Booming Vietnam telecom industry expected to cool in 2011

The telecom market will cool down in 2011 as the number of subscribers has been saturated.

The warning comes despite U.S. research firm, Pyramid Research, projecting that Vietnam’s telecom industry revenues will reach $5.9 billion this year, doubling the figure of 2007.

The minister elaborated that Vietnamese authorities have tightened control over mobile networks via issuing regulations on promotion mobile numbers, prepaid and inactive subscribers.

Vietnam now has a total of 162.88 million phone subscribers, 91.2 per cent of whom are mobile phone users.

Pyramid said most of the revenues are attributed to the mobile phone field that is expected to continue being a major cash earner of Vietnam’s telecom service industry with the boom in 3G services.

According to the Ministry of Information and Telecommunication, Vietnam Posts & Telecommunications Corporation (VNPT), a leading telecom firm in Vietnam, is estimated to post revenues of VND101.57 trillion ($5.07 billion) and pay taxes of VND7.86 trillion ($392.75 million) this year.

The revenues is 22 per cent higher than a year earlier and will surpass its earlier full-year target the amount of VND100 billion ($5 million).

Military Telecom Corporation (Viettel) will rank the second with revenues estimated at VND91.134 trillion ($4.56 billion) in 2010, a soar of 50 per cent from the figure of 2009.

Meanwhile, Saigon Post and Telecommunications Services Corporation or Saigon Postel (SPT) will have revenues of VND1.165 trillion ($58.25 million) this year.

The figures indicate that IT and telecom firms have made breakthrough growth which nearly tripled against the national GDP of 6.5 per cent expected for 2010.

The ministry also requested telecom firms not to race for subscribers but to improve their service quality.

Economists forecast that with stricter regulations plus the saturation, unprepared companies and unrealistic expectations may fail in the competition next year.