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But with a population of 85 million, there is still plenty of room for growth. The fixed-line market, too, is growing at a rate of 15 percent annually. Second only to China in its GDP growth rate, Vietnam's economy has grown steadily by 5 to 8 percent annually over the past ten years. In addition to oil and gas, it is also the world's biggest exporter of rice and the second largest producer of coffee. Textiles and shoes are other major industries, along with household goods and furniture.

 

While private enterprise is flourishing in these industries, with 40,000 new companies starting up each year, all infrastructure in Vietnam, including telecommunications infrastructure, remains state-owned.

 

Gunnar Wenneberg, country manager for Ericsson in Vietnam, says: "The focus is currently on expanding the country's infrastructure, although deregulation of the market is on the horizon in the next five years, subsequent to an application to join the World Trade Organization."

 

However, all the operators in Vietnam today are state-owned. There are currently three GSM operators owned by different government ministries, and three CDMA operators owned by other legal entities of the state. The GSM, as well as CDMA operators, provide coverage throughout the country. Although most revenue is still coming from voice services, it is likely that Vietnam will award 3G licenses as soon as 2006-2007 following a selection process.

 

Ericsson has been established in Vietnam since 1993 but has been selling equipment to Vietnam's various operators for the fixed network since 1988. Ericsson also supplies equipment to all three GSM operators (MobiFone, VinaPhone and Viettel). Recently, the company signed a multi-year frame agreement with Viettel for the expansion of its GSM/GPRS network, which has EDGE capability. Viettel is the fastest-growing mobile operator in Vietnam and aims to provide new, advanced voice and high-speed data services to its growing number of subscribers with the state-of-the-art network technology provided by Ericsson.

 

"In 2004, Ericsson demonstrated 3G video calls between Hanoi and Ho Chi Minh City as EDGE services in MobiFone and VinaPhone networks," Wenneberg says.