Summary
Market forecasts for mobile and broadband communications presented in this article are remarkably optimistic despite the recent rapid economic growth which Vietnam has achieved.
Analysis
Vietnam's current population is estimated at around 87 million, with an annual growth rate of just under 1%. So a forecast of 120 million mobile subscribers by 2014 is remarkable, as is a forecast of 43 million 3G subscribers at that time given the country's per capita GDP, which is currently estimated at $2,800 at PPP exchange rates, the same as India's. The country's economic growth rate in recent years has been rapid and slightly lower than India's. But as global growth drops (or even becomes a contraction) in 2009 and perhaps beyond, Vietnam's export-oriented economy - exports were about 2/3 of GDP in 2007 - will suffer from lower exports, higher unemployment and corporate bankruptcies, and decreased foreign investment. This combination of economic and demographic evidence and prospects means that operators in Vietnam should be wary of basing their investments on the forecasts presented in this article, given the likely affordability of 3G equipment and services by customers in Vietnam. Perhaps they could learn from the very low cost operating models implemented by Indian mobile operators. At the same time the latter could use evidence of the progress of 3G services that is achieved in Vietnam to help overcome the seemingly interminable delays in attributing spectrum for broadband wireless services in the world's second most populous country, which typically looks to China as a benchmark, and might be shocked to see itself surpassed by Vietnam in the important area of broadband communications.
