Vietnam Mobile Market in a Regional Context V6

8/14/2019 Vietnam Mobile Market in a Regional Context V6

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RJB ConsultantsRJB Consultants

Vietnams Mobile Market in aRegional Context

Roger BarlowRJB Consultants Limited

3rd Mobiles Vietnam Conference10th and 11th May 2006

Ho Chi Minh City

Socialist Republic of Vietnam


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1

11 Growth in Regional Mobile Markets

Growth in Regional Mobile MarketsGrowth in Regional Mobile Markets

2

22 Regional Metrics

Regional MetricsRegional Metrics

3

33 GSM/CDMA

GSM/CDMAGSM/CDMA

4

44 Data Services

Data ServicesData Services

Forecasts

ForecastsForecasts5

55


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What a difference 12 months makes.

Vietnams mobile market has taken off

The market remains the one of the fastestgrowing in Asia

Increased competition and lower pricesare key factors

Vietnams booming economy is helping

fuel this growth Demographic change is also assisting the

process


4/38RJB ConsultantsRJB Consultants

Asia - Numbers of Mobile Subscribers 2005

393.4

7.4

75.9

45.9

94.7

38.3

19.5

34.9

4.3

21.9

30.4

9.5

0.0 50.0 100.0 150.0 200.0 250.0 300.0 350.0 400.0 450.0

CN

HK

IN

ID

JP

KO

MY

PH

SG

TW

TH

VN

Millions

Source: Merrill Lynch, Global Wireless Matrix 4Q 2005; RJB Estimates


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Asia Net Additional Subscribers 4Q 2005

-2000 0 2000 4000 6000 8000 10000 12000 14000 16000

CN

HK

IN

ID

JP

KO

MY

PH

SG

TW

TH

VN

Subscribers (000s)



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Asia - Mobile vs Fixed Penetration 2005

30.1

106.1

6.9

20.4

74.2

79.4

74.7

40.3

97.9

96

47.7

11.4

23.6

53.1

4.1

4.5

46

54.2

17.9

4.2

43.2

59.4

10.5

7.7

0 20 40 60 80 100 120

CN

HK

IN

ID

JP

KO

MY

PH

SG

TW

TH

VN

Percent Penetration

Mobile Fixed



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Asia - Mobile Customer Growth Rates 2004 to 2006

-20 0 20 40 60 80 100 120

CN

HK

IN

ID

JP

KO

MY

PH

SG

TW

TH

VN

Percentage Growth

2006 2005 2004



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Market Shares in the Region

Regional Markets suggest that 2 to 3 operators

tend to dominate in most Regulation plays a part in this

Market size less so (China - 2, India Many)

Consolidation is now taking place in multi-playermarkets (India, Hong Kong)

Vietnam is now a 4 (soon to be 6) player market

Viettel has become a powerful player

EVN Telecom and Hanoi Telecom will enter this year

Will six players (plus Citifone) result in stability?


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OTHERS

Asia Mobile Market Shares 2005

0% 20% 40% 60% 80% 100%

CN

HK

IN

ID

JP

KO

MY

PH

SG

TW

TH

VN



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Vietnam Mobile Market Shares March 2006

Vinaphone

Mobifone

Citiphone

S-Fone

Viettel

Source: Vietnam News; VietnamNet Bridge; RJB Estimates


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111 Growth in Regional Mobile MarketsGrowth in Regional Mobile MarketsGrowth in Regional Mobile Markets

222 Regional MetricsRegional MetricsRegional Metrics

333 GSM/CDMAGSM/CDMAGSM/CDMA

444 Data ServicesData ServicesData Services

ForecastsForecastsForecasts555


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How does Vietnam compare?

Analysts and investors like to review a number of metricsto assess and compare mobile operators

Vietnams metrics are better accessible now ARPU key measure looked at by most:

Vietnam probably in range of US$10/month and

declining Pre-paid ARPUs may be in region of US$8/month

Not far off regional comparison group in US$10 ~

range ARPUs are falling as lower spending users come on

the networks, a trend seen not only in Asia but alsoglobally


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Asia - Average Revenue per User (ARPU) 2005

0 10 20 30 40 50 60

CN

HK

IN

ID

JP

KO

MY

PH

SG

TW

TH

VN

US$ per month



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Other Useful Metrics:

Proportion Prepaid Vietnam estimated at about 85% prepaid, up from 70% in 2004/5

Similar to other ASEAN countries, but as Vietnams penetrationrate increases so will prepaid proportions

Churn Most operators quote churn as a percent of new adds, resulting

in high numbers (50 to 60%) Net estimated at around 10% - but still higher than region Increased competition will drive churn higher

Minutes of Use

No official data are available for Vietnam Estimated 250 to 275 minutes per month on average Judging by usage patterns no reason to suggest that lower than

region


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Asia - Proportion of Subscribers Prepaid 2005

0 20 40 60 80 100 120

CN

HK

IN

ID

JP

KO

MY

PH

SG

TW

TH

VN

Percentage



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Asia - Monthly Churn Rates 2005

0.0 2.0 4.0 6.0 8.0 10.0 12.0

CN

HK

IN

ID

JP

KO

MY

PH

SG

TW

TH

VN

Percent Churn



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Asia - Minutes of Usage 2005

0 50 100 150 200 250 300 350 400 450 500

CN

HK

IN

ID

JP

KO

MY

PH

SG

TW

TH

VN

Minutes per month



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333

GSM/CDMAGSM/CDMAGSM/CDMA




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GSM is still dominant in region

Vietnam, like most of SE Asia, remains GSM2/2.5G focused, although CDMA 2000 systemswill get a boost this year

3G is changing this:

CDMA 1x and 1x EV-DO deployments are increasing Being deployed for both mobile and WLL applications

CMDA at 450 MHz well suited to rural environments

W-CDMA later to market, but clear evolution pathfrom GSM 2G/2.5G to 3G & then HSDPA

Incumbents with existing GSM infrastructure willalmost certainly move to W-CDMA


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Excludes Fixed Wireless Deployments

Asia - Cellular Standards 2005

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

CN

HK

IN

ID

JP

KO

MY

PH

SG

TW

TH

VN

GSM/UMTS CDMA Other



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UMTS/3G Deployment in Asia (WCDMA)

Country Network Date of Launch

Japan NTT DoCoMo 2001

Vodafone KK 2002

Korea SK Telecom 2004

KTF 2004

PCCW/Sunday July 2005 (Data)/March 2006

(Voice)

StarHub April 2005

Malaysia Maxis December 2004

Taiwan FarEasTone July 2005

VIBO Telecom July 2005

Brunei B-Mobile December 2005

Celcom May 2005

Hong Kong 3 January 2004

CSL 1010 December 2004

SmarTone December 2004

Singapore Singtel December 2004

M1 February 2005

Source: GSM Association & UMTS Forum websites; RJB Estimates

CDMA 2000 Deployment in Asia (1)


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Country Network Type Date of Launch

Bangladesh PBTL & RanksTel Mobile/WLL 800 MHz 1X 2Q 2006

WLL in service

AZ Coms Mobile/WLL 800 MHz 1X 4Q 2006

China Unicom Mobile 2100 MHz 1X EV-DO Trials

Mongolia SkyTel Mobile/WLL 800 MHz 1X 3Q 2004 (EV-DO TBA)

WLL 450 MHz

WLL 450 MHz

Mobile 800 MHz

Mobile/WLL 800 MHzMobile/WLL 450, 800& 1900 MHz

Mobile 800 MHz

WLL 450 MHzWLL 800 MHz

Mobile/WLL 800,1900 MHz

Cambodia Cambodia Shinawatra 1X 3Q 2004

China China Telecom 1X 1H 2003 Trials (TibetProvince)

China Unicom 1X March 2003

India Several operators 1X 2002/03Indonesia Several operators 1X 2002/4

1X EV-DO - TBA

Japan KDDI 1X EV-DO 2003

Laos Lao Telecom 1X (EV-DO TBA)Malaysia Telecom Malaysia 1X - TBA

Nepal Nepal Telecom; United Tel 1X 2005

1x EV-DO - TBA

Source: CDMA Development Group website; RJB Estimates



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Country Network Type Date of Launch

Pakistan Several operators Mobile/WLL 450 &1900 MHz

1X in service

1X EV-DO 3Q 2006

Philippines Express Telecom Mobile 800 MHz 1X - TBA

Sri Lanka Several Operators WLL 800 & 1900 MHz 1X in service

1X EV-DO - Trial

SPT Mobile/WLL 800 MHz 1X 2003

1X EV-DO - Trial

Mobile 1700 MHz

LG Telecom Mobile 1700 MHz 1X EV-DO - 2002

Mobile 800 MHz

Mobile 800 MHzMobile 800 MHz

Mobile/WLL 450 MHz

Korea KT Freecell 1X EV-DO 2002

Taiwan AsiaPac Bband Coms 1X EV-DO 2003

Thailand CAT & Hutchison CAT 1X EV-DO 2003Vietnam Hanoi Telecom 1X EV-DO 3Q 2006

EVN Telecom 1X -2005 (WLL)1X EV-DO - 3Q 2006

Source: CDMA Development Group website; RJB Estimates


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Data Service Usage in Asia

In many countries in Asia SMS is used extensively,particularly by the young

WAP not successful, although GPRS usage growing fast HSDPA will boost WCMDA data capability significantly

CDMA 1X EV-DO roll-out resulting in:

Higher data usage rates (Rev A: 3.1 Mbps downlink) Use of CDMA for data access applications

Examples of growth in data usage rates: China: 2002 2% of ARPU; 2005 20% of ARPU

Indonesia: 2002 12% of ARPU; 2005 28% of ARPU

Korea: 2002 8% of ARPU; 2005 18% of ARPU

Malaysia: 2002 6% of ARPU; 2005 18% of ARPU

Statistics Source: Merrill Lynch, Global Wireless Matrix 4Q 2005


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Asia ARPUs - percent Data Services

0 5 10 15 20 25 30 35 40 45 50

CN

HK

IN

ID

JP

KO

MY

PH

SG

TW

TH

VN

Percent



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Asia Data Revenues % of ARPU 2003-2005

0 5 10 15 20 25 30 35 40 45 50

CN

HK

IN

ID

JP

KO

MY

PH

SG

TW

TH

VN

Percent

2003 2004 2005



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Continued Rapid Growth

Vietnam remains the fastest growing key marketin Asia

Demographic trends suggest that the boom willcontinue for at least the next 5 years, andprobably longer

As GDP and income grow Vietnams mobilepenetration has room to grow significantly Thus by 2010 we forecast:

Total market of 46 million mobiles is achievable inVietnam Mobile penetration of over 50% is thus possible


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Drivers of this Growth

Economic growth Competition Lower prices of handsets and service plans Network expansion into rural areas

Convergence between mobile and fixednetworks Demographic trends

Broadband capabilities and data usage One issue registration of pre-paid subs mayresult in one-off decrease in absolute numbers


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Key Demographic Trends

Population is ageing, with increases in key

market segments for mobile services: 25 to 39 age group will increase by 16.2% in

period 2004 to 2014

40 to 50 age group will increase by 39.3% insame period

With rising incomes the value of these twogroups over the next 5 years increases by5.4% and 7.6% respectively


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Other Demographic Factors

Labour force growing by 1.7% per annum

Household incomes increasing by 2.3% p.a. By 2014, 31.6% of the population will live in

urban areas

An additional 1.1 million people of working ageeach year

Number of households is increasing by 2.5% perannum

Some of these trends are Vietnam specific


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Impact on the market

Additional household income, and decrease inaverage size of households will result in

additional discretionary spending Mobile operators will need to develop messages

specific to the key market segments

Customer retention and loyalty schemes startbecoming important Successful branding (and sub-branding) a key to

success Population age profile suggests that youthmarket less important from 2010 onward


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Vietnam Mobile Subscriber Forecasts

0

10000

20000

30000

40000

50000

60000

2004 2005 2006 2007 2008 2009 2010 2011 2012

Year

Subscibers(Millions)

MPT Lower 06 MPT Higher 06 RJB 06 BMI 06

Source: RJB Estimates; BMI; MPT targets


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Vietnam Alternative Density Forecasts

0

10

20

30

40

50

60

70

2004 2005 2006 2007 2008 2009 2010 2011 2012

D

ensity%

MPT Lower 06 MPT Higher 06 RJB 06 BMI 06

Source: RJB Estimates; MPT targets; BMI; Asian Demographics


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Thank you!

Roger Barlow

[email protected]

www.rjb.hk


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Country Abbreviations

VN Vietnam

TW Taiwan

SG Singapore KO Korea

JP Japan

HK Hong Kong

BD Bangladesh

KH Cambodia

CN China IN India

ID Indonesia

LA Lao

MY Malaysia MM Mongolia

MM Myanmar

NP Nepal

PK Pakistan

PH Philippines

TH Thailand

Documents

Vietnam Mobile Market in a Regional Context V6