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Telecom hotspot in Asia-Pacific
Ericsson and Hanoi Telecom have signed the largest network modernization contract in Vietnam, the second-fastest-growing economy in Asia-Pacific.
October 17, 2008
The USD 450 million contract, which includes full-scope managed services, is the first of its kind in Vietnam. Under the strategic partnership Ericsson will manage, develop and modernize Hanoi Telecom’s nationwide mobile network.
Dr. Pham Ngoc Lang, Chairman of Hanoi Telecom, says: “This agreement will provide us with a competitive advantage by allowing us to focus on our core business and help position us for rapid nationwide expansion.”
Vietnam has seen mobile penetration grow from a mere 4 percent in 2004 to 40 percent in 2008.
During the same period, the country has embarked on a privatization program, attracting sizeable foreign investment commitments, and become a member of the WTO. Both moves have changed the country’s industrial landscape, especially telecoms.
Until recently all operators and other major players in the telecom market were government-owned. This is now slowly changing, with major operators standing by and waiting for the right moment to buy shares.
For example, Russian operator VimpelCom, which has been in Vietnam since 2008, has set up a joint venture with a local partner and is preparing to start commercial operations in early 2009.
Eddie Åhman, president and country manager for Ericsson Vietnam, has been in the country since 2005 and says he has witnessed tremendous change over the last three years.
“When I came here three years ago, development in terms of general growth and more specifically in the telecom sector was quite flat.
“Penetration was low, in both fixed and mobile, but in this short time a lot has changed and growth has really taken off,” he says.
Åhman says: “We were the first foreign vendor to step ashore 15 years ago, which is also when Vietnam announced economic reforms.
“Ericsson sold the first mobile network and system in the country in 1991 and the first GSM in 1993.
“We are the largest supplier in the market here and we are confident of keeping that position,” Åhman says.
Vietnam currently has seven operators. But as the rest of the world is undergoing operator consolidation, Åhman says it’s only a matter of time before the same occurs in Vietnam as well.
“When consolidation occurs here, it will simplify the way operator blocks choose their vendors.”
Although there has been some speculation about awarding 3G licenses this year, Åhman says it is more likely to happen in 2009 with commercial operations launching in 2010.
“Most of the operators are not willing to share networks, which means we can expect to get orders for whole new networks from each of them. With a good position in 3G globally and a good position in Vietnam, we hope to sustain our position as the leading vendor of choice,” Åhman adds.
