Visitors are experiencing a mobile phone compatible with 3G technology at the 12th Vietnam Telecomp-Electronics 2008 - Photo: Kien Nam Nguyen Lan Thanh, a logistic manager of Bluescope Steel Factory in Ba Ria Vung Tau Province who is very busy with customers’ relations, feels sorry when she has just bought a new mobile phone of the make Nokia Supernova 7610 at VND4.2 million. Though the new phone is of good quality with all functions, she says, the handheld device will not allow for 3G communications when the new technology is introduced.
Thanh’s regret is understandable, as she had acquired the new cell phone just days before four telecom providers obtained the third-generation network (3G) licenses last week. The early winners are the military-run Viettel, MobiFone and VinaPhone under the Vietnam Post and Communication Group and the consortium between EVN Telecom and Hanoi Telecom.
“With the new mobile phone, I still can solve my job quickly with various functions on the device. However, the mobile phone cannot match with the 3G technology which can offer various added values,” Thanh says.
“It means that I should buy a new one which can accommodate 3G technology that will be deployed soon,” she explains, adding that “I’m eagerly looking for the time when 3G technology is available to use new value-added services such as videophone, on-line video streaming and high-speed internet.”
Thanh is not the only person eager with the 3G technology, which now is becoming a very hot topic around the country when mobile users, telecom providers, industry insiders and the Government are waiting for what 3G brings about.
Industry insiders say the most precious advantage of 3G is that it makes the telecom infrastructure more comprehensive via wide broadband, enable the digital content industry to develop, and help narrow the digital gaps between rural and urban areas.
“Thus, 3G means it enhances Vietnam’s competitive index in terms of telecommunications compared to other countries in the region,” says Le Nam Thang, deputy minister of Information and Communication.
Strong commitment
The four mobile carriers that have just obtained the 3G licenses has committed to quickly introduce the technology into the market. They have pledged to invest nearly US$2 billion for 3G technology deployment within the first three years.
Under the ministry’s requirement, the winners will have three months to make deposits and prepare finance to carry out their commitments. After that, the ministry will formally grant licenses for 3G network establishment with a term of 15 years. The total deposits alone by the four telcos is estimated at VND8.1 trillion, or over US$450 million.
The 3G licenses are granted according to the International Mobile Telecommunications-2000 (IMT-2000) standard and 1900-2200 MHZ frequency. It is the global standard for third-generation (3G) wireless communications, defined by a set of interdependent International Telecom Union’s recommendations.
IMT-2000 provides a framework for worldwide wireless access by linking the diverse systems of terrestrial and/or satellite-based networks. It will exploit the potential synergy between digital mobile telecommunications technologies and systems for fixed and mobile wireless access systems.
Hoang Son, director of Viettel Telecom, confidently says Viettel will officially launch 3G services within the next nine months which can cover 86.5% of the country’s total population with 5.000 base transceiver stations (BTS).
“We commit to invest US$800 million in the first three years. In our long-term plan, Viettel will spend US$1.5-1.8 billion within 15 years. In addition, 16,000 current BTS will be upgraded for the 3G technology,” Son says.
According to Son, Viettel applies High Speed Packer Access which allows the Internet speed rate at 2Mbps.Meanwhile, other competitors like MobiFone also commits to supply 3G coverage at 100% of the population in 63 cities and provinces nationwide in the first three months upon the receipt of the 3G license last week.
A representative of MobiFone explains that MobiFone will upgrade its current 2G infrastructure for accommodating the 3G technology. It will help clients to approach 3G service in a short term and save expenditure, he says.
Similarly, the consortium between EVN Telecom and Hanoi Telecom has made a strong commitment when Dinh The Phuc, director of EVN Telecom says that the two parties involved have plans to invest VND6 trillion in the first three years of 3G deployment.
Phuc reveals that his company has inked many deals with digital content suppliers, and digital content service is expected to account for 5-6% of their 3G service revenue in the coming years.
According to Phuc, digital content service now is taking a small piece in EVN Telecom’s turnover. With the 3G license, Phuc hopes it can generate more profits to EVN and Hanoi telecoms as well as to enhance their competitiveness.
Mobile carriers optimistically say that in the next three years the number of mobile users will increase from 50% of the population to some 80% in the next couple of years and to 100% in the next 15 years.
Rocky road ahead
Although 3G mobile carriers pin big hopes on 3G, many customers and experts express their suspicions about the benefits of the new technology.
Despite eagerness with the 3G technology, Thanh of Bluescope Steel still shows her worry about the high cost of service and expensive equipment.
She says that the mobile service charge will likely be more expensive than before because the 3G service offers various added values. Additionally, she is also worried about the high price of handheld devices compatible with the new technology.
However, in a talk about 3G service with Tuoi Tre, deputy minister Le Nam Thang says it is likely that the 3G charge will not be higher than the current 2G technology fee because telecom providers will save on the investment cost by upgrading their 2G infrastructures.
According to Thang, a price war may emerge soon among 3G telecom providers to lure customers for 3G development, and therefore, the charges will be competitive.
Pham Tien Thinh, who is a former strategy and business development director of Qualcomm in Pacific Ocean and South East Asia region, says on Thoi bao Vi tinh Sai Gon, an edition of Saigon Times Group, that 3G development in rural areas will not be easy because poor rural people’s demands are mainly limited to telephony services. The 3G deployment in the countryside will be slower than expected because residents have poor awareness about what 3G could bring.
“They prefer to use mobile phone for calling rather than surfing the Internet, downloading music or video,” Thinh explains.
The Saigon Times Daily
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