BMI estimates that, by the end of June 2008, the number of mobile customers in Vietnam had risen to over 51.6mn. Our estimates are based on the latest data to be published by Vietnam’s Ministry of Information and Communications (MIC), which suggested that there were almost 50mn mobile subscribers in Vietnam at the beginning of June. According to MIC figures, Viettel, which is owned by the Vietnamese military, continued to lead the Vietnamese mobile market with a market share of around 38%. Viettel has a clear lead over the next largest mobile operators, MobiFone and VinaPhone, which had market shares of approximately 26% and 24%, respectively.

We have made some further alterations to our forecast for mobile subscriber growth in Vietnam, in order to take account of much stronger growth in the first few months of 2008. We now envisage a growth rate of almost 80% for 2008. By the end of the year, we predict that the subscriber base will have risen to over 64mn, and that the mobile penetration rate will have reached 73%. It should be remembered that the figures for the number of Vietnamese mobile customers are based on the assumption that the market contains a large number of inactive prepaid users.

Competition and growth in Vietnam’s mobile sector has been boosted by the recent wave of tariff cuts, which have been introduced by the various operators. Further cuts may follow in the near future, possibly resulting in a price war. Looking ahead, we now predict that Vietnam will surpass the 100% penetration threshold in 2010, instead of 2011 as previously predicted. By the end of 2012, we envisage almost 136mn customers and a penetration rate of almost 147%. Continued customer growth will be supported by a steadily expanding population, as well as the arrival of increased competition and new investment.

Meanwhile, according to Vietnam’s Internet Network Information Centre (VNNIC), the number of broadband subscribers rose by 37% in the first eight months of 2008. By the end of August, broadband penetration in Vietnam had risen to 2%, up from 1.5% at the end of 2007. Recent months have seen accelerated efforts to increase the level of investment in broadband technologies and to encourage further take-up. In September 2008, incumbent operator VNPT launched a campaign to promote its ‘MegaVNN’ ADSL service to fixed-line users. The promotion, which runs from September 16 to October 30, offered free ADSL modem and registration fees for new MegaVNN users and customers who shifted their indirect internet services to MegaVNN on fixed phone lines. BMI continues to believe that broadband subscriber growth will be strong over the next five years. However, we now predict a lower rate of expansion for 2008, envisaging growth of no more than 100% for the year as a whole. By the end of 2008, we forecast a market of almost 2.57mn broadband subscribers (equivalent to a penetration rate of 2.9%).