Viet telcos must find new areas for growth, says minister

HANOI: For many years, the mobile telecommunications market has been at saturation point and the trend of using over-the-top or OTT services has replaced traditional calling and texting services, causing the core revenue stream of networks to decline, with revenue growth and profits of many telecommunications businesses falling sharply.

The Kinh te Viet Nam (VnEconomy – Vietnam Economic Times) Magazine quoted the Information and Communications Minister Nguyen Manh Hung as saying that the growth of network operators had slowed in recent years, coming in lower than the country’s gross domestic product growth.

Viettel’s domestic telecommunications increased by 2% to 5%, Vietnam Posts and Telecommunications Group (VNPT) from 2% to 3%, MobiFone from 4% to 10% each year.

Good growth for a next-generation telecommunications network should be around 10%, and satisfactory growth must be above 5%t, said Hung.

Vietnam’s major mobile telecommunications enterprises have now all announced their business results for last year.

Military-owned telecommunications group Viettel reported consolidated revenue of 172.5 trillion dong by the end of last year, a year-on-year increase of 5.4%.

In addition to its revenue figure, Viettel said that its market share rose by 1.64 % last year and continued to maintain a sustainable leading position with 56.5%.

As for VNPT, the group reported total revenue of 54.86 trillion dong last year, 102.14% over the previous year.

The group’s entire profit reached 4.47 trillion dong, 100.7% over the previous year.

MobiFone reported total revenue for its parent company of MobiFone Corp reached 25.44 trillion dong, profit before tax reached 1.64 trillion dong, and after-tax profit margin on equity reached 7.25%.

Hung said that network operators have not found new areas of growth , while the old areas had run out or even declined.

For example, traditional phone and SMS-messaging services, which once accounted for nearly 100% of network operators’ mobile revenue, will basically decrease to less than 10%.

If new areas of growth are not opened soon, there would be no future, he noted.

Developing digital applications for industries could be a path forward, which would also support the government’s Make-in-Vietnam initiative, said the minister.

Network carriers and digital technology businesses must consider this as a focus for research and development activity. — Viet Nam News/ANN

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