In July 2006, the Vietnam Data Company (VDC) owned by state incumbent Vietnam Posts and Telecommunications Group (VNPT), was the first service provider to trial WiMax in the country. This high-profile rural WiMax deployment in the small northern city of Lao Cai, near Vietnam's border with China, seeks to bring rural users online.
Lam Nguyen, IDC's Vietnam country director, said four other Vietnamese cities and provinces--Hanoi, Da Nang, Ho Chi Minh City and Bac Ninh--have also been chosen to test the wireless broadband technology.
According to Marc Einstein, senior industry analyst at Frost & Sullivan, the Vietnamese government has so far permitted six "Vietnam is a market which is ideally suited for WiMax because the populous country has over 86 million residents, but only about 1.5 million broadband connections--a penetration rate of under 2 percent," Einstein said in an e-mail interview.
"Because of the very high costs and time involved in deploying copper and fiber optic lines to end-user premises, WiMax could emerge as a more cost-effective broadband solution than wired access, he explained.
Ray Owen, general director of Motorola Vietnam Telecommunications Company, explained that the price of copper--a key material used in network cables, has gone up tremendously in recent years.
"In fact, it is more expensive to use twisted pair copper wires than optical fibers to provide broadband services to homes today," said Owen, who is also Motorola Home and Networks Mobility's head of technology for Southeast Asia.
"Only a small number of homes have wireline connections in Vietnam, and these networks are not as extensive as other modernized regions like Singapore and Hong Kong," he told ZDNet Asia in an e-mail interview. "Therefore, there is huge potential to provide cost-effective and efficient broadband services to consumers by using wireless technologies. This is especially so for a rapidly emerging economy like Vietnam, where the benefits are obvious."
Also, said Owen, a substantial number of twisted pair copper wires are being used to deliver Internet connections in houses, the maintenance cost for which is rising.
"Many wires used for DSL (digital subscriber line) broadband connections are carried overhead in Vietnam, causing overloading problems even with the relatively low broadband penetration rate," he said.
Cost matters
WiMax is suitable for bringing data communication services to Vietnam's rural areas and countryside, where the returns on investments might not justify the deployment of a wired broadband infrastructure.
Lam explained: "As a result, WiMax has much attractiveness to Vietnam, from both the end-user and service providers' perspectives." As carriers can save on heavy capital equipment investment, WiMax can lower price points for customers, he said.
However, Einstein cautioned that WiMax's high CPE (customer premise equipment) prices and QoS (quality of service) issues are still barriers to adoption in Asia.
In addition, Lam said the cost of purchasing terminal and gateway equipment is still higher than the average income of many Vietnamese.
Notwithstanding, said Einstein, it is very much in the interest of regulators and government agencies to promote broadband adoption because a single broadband line can save a company hundreds of dollars in travel and other administrative expenses, especially with the inclusion of VoIP (Voice over Internet Protocol), he said.
"Every 0.8 percent increase in a country's broadband penetration can increase the country's GDP (gross domestic product) by up to 1 percent due to these efficiencies," Einstein said.
WiMax for a new generation
"With increasing needs from business, education and social networking, users are looking for faster Internet connection, as well as mobile and portable usage models," he said. "WiMax can satisfy these demands at a much lower cost than copper wires."
Owen said Motorola is involved in a number of the WiMax trials in Vietnam, including one with the VDC that is expected to go live this year.
On concerns regarding the security of transmission over WiMax networks, Owen said businesses can "overcome this issue by implementing secure virtual private networks (VPN) across the Internet".
"In addition, WiMax allows the separation of public and private networks to ensure a more secure environment," he said.
Lam believes with more than one-third of Vietnam's population, or over 27 million people, currently wireless phone subscribers, Vietnam offers a good base for the early adoption of WiMax services.
Ray Owen, general director, Motorola Vietnam Telecommunications Company
IDC's Lam noted that WiMax can provide wireless data access over long distances in a variety of ways: from point-to-point links, to full mobile cellular-type access. At the same time, it is also easy to set up.
Owen noted that broadband services are also beneficial to Vietnam's society, as a significant segment of its population is under 30 years old.
