Internet giants battle over fibre internet subscribers

According to data released by the Department of Telecommunications under the Ministry of Information and Communication, at the end of June 2016 the country had 8.19 million subscribers, both ADSL and fibre to the home (FTTH), doubling from the 2011 figure of 4.08 million. At the moment, 37 per cent of households have broadband internet. Since 2010, between 80 and 90 per cent of Vietnam’s internet market belongs to VNPT, Viettel, and FPT Telecom.

During this period, the market sees FTTH rising fast in popularity and eventually surpassing ADSL. From April 2013 to April 2016 the number of ADSL subscribers decreased by 1.5 million, while FTTH users rose from 210,000 in April 2013 to 4.5 million in April 2016, a 21-fold increase.

While the number of subscribers keeps increasing, the market share picture in FTTH changes dynamically.

Data from the department showed that as of the end of 2015 Viettel’s market share was 40.8 per cent, a significant fall back compared to 2014’s 58.4 per cent.

The reason is that although Viettel had the highest absolute growth in number of subscribers among the three service providers, Viettel’s subscriber base grew only by 314 per cent in 2015, compared to FPT’s 1,900 per cent and VNPT’s 441 per cent.

The slower growth enabled VNPT to catch up with Viettel in the period. VNPT’s FTTH customer base rose from 58 per cent that of Viettel in 2014 to 82 per cent in 2015.

Meanwhile, FPT’s FTTH market share quadrupled in 2015. The increase is mostly attributed to FPT changing its infrastructure from copper cable to fibre in major cities, forcing subscribers to switch in turn or change providers.

Internet service providers are using numerous tactics to maintain and gain market share. One of the more popular ways is to decrease prices. Industry insiders said that to get a single account running, a provider needs to charge VND320,000 ($14.3) per month to make a profit. But now, besides companies and organisations who pay more, households pay only VND180,000 ($8) per month on average. Some providers charge as low as VND135,000 ($6) a month.

Another way to compete is by increasing speed while keeping the price. VNPT announced raising the speed of FibreVNN by 25 per cent, while maintaining the price. Similarly, smaller provider SCTV, raised the speed in Danang and Dong Nai by up to 75 per cent, while also keeping price the same.