usage Mobile Fixed Low Bandwidth Dial up GSM / GPRS Broadband UMTS / HSDPA / CDMA ADSL / FTTx Wimax / WBS Wireless ADSL/FTTx Nomadic ?

14 14 Thank you!

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