Saturday, May 8, 2010

The future of 3G in Vietnam

6 months after the launch of 3G in Vietnam, local telcos realize that 3G is not a gold mine as they expected since the revenue from 3G is quite modest compared to 2G.

For me, it is easy to understand. Let's look at an example, Mobifone 3G will cost you 150.000VND for one-month 384Kbps package and 300.000VND for 7Mbps package. I think it is expensive to most of Vietnamese people, even for those IT guys like me. Normal local users also have no reason to use 3G since Wifi is now available everywhere: home, office, cafes, hotels, restaurant...

So in the near future, I think 3G is still too far to reach for Vietnamese users. Just until its price drop to an appropriate amount (maybe less than 100.000VND for one-month), or there will be an integrated solution between home ADSL  and 3G, so users don't have to pay twice for the Internet, it will be the time for 3G. At this time, Wifi is still the best choice for most of local users :)

Thursday, May 6, 2010

Vietnam 2010 - A connected country

Last week, I had a trip to Can Tho to see the new bridge and nearby provinces include Vinh Long & Tra Vinh. This was the first time I was capable with an Android smartphone and a 3G connection. It has made my trip more fun :)

In the past, some long trips may took me up to 10 hours sitting in the bus doing nothing beyond looking at both sides on the road. But now, it does not last any longer. With a smartphone and 3G, I can play online games, looking at the map to see interesting places around me and searching for more related information. Technology really makes life easier in this situation!

I remember since the first time playing with the Internet, I never imagine that once day I can easily access Internet anywhere in Vietnam with just a handheld device. But in less than ten years, this has become reality. And it has enabled me to do much more thing, be able to access to a large amount of information on the Internet everywhere at anytime.

Then it made me think all Vietnamese now have a chance to access to Internet. So if they can utilize it, they can benefit much from a flat world nowadays no matter who they are, a peasant or just a worker. It turns out that education will be the key component for Vietnam in the next step, to reach the goal becoming a strong ICT country after it has become an Internet connected country.

Wednesday, March 24, 2010

Vietnam ICT has more than 200.000 employees


According to a statistic from Ministry of Information and Communication in 1/2010, Vietnam ICT now has:
  • 110.000 employees in Hardware Industry
  • 57.000 employees in Software Industry
  • 40.000 employees in fast-growing Digital Content Industry
It really surprises me since I think the number of developers in Vietnam is more than 100.000. But the number we can draw out from statistic above is quite modest.

For software outsourcing industry, the number of employees in a big India outsourcing company like: Infosys, Wipro... may reach 100.000. While the biggest outsourcing software in Vietnam, FSoft, has just about 3000. It means that Vietnam won't be able to compete in large outsourcing contracts, which require thousand of people.

Also most of Vietnam outsourcing companies are small, which make the employee have to change their skill frequently, as when the company finish a contract and get new one. This will lead to more multi-skill developers rather than those specialize in one specific field. And it would become a major problem for local companies in competing for intensive contracts.

However, hope these will become better as the number of employees in this industry continues to grow in upcoming years!

Wednesday, March 10, 2010

What's next step for Vietnam ICT Industry?


At the end of 2009, Vietnam government has taken the pledge to develop Vietnam into a strong ICT country before 2015. However, saying is always easier than doing and lots of people I know don't believe anything government said :). But at this time, Vietnam has many opportunities to turn this dream into reality, as in my previous article. So could Vietnam achieve this? I think it will depend much on next action from government and that's what I'm trying to find out via this article.

At first, take a look at what Mr. Le Doan Hop, Minister of Information and Communication conclude via the conference "Develop Vietnam into a strong ICT country" recently


The main idea we can draw out from this conclusion is that, at first step, the government will try to build a robust local market, include all the hardware, software and online services. The government also shows the ambition to gradually limit foreign services as much as possible and will help local companies to build substituted products. This clearly leads to many advantages for local companies like FPT, Vinagame, IDG porfolios... and create a barrier against multi-nation giants like Google, Yahoo, Facebook...

This seems to be a good policy to help local companies generate more revenue as well as help government gain more control of the local Internet industry. However, for me, I don't agree totally. From the view of a developer, I must say that the level of local developers is still far behind the level of US developers, so if we expect Vietnam will be able to do some products as well as Facebook, Google, Yahoo... and force local users to change, I believe it just make user more nervous for using bad products and slow down the participating of local user to a flat world.

Of course, some people will say if the government don't do that, Vietnam will meet many difficulties to achieve the goal becoming a strong ICT country. I think there are still many other ways. Remember that Vietnam is just a beginner in this new industry and lots of Vietnamese now just think inside. As a result, it will be easily vulnerable by changes of the whole industry. So before Vietnam could achieve great things, it should know how to learn and build a generation of professional who can work in an international environment as well as think globally.

And now is obviously the good time for Vietnam, many multi-national companies are seeing Vietnam as a next potential destination. And if the government could have some policies to tell them "Hey, I know you have much money as well as experience, I could provide you a lot of people able to quickly learn new technology. You can also use this market with population more than 86 million people as a test base before going to others", if so I would definitely come if I were an investor :). And these companies will help to build a next generation of global Vietnamese.

So everything is now in the hands of government, look forward to seeing what they do next.

Why Vietnam?


In my work, I have had many chances to talk to foreign developers as well as businessmen. One of the most interesting questions they often ask me is that "Why do we choose Vietnam?". And I'm so excited with my answer :)

1. Vietnam situates situated in the center of the Southeast Asia. And this could be considered one of the best destinations for multi-national companies to come, setup a branch before going to other Southeast Asia countries

2. The average human cost in Vietnam is still low compare to other countries like India, China, Europe... which is the main factor to many companies nowadays

3. Vietnam is an oriental country, which make it one of the best choices for Japan, Korea, Taiwan - those countries who are finding a similar country to oursource. The distance between Vietnam and these countries is just about 3-5 hours flying

4. Not only an outsourcing destination, Vietnam is also an attractive market with the population more than 86 million people. Quite perfect for some product-base companies to develop product and use it as a test market before going global

5. Vietnam government in recent years spent much effort in developing Vietnam into a strong ICT country, which result in many favour  favored policies to ICT companies

However, everything has two sides, Vietnam still has some risks for investors

1. The shortage of high-level labour force, which may cause many difficulties once day company want to broaden their business

2. Government is still reluctant to Intellectual Property (IP) protection law

In general, I believe Vietnam will soon become one of the best destinations for international ICT companies. Of course, many developers will not agree with me and still wonder whether Vietnam could achieve great things in this industry (as when I talk to many). However, why don't you try to think outside? As if you were an investor with tons of money and experience in management and ICT industry, Vietnam seems to be a very good destination with many advantages above, doesn't it? And you will definitely come as long as Vietnam provide you with a good labour force willing to learn and work in an international environment? If so, just prepare for it :)

Vietnam ICT: Some useful tips for investor


As a developing country with a large population, Vietnam turns out to become the next destination for many investors, especially in a fast growing sector like ICT. However, many investors had been trapped in local dot-com bubble in 2007, as they don't know much about this market. This is an extremely important factor since Vietnam policy is not mature enough, and the more you understand about the market, the more successes you can get. So if you are now an investor, what should you invest in to get much in a short time?

At first, take a glance at Vietnam ICT industry in 2009 

-  Telecom: $8.1 billion USD (~150.000 billion VND), 62% growth compared to 2008. Mostly from mobile service and ADSL and controlled by large own-state corporations VNPT, Viettel 

-  Information Technology: $6.26 billion USD, 20% growth
   +  Hardware: $4.68 billion USD, 14% growth 
   +  Software: $0.88 billion USD, 30% growth. Mostly from outsourcing and local software market 
   +  Online content & services: $0.7 billion USD, 58% growth. Mostly from SMS, online games...
      This statistic seems to be very interesting, isn't it? But as the industry grows quickly, investors have to catch up with latest trends to solve effectively their main investment problems.And to me, here are some trends will likely to happen in 2010 or later 

      -  The convergence of software and online content companies: Some popular software companies like Misa, Lacviet... are moving toward online because they see it as a way to spur the market coverage. And this may become a threat to some companies offering similar services 

      -  The online services may compete back the telecom: As when some VOIP technologies are mature enough, together with the mobile Internet become immensely popular, user can make a call via the Internet directly instead of the mobile service provider and this may lead to unpredicted situations. It will be prevented by the government or a new industry surround this will be created 

      -  The participation of MNCs (multi-national companies) to Vietnam market: With a large number of Internet users and the popularity of Internet, Vietnam has become a very attractive market for multi-national giants like Google, Yahoo, Facebook... Lots of them already have already finished a localized version for Vietnamese and make this market become rougher. Some local companies doing the same services are not strong enough to compete and may soon disappear

      If you have a large budget and plan for a long-term investment, Telecom or Hardware will be a good choice to keep your money growing at a basic level. If not, Software and Online services are prospective for bringing you many quick successes in a short time, but it is definitely more risky as there are also other local competitors with a normal budget and have the same though with you. So the winner will be who can make the smartest choice. There are so many elements for making a smart choice, but here are some of mine 

      -  Have a good technical team and a strong tech leader: I have met many investors so far and most of them often don't think the technical is important to the success of the company. However, remember that Vietnamese are able to copy and clone an online product very quickly. So having a strong technical team is what will keep you ahead of other competitors and achieve sustainable growth in a long time. 

      -  Broaden your relationship: Vietnam is an oriental as well communist country. No matter how much money you have, relationship is still the most important element for you to success in this society. The more relationship you have, the more smoothly your work will go 

      -  Understand Vietnamese culture: I have seen many foreign companies failing, just because they don't understand enough Vietnamese culture. So having a good CEO Assistant Vietnamese will help to build and harmonize a multi-culture environment 

      -  And also some other things, you can find in my previous article http://ngonpham.blogspot.com/2009/05/vi-sao-web-20-vn-chua-kiem-uoc-tien.html 

      No matter what happens, I still believe Vietnam ICT industry is really potential to invest in, at least in the next 10 years, as government has determined to develop it into a strong ICT country. So if you are an investor or a just a potential investor, why don't you think for making a deal? :)

          Go Mobile: The escape for local search engines?

          Search engine is always one of the hottest trends in the Internet world. At China market, Baidu has defeated the giant Google to become the number one local search engine, and this has inspired some Vietnam competitors to do a similar thing, to grow up a "Baidu of Vietnam". However, they all meet many difficulties now, due to the tough competition from Google, as I mentioned in past articles [1], [2]. But with the launch of local 3G, will there be any changes?

          Let's take a look at what 3G can shape our future. In recent days, I have been trying Mobifone 3G. It takes about 8.000VND for unlimited 1 day usage, 16.500VND for 3 days and 137.500VND for one month, you can find out more here. With one day unlimited usage, I could download hundreds of songs to my mobile phone, much better than the normal SMS download often take 15.000VND/SMS, not include the fee you have to pay for the GPRS data downloaded. So definitely, this will be the trend of future, when local mobile users become more intelligent and 3G connectivity becomes immensely popular soon.

          So, what will be the most important tool to a local mobile user? I think mostly the search engine, since Vietnamese users are fond of downloading music, photo to their mobile. A good search engine will be the main gate to access to the mobile Internet entertainment world. As a result, all local search engines are now moving toward this 

          Xalo.vn (http://m.xalo.vn) The company is now offering 10 services, some are free and some are not. For paid services, Xalo.vn require user to pay via SMS, by sending a SMS cost 15.000VND for 3 months subscription) 

          Socbay.com (http://m.socbay.com/) The company is now offering 5 search services: Music, Photo, Local, Dictionary, Ads. The company also collaborate with Mobifone, to launch the common mobile search portal http://msearch.vn. Besides mobile web version, the company also has a J2ME version to run on normal mobile phones.

          Google.com (http://www.google.com.vn) Google Mobile now offers a wide range of search via the mobile interface. However, they are still not popular as Google Web Search, and lacking music search is definitely a big disadvantage of Google. 

          So if local competitors can run fast, I think they may achieve many advantages against Google. It is quite hard to believe, but remember that most of local users are now using mobile just for listening music, downloading photo, reading newspaper. A small program with some basic features would be good enough, especially if local search engines work together with mobile service providers like Viettel, Mobifone, Vinaphone... to deploy the app to end-users, then they will create some difficulties for the giant Google. So look forward to seeing the next local search war on mobile :)

          How much are Vietnam IT companies?

          Have you ever wondered how much are Vietnam IT companies? To me, I am really interested in this and often watch the market value of international giants via Google Finance. However, many local companies are still not on stock market, so I often find out by basing on the similarity to other foreign ones. Let take a look at some outstanding IT companies at the beginning of 2010 

          1. Viettel:  The net income in 2009 is 10.000 billion VND ~ $540 million, the P/E (got from China Mobile) 11.83. So the market value of Viettel is estimated at $6.394 billion. So if they can reach their goal $15 billion revenue in 2015, the market value of the company will reach $25~30 billion and Viettel may become the largest company in Vietnam at that time. 

          2. FPT: No need to calculate :), just look at the stock market. The market value of FPT is now $610 million 

          3. CMC: The revenue and income is about 1/5 of FPT. So the market value of CMC may range from $120-$150 million 

          4. Vinagame: Some people speculate the net income of Vinagame in 2009 is 500 billion VND ~ $27 million, the P/E 17.15 (got from Kingsoft, 53.29 if got from Tencent), so the market value of Vinagame is about $463 million 

          5. MISA: The net income 2009 is 17 billion VND ~ $0.918 million, the P/E is ~20, so the market value of MISA is about $18.36 million 

          6. Lac Viet: The net income 2009 is 9 billion VND ~ $0.486 million, the P/E is ~15, so the market value of Lac Viet is about $7.29 million 

          7. Dot-com companies: According to my information, the investment from VC to these companies range from $0.1 - 2 million USD for 30% of the company. So the market value of these will range from $0.3 - 6 million.

          Some conclusion from above statistic

          - Telecom companies like Viettel, VNPT are the biggest players. Then to some companies FPT, CMC... which has a good distribution system, outsourcing, information systems... Then to the medium ones like MISA, LacViet... Then to smaller ones include dot-com companies

          - The fast growing of young online companies is a big surprise. It just takes Vinagame 5 years to equally reach the value of FPT in more than 20 years, for some other dot-coms 3 years to reach the value of old ones like Lac Viet, Misa... So I think the trend of online services and softwares will become popular in upcoming years, as it has much potention compared to others. 

          - With the strong ambition of government to develop Vietnam into a strong ICT country, it will contribute to make this industry explode, i.e more companies, more revenue, more opportunites for IT developers...

          So if you are a local developer, you may now have many chances to become a millionaire in the future ;)). Of course, building a giant like FPT, CMC... may be impossible to you, but a smaller one under $10 million would be possible. Everything you need is just a good understanding about the market to capture the opportunity, and a strong tech team to turn ideas into products. Then try to stick to other giants like Viettel, VNPT, FPT... those will provide you with all remaining things. But that's just my thought, do you think so ^_^

          Thursday, January 7, 2010

          Nexus One launched and how will Android rock Vietnam mobile market


          Google officially launched Nexus One yesterday and may make many users disappointed due to its high price.

          From my view, Google can't make their Android phone as cheap as user expected because doing so will make lots of users change to their phone and turn Google to become a big competitor of its alliance mobile manufacturers HTC, Motorola, Dell... That's absolutely not a situation Google want to be in.

          So I think the role Google Nexus One is just to stimulate the mobile market. With the fast growing of Apple sexy iPhone in recent two years, it's really hard for single mobile manufactures like HTC, Motorola... to compete because no one can understand Android as clearly as the creator Google. And the join of Google will help to bring a strong message to all people that "Android will definitely the mobile OS of the future, so you should ...buy an Android phone now :)"

          In Vietnam at this moment, you can purchase a new Android phone with the price from 5.500.000VND to 10.200.000VND (297-566$), still a little high compare to most of Vietnamese. But I think with the mature of Android in the near future, strong hardware manufactures like Acer or Asus can launch their Anroid phone as low as 3.000.000VND (166$), as they have done with their netbooks. Together with the growing of number of Android applications and mobile 3G Internet Vietnam, it will become a big strike to make lots of users replace their old Nokia device with a more powerful Android smartphone.

          Also I think Android will be a good chance for Vietnamese developers. Designed as a modern and very open platform, Android is quite easy for developers to dive into. All things they need is just experience about mobile and Java language, capable with some creative ideas, then everything will go. So look forward to seeing more Android  applications from Vietnam this year 2010 :)

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