4G race expected to reposition mobile network operators

February 9, 2017 | 10:20 am GMT+7

Management agencies have been granting 4G licenses sooner than initially expected, which could create stiff competition among telcos in 2017.


Since last October, the Ministry of Information and Communication (MIC) has granted licenses to provide 4G services to the three biggest telcos – Viettel, VNPT and MobiFone.

4G is fourth generation technology for mobile data transmission which allows transmission at the speed of 1-1.5 gigabits per second at maximum, several hundred times higher than the speed of 3G.

MIC initially stated that the first licenses would be granted only in 2017. However, mobile network operators all proposed to grant licenses sooner than planned, because 4G is considered an ‘important battle’ to improve the business performance in the context of the voice and text market saturation.

Nguyen Manh Hung, CEO of Viettel, said that it was very difficult to attract new subscribers. 

A report showed that the total number of mobile subscribers is now half as many against the total population. In 2016, mobile network operators successfully lured many more subscribers when launching a new number repository with ‘lucky’ prefixes 088, 089 and 086. But this is not a long-term business strategy for them to improve business.

In order to increase revenue per subscriber, mobile network operators have no other choice than strengthening added value services.

MIC’s 2016 report showed that the three biggest mobile network operators still obtained growth in the number of new subscribers, but the growth slowed down. Two of the three had increased subscriptions, but the profits were lower compared with 2015.

MobiFone, for example, had 19 million new subscribers, which meant an 11 percent growth rate compared with 2015, while the revenue increased by VND1.5 trillion. But its pre-tax profit decreased by VND2.2 trillion, a sharp fall of 42 percent.

Viettel had 7.4 million new subscribers, while the revenue increased by VND3.8 trillion, but the pre-tax profit decreased by VND2.6 trillion. 

Just one week after receiving the license, VinaPhone in early November 2016 officially provided 4G service on Phu Quoc Island. 

In early 2017, Viettel announced the free change of 4G simcards throughout the country. MobiFone has encouraged clients to change 3G into 4G simcards by offering vouchers with the value of VND500,000.

Viettel’s CEO Nguyen Manh Hung said Viettel will deploy 4G like it did when launching 2G in the past, aiming to popularize mobile broadband to most users.

The manager of the telco which holds the largest market share hopes that Vietnam will be among the 30 countries in the world with the strongest 4G deployment in the next few years.