Spoilt when it comes to choice

Small it may be, but Vietnam's Internet market is a competitive space packed with nine operational Internet service providers (ISPs) as of end-2007.

Yong Lih Khoo, senior industry analyst at Frost & Sullivan, said the Vietnamese government began issuing licenses to big local corporations in 2003 to break the monopolistic market held by state carrier Vietnam Posts and Telecommunications Group (VNPT).

The carrier remains the largest ISP in Vietnam, with 55.5 percent market share of narrowband and broadband subscribers in 2007, Yong said in an e-mail interview. FPT Telecom is the second largest with 15.9 percent market share.

In February 2008, VNPT said it would invest US$1 billion to build a fully Internet Protocol-based next-generation network infrastructure, which will include optical fiber access services to support increasing demand for broadband services from the country's banking, financial and aviation sectors.

According to Lam Nguyen, country director of IDC Vietnam, local ISPs are trying to lower access charges while increasing Internet speed and improving quality of service in order to encourage more Internet use.

"In addition, the government has introduced new business laws that concentrate on electronic-business transactions, encourage local digital content development, and promote development of online-related services," Lam said in an e-mail interview.

According to Lam, there are over 20,000 Internet shops throughout Vietnam, helping local Web users to access the Internet via public access points.

Citing figures from the Vietnam Internet Network Information Center (VINIC), the IDC analyst said there were 5.3 million narrowband and broadband Internet subscribers, as at January 2007. This translated to 18.9 million Internet users, compared to 4.1 million Internet subscribers--or 14.9 million users--just a year earlier, he said.

Frost's Yong added that the number of broadband subscribers rose by 148.1 percent in 2007, from 520,000 subscribers in 2006 to 1.29 million in 2007. The broadband household penetration rate stood at 6.6 percent last year.

Lam said broadband access in Vietnam is currently supported predominantly with asymmetric digital subscriber line (ADSL) connections at home, offices and Wi-Fi hotspots.

In fact, said Yong, xDSL provides 97.2 percent of broadband access to subscribers.

Lam added that 65 percent of broadband subscribers in Vietnam were concentrated in the country's "two main economic engines--Ho Chi Minh City and Hanoi", with the remaining users located in various cities across 62 provinces.

According to the IDC analyst, dial-up subscription packages in Vietnam range from US$1.50 to US$10 per month, and are bundled with a number of hours of free usage. Broadband charges include a US$20 to US$30 set up fee, the cost of a modem and a monthly service package of US$20 to US$30.