Profile on Vietnam

ICT

Vietnam is one of the key emerging markets in the ASEAN region largely due to the strong expansion and investments in the telecommunications networks.

The World Economic Forum’s annual Global Information Technology Report released on March 25^th lists Vietnam (together with Malaysia and India) as one of the world’s fastest growing centres for IT. When the report first commenced in 2001, Vietnam was 74 out of the 75 countries listed; in this year’s report (which now includes 133 countries) Vietnam has moved up to 54^th place - a considerable achievement. This remarkable move forward in technology is largely due to the tax incentives and subsidies that the Vietnamese government has offered to entice foreign investors. The government has also focused on investing in IT education, with billions spent on the modernisation and expansion of the telecommunications systems, in particular the upgrading of Vietnam’s broadband and mobile phone infrastructure. As of 2008, Vietnam had more than 20 million internet users (putting it in the top 20 worldwide), 29.591 million main phone line users, and 70 million mobile phone users (placing it in the top 11 and 13 around the world respectively).

Foreign investment

In 1986, Pham Van Hong (the then Prime Minister of Vietnam) introduced limited private ownership of companies and lifted price controls, paving the way for foreign investment. This was aided again when Bill Clinton lifted the US trade embargo (imposed during the Vietnam War) in 1994. According to the International Monetary Fund, Vietnam has the fastest growing economy in Asia behind China and Cambodia with an average annual GDP rate of 7.2% from 2000 to 2009. From 1986 to 2008 foreign direct investment in Vietnam sky rocketed from zero up to a peak of US$ 60.3 billion.

However, the performance of the economy indicates that many foreign investors have found the market to be a challenging one, with investors needing steady nerves and trust in the booming domestic growth and private industry. In 2008, inflation peaked at 28.3% which was closely followed by the global recession. With the benchmark VN Index plunging to 66% that year, many investors lost confidence and bailed out of the market – many selling their stocks at a great loss. For those who stayed though, last year the VN Index rose by 57% and, as of March 2010, was up a further 3.5%.

In many ways Vietnam is following closely on the heels of China. It has experienced many of the same social problems, including a widening gap between the quality of life in cities and the countryside, exploitation of cheap labour and widespread corruption according to its position in the Transparency Index. It is many of these social issues which have led to the rapid economic development with manufacturing being far cheaper than in many foreign countries.

Telstra in Vietnam 

Telstra International has recently completed a programme of infrastructure development in Vietnam, with fully diverse, on-net PoPs now available in Ho Chi Minh City and Hanoi. This is further enhanced by our strong partnership with Viettel, one of Vietnam’s largest, full service telcos. As a result, we can offer a portfolio of networking solutions in Vietnam to meet the needs of our customers. Some of our key product offerings are outlined below:

IP VPN

Telstra can deliver a highly resilient, seamless IP VPN service across Vietnam, with further extension into Laos and Cambodia. A dual-POP deployment at the two major Vietnamese cities of Hanoi and Ho Chi Minh City, together with backbone diversity, enables a strong, fault-tolerant network delivering the same high performance levels offered by Telstra worldwide.

International Private Lines and Ethernet Private Lines

Telstra International extends IPL and EPL capabilities into Vietnam via the collaboration with Viettel. This enables cost-effective, secure, dedicated connectivity to customers wishing to connect their global/regional offices into Vietnam.

Call your account manager today to find out how Telstra can support your business in Vietnam.