3G services set to replace predecessors in Vietnam

Nguyen Thi Phuong Mai, an insurance executive, was excited and delighted to see her friend as she spoke to him on her 3G cell phone.

“It is really new and I was curious to try it,” said a middle-aged man at a VinaPhone center on Ly Thuong Kiet Street in District 10. A regular subscriber with another telecommunication operator, he had joined the line of VinaPhone customers registering for the 3G services “for fun”.

VinaPhone, a Vietnam Posts and Telecommunication Corporation affiliate, is the country’s first provider to introduce 3G services like video calls, mobile TV and Internet after it received a license from the government in April.

Compared to 2G or 2.5G, called Second Generation services, 3G allows simultaneous use of speech and data services and higher data rates, thus enabling network operators to offer users a wider range of services while achieving greater network capacity through improved spectral efficiency.

Users must have 3G devices to receive better quality services from the operator. VinaPhone estimates about 15 percent of cell phones used in Vietnam can access 3G services.

The state-owned VinaPhone said at the launching ceremony earlier this month that its 3G services would be provided in 13 provinces and cities including Hanoi, Ho Chi Minh City, Hai Phong, Quang Ninh, Nghe An, Thanh Hoa, Can Tho, Binh Duong and Da Nang.

Nguyen Van Yen, head of VinaPhone’s 3G Department, said the operator would expand its network throughout the country by the year-end, expanding on its current base of 21 million customers.

VinaPhone is one of four telecommunication firms selected to provide 3G services by the Ministry of Information and Telecommunications, the others being Viettel Telecom, Vietnam Mobile Telecom Services Company or VMS and an alliance between Electricity of Vietnam Telecom and Hanoi Telecom.

Eight telecommunication companies have so far been licensed to offer mobile services using GSM, a global system for mobile communications and CDMA or Code Division Multiple Access in Vietnam.

Viettel, a military-owned firm, introduced 3G services to its customers early this month in a soft opening in HCMC. The operator provided cell phones to its customers to pilot services including video calls, mobile Internet, music and TV. The country’s biggest mobile phone operator in terms of subscribers said the services would be of high quality when they are officially introduced in December.

Hoang Son, Viettel Telecom’s director, said it would spend VND12 trillion (US$710 million) on 15,000 3G stations throughout the country over the next three years. The firm would complete the first 5,000 stations in December.

All four firms have committed to invest in infrastructure for 3G services. Over the next three years, they will pour a combined VND33,000 billion or $1.83 billion to develop infrastructure, including $1 billion by VinaPhone to have new 3G stations or upgrade 2G stations and VND6,000 billion or $330 million by the EVN Telecom-Hanoi Telecom alliance.

Lam Hoang Vinh, VinaPhone’s managing director, said the operator expected to have three million 3G subscribers next year and occupy 40-50 percent of the country’s 3G market after five years of operation. Vinh said VinaPhone would recover its investment capital after seven years. He added it was negotiating with Beeline, another mobile operator, to explore providing the services to users of both networks.

Both VinaPhone and Viettel have said they will charge for services at cost as they did with 2G and wired communications.

The firms earned revenues from 2G services mainly through calls and messages, with income from content download a miniscule portion. Mobile operators recently joined hands with content download providers to provide services like stock indices and gold and foreign currency prices through the General Package Radio Service or GPRS network.

Reported by Minh Quang