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The Internet In Vietnam - Update 2002

By: V V G staff


Our web site where you are now reading shows remarkable new levels of interest.  Our readers (about 12,000 every month - In January 2014 our readers were about 35,000 each month!) stay on line for an average of 16 minutes.  The hits recorded last month exceeded 300,000, and for the prior 12 months they exceeded 2.6 million. The number of serious business and investment inquiries to our office shows a new level of growth perhaps due in part to the interest in these web pages.  

But there is more. The Economic Indicators show real growth in the number of projects starting up in Vietnam and the development of older projects in terms of implemented capital (steel in the ground).

Construction projects are now being considered, and low-growth improvement is even seen in the long-delayed cleaning-up of 23 September Park in HCMC. See photos of the changes.  And even the project adjacent, long called the Black Hole of Saigon, has new thatch huts for local events  to replace years of walled-off empty land.

But we were stymied to find youthful, leading business leaders running important State Owned companies who could not understand investors' needs when we presented a chance to obtain funding for "humanitarian projects." We asked them to identify projects that will create jobs or other needed improvements for Vietnam.  

We suggested highway development, utilities construction, and re-building port facilities as means of creating both jobs and allowing for both a return of the investment dollars and an attractive profit to grab the offer.

Our friends championed a long over due housing project for the poor in HCMC.  They did not seem to want to consider the needs of the investor for a return of his investment money or his profit.  It took a long time to explain that a housing project, while an excellent opportunity in other nations, won't fly in Vietnam unless and until the State is able to sell bonds to the domestic and international market to cover its developmental costs and investor profits. Why not just collect the rents of the [poor] tenants, our friend asked? 

When we approached advertising agencies in Vietnam to sell Internet ad space we were surprised to hear that "an e-commerce web site is more than a newspaper. It's a trade centre,"  and ad agencies are not inclined to add value to the products of their clients, as they don't work as "an estate-agent who invests additional money to advertise or even to decorate the house for a better price."

The quote is correct.  What this man could be thinking about has absolutely nothing to do with 20th century commerce, much less that in the 21st century.  Are Time-Warmer, The New York Times Company, and Capital Cities not trade centers?  How about the Hurst Organization in the 1930s? As long ago as 1939 the movie by Orsen Wells, Citizen Kane, made it clear that the Hurst trade center was what that media giant was all about.

Surely web sites can only be contrasted with such giants, yet how very strange that business leaders in Vietnam have not yet caught up to the 1930s concept of what a media organization is all about.

My own father's company from the 1940s to the 1970s used BBD&O who never failed to ad value to his products and ads to enhance sales-worthiness and help to justify the high fees they received. 

Both State controlled and many in the foreign media report about Vietnam’s plans and accomplishments in growing the Internet connection.   Most often the reports are written in terms of hopes and dreams as accomplishments are rare.

The reality is suffered by those who experience Vietnam's lack of connectivity.

From Vietnam, researching the world’s literature now available on the Internet is a chore, if possible.  The connection if available is problematic.  If sites are not blocked by the many firewalls in place, the task of simply remaining connected and then re-connecting is an onerous one. Receiving a large attachment (anything larger than 20 kb) is difficult; downloading a 2 MB file is impossible.

Articles are printed every month now about the growth of cyber cafes and new E-Commerce interests in this nation that is in still so many ways a frontier. The good folks running the State are concerned about easy access to different perspectives from the Party line. 

But the leaders will eventually learn that a free flow of information aids commerce, and commercial strength aids and calms an intelligent but restive public.  No family leader with a good education for his children, a good job for himself, who is able to support his family and see it grow stronger with every new generation will want or tolerate any change that might jeopardize that growth.

It is often said that we become conservative in action and thought when we have something of value to conserve.

We hope that this growth will come about in time for the good people of Vietnam to take advantage of the next regional economic turn-around. They should be allowed the tools provided by easy and inexpensive Internet access to increase their own personal wealth  and stop the flow of trade from going elsewhere.

However, in spite of glowing reports of growth, real Internet development in Vietnam is at a near stand-still. 

Presented below are excerpts from current and recent articles that discuss the Internet in Vietnam and other Asian nations.  Comparisons between ASEAN and APEC nations force the conclusion that as the number of telephones in a nation increase both in overall numbers and as a percentage in households, the band width available per internet user (speed of connection) increases and the cost for usage of the internet goes down.

Read how Vietnam remains cursed with the lowest overall per subscriber and per capita bandwidth in all of SEA, and thus sufferers both the slowest connect speed and far above median cost for that privilege.

Full text citations are given for those interested. The articles taken as a whole show that  the investment cost to achieve higher speed connections is negligible and pays for itself. 

The only possible conclusion to be drawn is that the absence in Vietnam of modern interconnect technology is intentional.  The authorities presumably think that tight control is more important than true expanded Internet access.  Yet, Singapore and Malaysia also use firewalls, have tight controls,  but allow high speed access.

Thus denied actual capacity to enter the mainstream of ASEAN E-Commerce, Vietnam's leaders keep Vietnam distant from World commerce as well.  


6 March 2002  from Canada NewsWire

BCE Teleglobe Connects Vietnam's VDC to North America
http://www.newswire.ca/releases/March2002/06/c8251.html   We cannot be certain how long this URL will remain active.

RESTON, Va, March 6 /CNW/ - Teleglobe Communications Corporation (BCE Teleglobe)(NYSE, TSE: BCE), a leading provider of global communications and e- Business services, today announced it has established a connection with VDC, Vietnam's largest Internet Service Provider to offer Internet connectivity to its IP backbone in North America by satellite.

BCE Teleglobe is providing VDC with a satellite connection between North America and Vietnam to its global high-speed network backbone through a dedicated high bandwidth connection. VDC is using the bandwidth to offer faster, more reliable Internet connections and international data transport to business and consumer customers in Vietnam.


25 February 2002  541 Vietnam Economic Times 3

Internet access set to broaden
The aim is to reach a rate of 1.3 to 1.5 Internet subscribers per 100 people by 2005, and raise the number of users to 5 per cent of the population from the current level of less than 1 per cent.

Vietnam hooked up to the Internet in late 1997 but high fees and a slow connection and download have kept the majority of Vietnamese from using it.

Vietnam takes 37 seconds to connect compared to the standard of 10 seconds overseas, and 90 seconds to download compared with the standard 27 seconds. 

The plan promises by 2005 public telephone networks  will access the Internet from all communities in the country and points of presence (POP) will be expanded.


 

21 February 2002 

The Internet In Vietnam - Update 2002
By James Borton   http://atimes.com/se-asia/DB22Ae02.html  We cannot be certain how long this URL will remain active.


HANOI - Nguyen Anh Tuan, the slim, khaki-clad, blue-shirted entrepreneurial 38-year-old father of Vietnam's Internet service, Vietnam Data Communications (VDC), logs on daily to communicate with his strategic and unlikely partner, 4Real Software in Houston, Texas.

The Internet is at the center of Tuan's daily life on tamarind-lined Ba Trieu street in Hanoi. Here, in his Spartan and modern office with its highly polished wood floors, the technopreneur spends several hours each day on his laptop, a new Sony Vaio, communicating online to his international partner and others in the West. For Tuan, the Internet is an enabling technology breaking down both physical and political barriers between former enemies. The Internet is playing a significant role in Vietnam's economic development and is propelling the national economy down the road into the global economy.

Tuan's expanding government-controlled business unit, Value Added Service Center, has licensed its proprietary software, designed for the Palm Pilot, to the Houston-based software company, which holds an export contract valued at US$1.5 million. 4Real Software and Tuan's enterprising state-controlled division are well into the second year of a strategic relationship to develop the software and information technology (IT) export industry in Vietnam.

"Yes, Vietnam is now connected to the world and I see an opportunity to do something significant for the country. We have bright, talented young people and they are ready to participate in the globally competitive software industry," remarked Tuan, looking up momentarily from his computer. Among their achieved successes is a joint effort with Microsoft to train hundreds of software developers in Vietnam.

No doubt, for some early foreign investors the promised economic reforms have stalled, but there's no disputing Vietnam's large numbers of IT-literate young entrepreneurs pushing the government for greater access to the Internet.

Adding new impetus for those entrepreneurs still pursuing domestic market opportunities, Vietnam's Directorate General of Posts and Telecommunications (DGPT) trumpeted its pre-Tet plans to license one or two more firms to open Internet gateways later this year. "We will license one or two more Internet access providers," Mai Liem Truc, the head of market regulator DGPT, announced just a few weeks ago in Hanoi.

The country currently has just two Internet gateways, both operated by the state-run VDC, which provides access for four Internet service providers (ISPs).

The dramatic and surprising business venture between Vietnam's leading ISP, VDC, and an overseas Vietnamese, Kien Pham, promises to help modernize Vietnam and signals a new beginning for a poor country still slowly struggling to find a balance between control - as evidenced by what many regard as the glacial pace of its economic reforms - and the exigencies of a free marketplace. A government decree issued last year makes clear that all Internet gateways will remain state-controlled.

Vietnam's own nascent dreams for a software industry are further buttressed with the recent signing of the bilateral trade agreement with the United States. In return for vastly improved access to the coveted US market, Hanoi has finally agreed to provide foreign investors with transparent approvals processes and an end to dual-pricing hurdles.

More Vietnamese Silicon Valley-trained software engineers are being encouraged by the state-controlled Post and Telecommunications. They are being brought into the sensitive and highly politically charged government-controlled Internet service.

"I see no issues here at all," claims Tuan. "We have a partner who has something to contribute to our success and to his own company. We do not need to discuss politics or reconciliation. Our focus is business development and making profits."

Last year alone, in both Ho Chi Minh City and Hanoi many programming courses have sprung up, with numerous overseas tie-ups. In old Hanoi, not far from Tuan's modern three-story government offices, there are more than 75 Internet cafes, offering Internet access while serving up coffee, bike rentals and tour packages, a big jump since a year ago. In the south, along with the Honda Dreams choking the streets of Ho Chi Minh City, there are several hundred Internet cafes: "Vietnam is making great strides forward in connecting the country with the West and the latest technology developments," exclaimed the optimistic Tuan.

Although mindful of the benefits of the Internet, particularly its aim of establishing the country as a global IT player, the ruling Communist Party still considers free flow of information a threat to its hold on power. Yet Tuan's optimism belies IT's cloudy, if not challenging - as the result of daily government censorship - future in Vietnam. For example, VDC's firewall intercepts every single request to access a site in Vietnam and then passes it on only if it complies with the country's censorship regulations. The Ministry of Public Security and Ministry of Culture and Information established its firewall system with the advent of Internet service access in Vietnam.

Despite these security issues, the government has embarked on an ambitious IT imperative by establishing a subsidized software park for start-up companies at Quang Trung Software City, about 30 minutes from downtown Ho Chi Minh City. Their dedicated service lines allow faster access time, while rates are reduced to serve start-up companies better.

Through Vietnam Post and Telecommunications, the government has targeted a software turnover of at least $100 million by 2005. For the first time since its development, VNPT's deputy director, Hoang Thai Tho, indicated it earned more than $1 billion last year, installing 4.23 telephones per 100 people.

Saigon Tech, which is in the same software park, in a joint degree agreement with Houston Community College System (HCCS), offers programs in computer and information science technology. "Our students, now more than 180, are benefiting from the small classes and excellent faculty, and all our courses are taught in English," said Nguyen Thi Anh Thu from Saigon Tech.

All these initiatives provide some measure of hope to Vietnam's younger generation. Independent software developers in Ho Chi Minh City, such as Phil Tran of Glass Egg Digital Media, recognize that Vietnam is poised for growth in an industry that is momentarily in a state of contraction since last year. Glass Egg has found its niche creating detailed animated characters for some of the largest game publishers. "We are creating our own Silicon Alley work atmosphere here in Vietnam and our team of young bright people are ready for all new challenges," said Tran, a University of California at Berkeley graduate.

Also, Cisco's chief representative Ha Huy Hao reveals that it will open a Cisco Networking Academy in Hanoi soon. "Although the IT developments here have not reached the international standards yet, the Vietnamese are intelligent and eager to learn new technologies," adds Hao.

With this boost from the software developers and training centers, no wonder DGPT aims to increase Internet usage to at least 4 or 5 percent of the population by 2005. Don't blink, this may be a reality. Vietnam has witnessed, over the past four years, an annual 10 percent growth in telephone subscribers, while Internet subscribers grew at an 80 percent rate per year.

(Copyright 2002 Asia Times Online Co, Ltd. All rights reserved. Please contact ads@atimes.com for information on our sales and syndication policies.)
 


November 21, 2001  http://www.itu.int/asean2001/documents/pdf/Document-25.pdf We cannot be certain how long this URL will remain active.

 

For the year 2000 (unless otherwise stated)

 

Fixed and Mobile Telephone subscribers per 100 inhabitants

Internet users as % of population

Internet Pricing  In US$ for 30 hours as of October 31, 2001

Bandwidth (bits per second BPS) per subscriber/per capita

% of households with a telephone (census data applied to residential phone lines)

Myanmar

1

0

NR

NR

NR

Lao P.D.R

1

0.1

$45

1,898 / 0.56

3%

Cambodia

1

0.1

$50

1,870 / 0.57

1%

Viet Nam

4.6

0.3

$36

470 / 0.52

8%

Indonesia

5

0.9

NR

816 / 1.62

8%

Philippines

13

NR

$31

1,448 / 5.11

13%

Thailand

16

3.8

$24

625 / 7.22

28%

Malaysia

42

15.8

$18

442 / 31.53

66%

Brunei

54

 

 

 

 

Singapore

117

24.9

$15

1,360 / 656.74

98%

As the number of telephones in a nation increase in overall numbers and as a percentage in households, the band width available per internet user (speed of connection) increases and the cost for usage of the internet goes down.

Vietnam has the lowest overall per subscriber and per capital bandwidth thus the slowest connect speed, and far above the median cost for use.

Since the investment cost to the nation to invest in higher speed connections is negligible and pays for itself, it is clear the nation is in no hurry to increase access to the internet and in stead would rather remain in tight control rather than expand its capacity to enter the mainstream of ASEAN E-Commerce, much less the world’s E-Commerce.


August 2001 http://www.digitalfilipino.com/content.asp?FileName=%5Ce-commerce%5Cbandwidth2.ini

We cannot be certain how long this URL will remain active.

So why can’t ISPs lower their service offering?

As prices of Internet access become cheaper due to competition, the cost of Internet access is not decreasing for the providers especially to ISPs who pays bandwidth in terms of dollar pricing. An ISPs in Metro Manila pay 6,000 to 20,000 for its leased line cable plus US$1,000 to 1,700 for every 64Kbps Internet bandwidth. In the provinces, ISPs almost pay twice the amount for a similar infrastructure.

Comparing to other APEC countries, here’s the 64kbps Internet leased line cost per month:

Country

Cost per month in US$

Australia

45

Brunei

110

Chile

150

Hong Kong

190

Indonesia

500

Japan

16

Korea

300

Mexico

907

Peru

300

Philippines

1300

Singapore

500

Taiwan

500

Thailand

1200

Vietnam

187

 


 

April 26, 2001    http://www.eetimes.com/story/OEG20010423S0123  We cannot be certain how long this URL will remain active.

Barriers to business
Despite its many aspiring tigers, Vietnam is still also a country of hidden dragons. The American Chamber of Commerce (AmCham; Hanoi) cites insufficient protection for intellectual-property rights; limited, restricted Internet access; excessive taxation; and high telecommunications costs as the main business impediments to creating a domestic IT market.

Despite a government directive (76/CP) and the signing of the U.S.-Vietnam Bilateral Copyright Agreement in 1998, Vietnam's software piracy rate continues at an astounding 99 percent of all titles sold. Monthly rental of a 64-kbit leased line costs nearly $2,000 here, compared with $319 in Thailand, $69 in Singapore and $40 in the United States, while data transmission speeds remain much lower than advertised because of chronic congestion. The congestion is made worse by a firewall system for Vietnam's 25 mail and 21 file-transfer ports that also blocks standard business software, such as Lotus Notes and Real Player.

Even government officials admit that basic connection charges remain a major obstacle to increasing Vietnam's tiny online community. On top of a 150,000 VND (roughly $10) setup fee and 30,000 ($2) VND monthly charges, Internet access costs about $1.05 per hour of dial-up, five times that of regional neighbors and hundreds of times higher than in the United States. "The first week I was online it cost me hundreds of dollars; can you imagine it?" said Bach Hung Khang, president of Vietnam's Association for Information Processing and the godfather of Vietnam's Internet.

Vietnam Posts and Telecommunications Corp. (VNPT) has already cut costs seven times, each time by 10 to15 percent, with the next cut due July 1, noted Bui Quoc Viet, director of the state-owned monopoly's information center. Viet argued that the revenue is essential for VNPT's plans to install 900,000 new digital lines this year to meet the politburo's target of achieving five lines per 100 people by the end of 2001, an upgrade estimated to cost $700 million, according to IDC.

  


October 2000  http://www.ai3.net/meetings/2000aut/pdf/country/ioit.pdf We cannot be certain how long this URL will remain active.

• International band width:

– Hanoi GW: 1*E1 to JP via KDD, 1*E1 to HK, 256k to AU,

– Hochiminh city: 1*E1 to USA via Sprint, 1*E1 to SG

• Internet users: 80.000/80.000.000 population (0.1%)

• Tariff: relatively high, 0.85USD/h for dial-up user

• Low penetration rate in AC. EDU. sector


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