Turning up the cable TV market

According to the Authority of Broadcasting and Electronic Information, under the Ministry of Information and Communications (MIC), Vietnam is home to 26 cable television service providers, and 19 others are in the pipeline awaiting approval.

Of the latter, some are targeting just one location (a province or municipality with around 55,000 subscribers), several others are aiming at two locations (more than 100,000 subscribers), while most are looking at very small operations, serving less than 10,000 subscribers.

A source from the MIC said two more providers would be licensed in the coming time, state telco VNPT and technology group Vietnam Multimedia Corporation VTC.

In April and August of this year military-run Viettel and FPT Telecom were licensed to provide the service.

These two were the last of Vietnam’s major players to join the cable TV business. They will join their fellow MIC licensees as well as a slew of businesses licensed by VTV.

Deputy head of the MIC’s Radio Frequency Department Le Van Tuan proposed that the number of cable TV service providers should be big enough to stimulate competition, but not so many as to saturate it. Tuan also suggested they share infrastructure to minimise costs.

VTC strategic director Nguyen Lam Thanh said over-lapping investments were the primary reason behind poor revenues as they use separate infrastructure which wastes power, is low efficiency, and costs more to maintain and guarantee.

To promote healthy performance, the MIC has mulled streamlining the market toward higher professionalism.

The MIC said it would grant licenses to cable TV service providers on a selective basis to capable businesses with an expansive network and infrastructure and the ability to balance coverage between rural and urban areas.

One MIC source reveals the market should expect the number of cable TV providers to fall to around 6-7 in the near future among over 40 pay TV service providers currently.

According to the Vietnam Competition Authority under the Ministry of Industry and Trade, the biggest slices of the pay-TV cake are now in the hands of SCTV, VCTV, and Ho Chi Minh City Television Cable TV Centre (HCTV).

By the end of December 2012, SCTV reportedly held 40 per cent market share, VCTV 30 per cent, and HCTV 15 per cent.

VTV has three million subscribers out of the total 4.5 million pay TV subscribers in the country. Of these, VCTV contributed 1.2 million, SCTV 1.5 million, and the K+VTV joint venture with France’s Canal Plus 400,000.

According to this year’s ICT White Book, cable TV giants account for 85 per cent of cable market share nationwide and cable TV revenue still amounted to $194 million this year, nearly equal to total pay TV revenue last year.