2012: A turning point for Vietnam’s ICT industry, says IDC

IDC believes that Vietnam will witness a transformation in its information and communication technology (ICT) industry in 2012.
As the country crosses over into the digital frontier, IDC expects public services to be enhanced by ICT. The country’s marketplace is also likely to be increasingly technology-enabled, IT outsourcing opportunities will grow, and the nation’s infrastructure readiness will be much higher.
Drawing from the latest IDC research and internal brainstorming sessions amongst IDC’s analysts in Vietnam, the following are the top 10 key ICT predictions in 2012. These trends are what IDC believes will have the biggest commercial impact on the Vietnam ICT market this year.
1. Vietnam IT spending will grow by 19% in 2012 IDC predicts that IT spending in Vietnam will project a growth rate of 19.2% in 2012 following a modest growth of 8.4% growth in 2011.The total IT market in Vietnam is expected to reach US$3.25 billion in 2012. If market forecast materializes, Vietnam will be among the top IT spenders in Asia/Pacific in 2012.
2. Cloud adoption in Vietnam will move from pilot phase to deployment across broad applications In recent years, both Vietnam Government and enterprises have taken steps to boost the development of cloud computing in the country. They are embracing this new technology as a way to bring down CAPEX and achieve cost savings. So far, cloud adoption has seen good progress and IDC expects the trend to continue.
3. Telecom consolidation will drive telcos to focus more on customer service Currently, there are a number of Telecom operators in Vietnam, most of which are owned by the government including VNPT (owned by two operators: Vinaphone and Mobifone), Viettel (Military-run), and Beeline (a joint venture between VimpelCom and Gtel – under the Ministry of Public Security), EVN telecom, Sfone and Vietnamobile are the only two private operators. The telecom market has almost reached saturation point with nearly 90 million subscribers but 90% of the market share is captured by Vinaphone, Mobifone and Viettel. The other operators are facing fierce competition and IDC believes that in 2012, large enterprises in Vietnam will acquire the smaller players.
4. Vietnam smartphone shipment will reach 2.7 million unit mark in 2012 Smartphone shipment made up 9% of the entire Vietnam mobilephone market in 2Q2011. This amounts to over 400,000 units. With the introduction of cheaper smartphones, IDC expects shipment numbers to grow exponentially this year, by end of 2012, Vietnam’s smartphone market is forecasted to reach 2.7 million units.
5. Increase in smartphone usage will accelerate VAS mobile development In recent times, the country saw slow growth in 3G users due to lack of mobile applications that meet users’ requirements. Although voice services accounts for 80% of the total revenue, it is a declining market. As voice services is approaching saturation point, some carriers are forced to reject new voice subscribers. Value-Added Services (VAS) or Service Enablers is seen as a necessary solution to retain customers, helping carriers bring in more revenue to offset the poor performance of voice services.