Outside investors see 3G potential

21 Sep 2007

At the Vietnam International Communications Conference and Exhibition 2007 being held in Hanoi this week, it has emerged that some big foreign players are interested in investing in the development of 3G networks in Vietnam. Masayuki Hirata, deputy president of Japanese cellco NTT DoCoMo said that Vietnam’s telecoms and information technology sector’s annual growth rate of 30% is a big draw for foreign businesses to enter the market. He was speaking as his company opened an office in Hanoi, its fourth overseas, joining existing facilities in Beijing, Shanghai and Singapore. The office will explore potential business opportunities and raise its profile among government officials and corporate executives in the burgeoning Vietnamese market.

Echoing Hirata’s sentiment was Richard Moat, managing director of France Telecom subsidiary Orange Romania, who said that Vietnam’s telecoms arena has massive potential. An officer of incumbent telco Vietnam Post and Telecomunications (VNPT) said it was planning to upgrade the infrastructure of subsidiary cellcos MobiFone and Vinaphone to 3G, while rivals Viettel, S-Fone and Hanoi Telecom have called on the Ministry of Posts and Telematics (MPT) to license cellcos for UMTS services.

In June 2006 the MPT revealed that it had rejected applications for 3G licences from VNPT and Viettel, saying that it needed more time to finalise the legal framework of the awards. The following month it reiterated that 3G concessions would not be immediately forthcoming because it deemed the matter to be ‘sensitive’, given just three or four licences would be issued. It was later confirmed that four concessions are to be awarded, and a beauty contest would be held to determine which of the six likely competitors will get the permissions. A timetable has yet to be set. Despite the foreign interest, demand for third-generation mobile services is not high in Vietnam but both VNPT and Viettel have said they wish to ‘drive technology forward and satisfy all their customers’. Deployment plans will depend on the MPT defining frequencies and licence terms, which is expected once cellcos submit their proposals for 3G rollouts. At time of writing Vinaphone was testing the technology with Finnish vendor Nokia in Danang, while MobiFone has already completed a two-year trial and is in the final stages of submitting a rollout proposal, with HCM City and Hanoi the first places expecting to get the service during 2008. The Radio Frequency Department, an arm of the MPT, has proposed that each of the four 3G licensees be granted 2×15MHz frequency division duplexing slots in the 1920MHz-1980MHz and 2110MHz-2170MHz bands, and a 5MHz time division duplexing slot in the 1900MHz-1920MHz range. The 2010MHz-2025MHz band is to be reserved for further UMTS applications, and the RFD envisages that each network will be granted a minimum 5MHz block.