1. Internet market development
and opportunities in Vietnam,
an emerging market
Presented: Bien Nguyen, MBA (Hons.)
Equinix Asia Peering Forum, Bangkok, September 1, 2009

2. INFORMATION REVOLUTION….
THAT CHANGES PEOPLE’S LIVES

3. AGENDA
• Overview
• Regulatory Regime
• Market Dynamics
• Business Drivers / Challenges
• Infrastructure Development
• Future Plan
• Business Opportunities
• Tips for business collaboration with
Vietnamese Telcos/ISP

4. OVERVIEW
• The Internet was introduced to Vietnam in 1997;
• ¼ of population now have access to the
Internet;
• International BW is as much as 65 Gbps;
• Domestic BW is as much as 90 Gbps, among
which 40% through VNIX;
• 110K DotVN domain names were issued;
• 6.7 mlln. IPv4 addresses were allocated;
• BB subs are as much as 2.6 mlln.
(Sources: VNNIC, MIC, Operators)

5. OVERVIEW
(Sources: VNNIC, MIC, Operators)

6. OVERVIEW
• The youth (15-24), 44% of the online population, is driving the Internet
use. 80% of them get connected very often. Females a bit more than men.
55% have a blog. Mostly females. The young adults (25-34) represent 32%
of the online population. More men than women.
• Regular users spend in average 2h45 online every day.
• 91% of users have an ADSL connection. Internet has 66% home
penetration in the 4 key cities.
• Between 2005 and 2009, twice more people own a personal computer
and four times more homes have an Internet access.
• Home use has now overtaken Internet café and office use. 46% home
users get connected many times every day.
• 27% of users buy online. 38% of them are part of the (15-24) segment.
• Main reasons for internet use: getting information’s for 56% users, online
buying for 8% of users.
(Sources: A marketing agency)

7. REGULATORY REGIME
• Key Government Agencies
– Ministry of Information and Communications;
– Ministry of Police;
– Ministry of Planning and Investment;
– Ministry of Culture, Sports, and Tourism.
• Key Policies
– Classify service providers for licensing purposes (ISP, IXP,
ICP, OSP) to ease the administrative procedure;
– Facilitate network optimization (IIX, VNIX) and enhance e-
security;
– Encourage and maintain competition;
– Promote new technologies, services, and local content;
– Support non-infrastructure ISPs.

8. REGULATORY REGIME
(Sources: MIC)

9. MARKET DYNAMICS
• The licenses issued by MIC (up to 2009)
– 11 licenses for telecom infrastructure deployment
have been issued;
– 67 ISP licenses have been granted.
• The player dynamics
– 54 ISP provides no services;
– 56 ISP possesses no infrastructure.
• The market share
– 10 out of 13 ISP haves less than 2% market share.
– CR3,CR4>90%. There is oligopoly stronghold.

10. BUSINESS DRIVERS
• The integration into the world economy
causing increasing demand of one-stop shop
services from enterprise customers who need
ICT, not separate telecom or IT services;
• The leap frog of advanced technologies and
the growth of supplementary industries;
• The growing young population;
• The commitments from the country leaders;

11. BUSINESS DRIVER
ENTERPRISES

12. BUSINESS DRIVER
SUPPLEMENT INDUSTRIES
• IT industry 2008 growth rate of 20% and total
market value of US$ 4.5 blln. ;
– Hardware: 16% growth rate;
– Software: 35% growth rate;
– Content: 50% growth rate;
(Sources: MIC)

13. BUSINESS CHALLENGES
• Slow privatization, ineffective regulation and
incomplete telecom market liberalization;
• Signs of industry consolidation and
restructure;
• Fast pace of changing technologies hurting
return on investment;
• More and more demanding and less loyalty
customers;
• Security threats and violation of IP rights;

14. INFRASTRUCTURE
DEVELOPMENT
• International Connectivity
– Vinasat ;
– Cross border landline cables from Vietnam to
Cambodia and China;
– New submarine cables , namely, AAG, TGN-IA, and
APG.
• Domestic Infrastructure
– North-South backbone network by operators;
– NGN and high-capacity last mile solutions;
– IDCs in key cities;

15. FUTURE PLAN
• Regulator’s Views
– <The Master Plan for Telecom and Internet in
Vietnam to 2020>
(Sources: MIC)

16. FUTURE PLAN
• Services providers’ views
– Transformation from “network operator” to
“service provider”;
– Intelligent network optimization;
– Effective cost management;
– Sustainable brand building;

17. BUSINESS OPPORTUNITIES
• Individuals
– Social networks;
– Customization & personal reflection;
• Households
– Committed high speed broadband, esp. wireless
solutions;
– Information and entertainment services;
• Enterprises
– IDCs;
– Professional BPO services;
• Government Agencies & Communities
– VPNs on health care, school, etc.

18. TIPS FOR DOING BIZ
• Understand the local institutions and adapt to the culture
– Approach and build relationship with the regulators and relevant government agencies;
– Be aware of and respect to national culture and corporate culture;
– Obtain education on investment policies in telecom & Internet;
– Understand the prospect in terms of size, business scope, licenses, financial health, and
customer base ;
• State-owned vs. joint-stock Co.;
• Incumbent vs. new entrants;
• Be prepared if the partners are
– About to ask for acceptance of intangible assets such as licenses and spectrum right of
use;
– Lack of adequate resources such as information capital;
– Lack of competent human resources;
– Unfamiliar in developing sound business plans;
• Should record the progress in written documents
– South vs. North negotiation style
• And avoid
– Relying too much on indirect communications;
– Pushing too hard at the beginning;
– Using many business consultants.

19. Thank you!
biennn@spt.vn