As I rolled out of the airport on my way to downtown Hanoi, the rice
paddies and lush green vegetation were familiar images from the past.
Vietnam is peaceful and thriving these days, but as you get closer to
downtown Hanoi, it is clear there is a new war going on - and the
weapon of choice is mobile phones. Vietnam has a population of nearly
90 million, and while 75% still live in rural areas, the country has
more than 80 million mobile phone subscribers, with many people holding
multiple numbers. Eight service providers are battling for the hearts
and wallets of the people of the Socialist Republic of Vietnam. The
rural areas are largely untapped, which means that many city dwellers
have multiple phones and subscriptions.

A throng of motorcycles and bicycles choke the bustling streets of
Hanoi, and the drivers have one hand on the handlebar, and the other on
a mobile phone pressed to their ears. While these drivers are making
voice calls as they drive, Vietnam, like India and the Philippines is
dominated by non- voice traffic, particularly SMS. This is why the next
battleground in Vietnam revolves around the imminent launch of 3G Value
Added Services, as it will be a natural for consumers to migrate from
text to multimedia services.

Multimedia services such as live TV, portal access, video ringback
tones, video blogging, and video surveillance will be rolled out over
the next 6 months initially in Ho Chi Minh City, Hanoi, and Da Nang,
and then nationwide. Smartphone and netbook vendors as well as VAS
providers are elbowing for position, as Vietnam is one of the top 15
most populous countries in the world. While inflation has recently
become a problem and slowed the high growth rates of the last few
years, the outlook remains strong and growth is still projected at 5%+
this year.

In Vietnam, the government controls the service providers and has granted four 3G licenses: Mobifone (mostly state owned by Vietnam Posts and Telecommunications Corporation),
Viettel (run by the military), Vinaphone (which will be the first to
launch and is also state owned), and a joint venture between Hanoi
Telecom and Electricity Vietnam Telecom. Expect fierce competition
between these four operators as they compete to hold existing
subscribers and capture new ones through the offering of a range of
multimedia services at very competitive prices. Subscriber growth is
booming, but ARPU continues to drop sharply. Vietnam is poised to
become one of the largest mobile markets in Asia, as well as one of the
most innovative.