This report focuses on the wireless
networking equipment and solutions industry sector in Vietnam.
Although the wireless networking equipment and solutions market in
Vietnam is presently still in its infancy, it will likely grow
rapidly in the next few years as a sub-sector of the Information
and Communications Technology (ICT) industry in Vietnam. U.S.
businesses and exporters of equipment and solutions for wireless
local area networks (WLAN) and wireless Internet applications will
find opportunities for sales and expansion in this market,
particularly for those who come early and establish a proper
presence in the market.
Vietnam has made the development of
the ICT industry a national priority. One of the primary areas
that both local and foreign companies agree is a major hindrance
to the development of the industry is Vietnam's sub-standard
Internet capability. In 2002, Vietnam revamped its strategy to
meet new goals for the development of the ICT sector and for the
development of the country. Many development strategies and
policies for the ICT industry were issued, creating a favorable
environment for the vibrant development of this industry. As a
result of the Vietnamese Government’s priority for development of
the ICT industries in Vietnam, the networking equipment sector and
other ICT related industries in this emerging market have been
growing rapidly following the entrance of newly-licensed
telecommunications companies and Internet service providers,
establishment of software parks, and infrastructure development by
Government agencies and local enterprises. Broadband Internet
services, both wire and wireless protocols, have recently been
offered in Vietnam. This marks a critical turning point in the
development of the local ICT market, especially the wireless
U.S. suppliers present in this market
include Cisco Systems, Intel, Hewlett Packard, IBM, and 3Com,
among others. American companies are clearly the industry leaders
in terms of technology, hardware supply and quality of service,
and American suppliers of networking equipment have established
leading positions in Vietnam’s emerging market. American firms
have emphasized cutting edge technology and training as their main
competitive strengths. According to many industry experts, Cisco
Systems, a U.S. company specializing in networking equipment for
the Internet, is the leading supplier of networking equipment in
Vietnam. Vietnam’s steady infrastructure investment and business
development in this industry will continue to generate significant
export prospects for U.S. companies.
The year 2003 marked a significant
development for the Information and Communications Technology (ICT)
sector in Vietnam. For the first time, Vietnam was ranked
together with 53 other countries in the Information Social Index (ISI).
The ISI is based on 23 factors associated with four groups:
computer infrastructure, Internet infrastructure, information and
social infrastructure. In a global Information Technology (IT)
report, the World Economic Forum ranked Vietnam at 68/102 for its
Networking Ready Index (NRI) in 2003. The NRI is based on the
norms of network use (the rate of Internet and mobile phone users)
as well as capability factors (access capability, policies,
network society and economy). The Internet channel
capacity/Internet user index of Vietnam, according to the
calculation methods of the International Telecommunication Union (ITU)
is 600 Bps (byte/second), which is higher than China and
equivalent to Thailand and the general level of the region.
Vietnam’s Internet development plan
for the period 2001-2005 calls for about 1-1.2 million Internet
subscribers and 3.2-4 million users, 3-5 Internet Exchange Service
Providers (IXPs), 30-40 Internet Service Providers (ISPs), and
many licensed On-line Service Provider (OSPs) by 2005. The plan
also calls for reducing telecom and Internet charges to below or
equal to those in regional countries by 2005, to provide wider
application of Internet-related services in the country, and to
increase total revenue from Internet services to US$2 billion by
2005. A sustainable integration and development strategy has been
initiated as a cornerstone for the development of the ICT industry
in the next 10-15 years. Vietnam has four solutions to achieve
such defined targets. First, Vietnam will perfect the legal
system and enhance the state administration in Internet. This
solution will require effective management of the Internet and
establishment of suitable Internet tariffs. Since 2002, the
Internet access tariff has been adjusted to be comparable to other
countries in the region. Second, Vietnam will develop the
infrastructure by expanding advanced technologies to all
villages. Third, Vietnam will develop Internet application
services including the establishment of a national database and
application of information technology in government management.
Fourth, Vietnam will educate present and future users about the
Under the recently implemented
Vietnam - US Bilateral Trade Agreement (BTA) Vietnam has committed
to liberalizing the telecom service market according to a staged
schedule of implementation. As the BTA is implemented by Vietnam,
new opportunities will open up for U.S. equipment and services
providers. For example, six years after the BTA enters into force
(December 2007) U.S. service providers will be able to form joint
ventures with Vietnamese partners with up to 49% U.S. equity
ownership for voice telephone services. As of December 2003, U.S.
service providers may form joint ventures with up to 50% U.S.
equity ownership for all value added services except Internet
services, which open up in December 2004.
The newly established Ministry of
Post and Telematics (MPT) is currently the sector administrator.
As such, MPT is responsible for developing the national
information infrastructure, including issuing the equipment
standards (called TCVN), popularizing telecom services, and
contributing to national socioeconomic development.
Under the development plan, all
provinces and cities in Vietnam are to be connected to broadband
networks by 2005. Teledensity is expected to increase to 8-10% in
2005 and 15-18% by 2010 from 7% in 2002. By 2010, the national
information highway will be connected to all communes and
districts nationwide by cable and other high bandwidth methods,
with at least 30% of subscribers able to access the Internet.
Also by 2010, telephone and Internet use is targeted to reach the
regional average, with 60% of households owning telephones. While
increasing telecom capacity, Vietnam has reduced international
telecom charges by a yearly average of 10% and international
volume has increased by 18% annually.
To accommodate those projected
developments together with rapid Internet development, the MPT has
translated its commitments into concrete actions. The national
backbone network has been upgraded and is on the way to the
next-generation network. Many legal documents in the industry
have been released to create a better competitive environment in
which those smaller service providers whose market share is less
than 30 percent can set their own service price to the end users.
Goals have been set for the abolition of other corporate
monopolies, enabling rapid transition into a competitive market.
According to this strategy, private and certain foreign invested
enterprises are now able to take part in post and telecom services
supply. The non-state sector is expected to increase its service
market share in post and telecom markets by 25-30% by 2005 and
40-50% by 2010. The government is encouraging all forms of
foreign investment, including 100% foreign-invested firms, to
transfer technology into the country.
Many new value-added services have
been introduced in the market, including broadband Internet access
via Integrated Services Digital Network (ISDN) and Asymmetric
Digital Subscriber Line (ADSL). These kinds of services, serving
as broadband “backhaul” connections, will help to grow the
wireless Internet access. The official launch of the first public
wireless fidelity (Wi-Fi) hotspot on June 12, 2003 in Hanoi marked
the introduction of the usage of Wi-Fi for Internet access in
Vietnam. The launch was the result of Vietnam Data Communications
Corporation (VDC) and Intel’s co-operative agreement to drive the
deployment and application of 802.11-based WLAN in Vietnam. This
will enable notebook users to wirelessly connect to the Internet
and corporate networks at broadband speeds in airports, airport
lounges and other public places across the country. Following
this launch, VDC immediately added more than 40 hotspots to serve
the 22nd South East Asia Games (SEA Games) hosted by the country
in December 2003. By 2005, VDC plans to expand the number of
Wi-Fi hotspots to 1,000 in more public areas of big cities,
industrial zones, and the most populated residential areas in the
The wireless Internet access service
provided by VDC, called Wi-Fi@VNN, is currently available for
pre-paid users only. VDC will expand this service to post-paid
users within 2004 as well as to international roaming registered
users. Besides VDC, there are several other commercial
applications of wireless Internet access provided by a number of
hotels in Hanoi and Ho Chi Minh City.
The wireless networking market in
Vietnam is heating up as the recent introduction of the
next-generation mobile communications networks including the
General Packet Radio Service (GPRS) networks and the debut of the
third-generation (3G) mobile network using Code Division Multiple
Access (CDMA) enable users to wirelessly connect to the Internet
or company emails and data. Both GPRS networks have been upgraded
from Global Systems for Mobile Communications (GSM) networks of
Vietnam Mobile Services Company (VMS), Vietnam Telecom Services
Company (GPC or Vinaphone). The CDMA-based network, S-Fone, is
operated under a business cooperation contract (BCC) between
Saigon Postel (SPT) and a South Korean partner, SLD Telecom.
Despite the rapid development in wireless communications
infrastructure in Vietnam, applications and services for those
networks are very much lacking. There are a number of
applications and services that have been run on a trial basis
including information, entertainment, trade, and banking services
over the mobile networks in Vietnam.
Wireless networking in Vietnam is still in the very early stage of
infrastructure development and has a limited number of providers
and users as well as applications and services. Together with the
rapid development of the networking equipment and services
industry in Vietnam, these will be the main drivers to grow this
market in the future. U.S. equipment suppliers and services
providers will find great opportunities in this particular market
as Vietnam is anxious to catch up to the latest technology and
make use of it to improve economic development.
Vietnam was rated second in the world
in ICT development growth rate by the ITU, trailing only China.
The ICT industry sector is currently among of the fastest growing
industries in Vietnam. The total revenue of the ICT sector
reached US$ 530 million last year, of which computer hardware
(including some wireless networking equipment) accounted for US$
325 million. Many industry experts believe that the growth rate
of wireless networking equipment in Vietnam is also driven by the
growth of general networking equipment. While there are no
specific statistics on wireless networking equipment, which is
still a very small industry in Vietnam, the table below describes
the overall networking equipment market.
Total Market of
Imports from U.S.
Exchange Rate (USD/VND)
above statistics are in US$ millions and are unofficial estimates.
Estimated Future Inflation Rate for 2004: 4% (Source: Vietnam
Like many other emerging markets, the
target markets for WLAN service providers in Vietnam can be
categorized into two major markets: the general consumer market
for homes, and the enterprise market for business and public
access. The market demand for equipment and solutions can also be
divided into two categories: ISPs and enterprises. It is
estimated that several thousands of wireless networking units have
been sold in the country. The equipment for WLAN services
basically consists of access points (AP) and wireless network
interface cards (NIC). APs, connected to the end of the broadband
wired-line LAN, act as a gateway to the wireless terminals, such
as notebooks, Personal Digital Assistants (PDA) or other handheld
devices. Wireless NICs are bundled within a wireless terminal, as
a PCMCIA card type or embedded as a network card, to implement
wireless communication between the AP and the terminal. Based on
the current Wi-Fi 802.11b standard which supports up to 11Mbps on
the 2.4GHz spectrum band, one AP can cover 20m ~ 150m and serve 25
~ 50 terminals simultaneously.
Cisco Systems is the leading provider
of networking equipment in Vietnam. Its wireless networking
equipment brand name, Linksys, is also recognized in Vietnam. It
is estimated that more than 100 units have been sold in Vietnam,
mostly by Cisco's distributors. Other private sector firms in Ho
Chi Minh City have estimated that over 1000 units have been sold.
Other suppliers are from regional countries such as Taiwan and
South Korea. Most of the major brand names in wireless networking
equipment are in Vietnam such as Net Gear, Linkpro, D-Link, Edimax,
Planet, Infosmart, etc.
The market is seeing the appearance
of regional suppliers, such as Asus and MSI, who are beginning to
sell wireless networking technology bundled in notebook and
desktop systems, which will also enable users to access the
Internet or establish networks wirelessly. However, Intel’s
Centrino® technology which is licensed to most of notebook
manufacturers and assemblers in Vietnam is still dominating this
While other country suppliers try to
offer price competitive wireless networking products, U.S.
suppliers’ competitive advantage can be attributed to their
strength in core technology, marketing expertise, brand value,
stability, and backward compatibility with backbone investment in
ISPs. U.S. suppliers will continue to target and expand in this
market with differentiated strategies and services.
The end users for WLAN services can
be ISPs, enterprises and individual consumers. In Vietnam, ISPs
usually purchase directly from the equipment manufacturers’
distributors while enterprises can purchase from system
integrators (SIs) or the manufacturers’ resellers. Consumers
usually buy from ISPs or they can buy the wireless networking
devices bundled in notebook or desktop systems.
Best prospects for U.S. suppliers of
wireless networking equipment and solutions include 2.4GHz/ 5GHz
technology migration to Wi-Fi IEEE802.11a/g WLAN standard. The
number of wireless networking users is increasing as people learn
the benefit of wireless networking access and particularly,
Internet access through Wi-Fi connection in public areas. There
is also an increasing demand, especially from small-and-medium
sized enterprises in Vietnam, for data networks, and WLAN is
considered a competitive, convenient solution to meet those
demands. This will create another sales opportunities for the
WLAN equipment and solutions suppliers who offer WLAN switches
incorporating wireless security, certification, remote network
management, and roaming solutions for a secure wireless
Equipment standards are developed and
regulated by the MPT. Before any equipment can be imported it
must comply with these standards. Compatibility of new equipment
with existing equipment and certification of compliance with
technical standards may also pose a challenge to the foreign
All equipment imported into Vietnam
must go through a trading company that has a telecom equipment
import/export license. Each shipment must also have an import
permit (foreign trade permit) from the Ministry of Trade in order
to clear customs. Business and consumer telecom products are
subject to import duties, which vary according to the product.
For example, wireless networking components such as AP, NIC,
wireless router, etc. are categorized under computer components,
to which a five percent import duty and a five percent value added
tax (VAT) is applied.
The majority of the imported telecom equipment is sold directly to
the local telecom service providers or their subsidiaries. These
State-owned enterprises and local private companies have flat
distribution channels, because these organizations sell directly
to the equipment buyers or consumers. Local distributors must
have an import license for telecom equipment or should have an
existing relationship with licensed trading companies.
Foreign suppliers will need to allocate a sufficient budget to
handle the training of distributors. As some of the wireless
telecom equipment is new to the market, preparation and training
Enforcement of all forms of
intellectual property rights (IPR) in Vietnam is very weak. While
Vietnam has committed to improve its IPR enforcement under the BTA,
it will take years before an effective IPR regime is in place.
The following key addressees that we
encourage interested U.S. companies to contact. However, the
U.S. Commercial Service offices in Hanoi and Ho Chi Minh City are
pleased to work with interested U.S. companies for any possible
Ministry of Post & Telematics (MPT)
18 Nguyen Du Street, Hanoi, Vietnam.
Tel: (844) 822-6622
Fax: (844) 822-6590
Vietnam Post & Telecommunications
18 Nguyen Du Street, Hanoi, Vietnam
Tel: (844) 825-6936
Fax: (844) 825-5851
Vietnam Mobile Telecom Services
811 A Giai Phong Street, Hai Ba Trung
District, Hanoi, Vietnam.
Tel: (844) 864-9533
Fax: (844) 864-8534
Vietnam Telecom Services Company
Road No 1A Nam Thanh Cong, Dong Da District, Hanoi, Vietnam
Tel: (844) 835-7501
Fax: (844) 835-7502
Saigon Post & Telecom Joint-Stock
45 Le Duan Street, District 1, Ho Chi
Minh City, Vietnam.
Tel: (848) 824-1605
Fax: (848) 829-4602
Military Electronics & Telecom
1 Giang Van Minh, Ba Dinh District,
Tel: (844) 846-1453
Fax: (844) 846-0486
811 Giai Phong Street, Hai Ba Trung
District, Hanoi, Vietnam.
Tel: (844) 664-3732
Fax: (844) 664-3716
53 Luong Van Can Street, Hoan Kiem
District, Hanoi, Vietnam.
Tel: (844) 934-3611
Fax: (844) 825-6658
Upcoming Trade Shows
CommunicAsia2004 (Endorsed by the
U.S. Commercial Service)
- Venue: Singapore Expo (1 Expo
Drive, Singapore 486150)
- Date: June 15-18, 2004
Vietnam IT Expo and Vietnam IT
- Venue: HIECC (Ho Chi Minh City’s International Exhibition &
- Date: July 8-11, 2004.
Consumer Electronics Expo Vietnam
- Venue: Venue: HIECC (Ho Chi Minh City’s International
Exhibition & Convention Centre)
- Date: September 2-5, 2004.
Vietnam Telecomp 2004
- Venue: Vietnam Exhibition & Fair
- Date: November 9-13, 2004.