Subscribers to "S-Fone", the Vietnamese CDMA mobile communications service with participation of SLD Telecom, a joint venture led by SK Telecom, reached 1 million on September 27. For SK Telecom to reach the 1 million subscriber target, a major gateway to ramp as a major carrier in Vietnam, the November decision for capital increase played a definitive role. S-Fone, which launched services in July 2003, had experienced some difficulty in attaining subscribers last year due to the limited areas allowing calls compared to leading carriers.
Along with a capital increase, S-Fone, which has announced this year an important basis for aggressive growth, has expanded service coverage for the first half, along with intensive marketing. This has resulted in a net increase in subscribers, of 370,000 at the end of last year to 630,000 this year, resulting in a total in excess of 1 million.
Although billing per minute is prevalent in the Vietnam market, S- Fone launched its business with a system of billing every 10 seconds for the first time in the market, and led fee policies by launching diverse optional fee plans. In March, the "Forever Fee Plan", which had abolished the prepaid incoming/outgoing period restriction, sparked off a rapid increase in subscribers. In August, the "Forever Couple" fee plan, which allows unlimited calls to a designated line within the network, was launched to further improve fee competitiveness.
To strengthen network competitiveness, 200 base stations were newly built in the first half, while service regions, which were restricted to the major cities of the existing 37 provinces, were expanded to cover the 64 total provinces. Call quality was also improved, by applying up-to-date operation techniques for quality improvement, such as optimization of base station networks.
S-Fone is conducting its project for the second half (the second Quantum Jump) with the target of at least 1.2 million cumulative subscribers by the end of the year.
To achieve this goal, from October 4, S-Fone launched services based on the EVDO network for the first time in Vietnam in five major cities including Hanoi, Ho Chi Minh, and Da Nang. EVDO services consist of real time TV (6 channels) and are expected to spark not only an increase in ARPU but also growth in subscribers. Korean cultural content, including Korean dramas highly popular in Vietnam, are also planned for provision, raising the expectation of joint entry of content related businesses in the future.
In addition, S-Fone plans to deploy 320 base stations in the second half, to expand coverage over population up to 71%, devising diverse fee policies, additionally acquiring a large distribution network, and creating a new brand image by rearranging BI (Brand Identity) and SI (Shop Identity).
With a population of 84 million, as of the end of July 2006, the mobile phone penetration rate in the Vietnam market was 18.5%, while this year, net subscriber increase exceeded a monthly average of 800,000. The market itself is showing consistent growth, and the future business outlook is quite bright.
SK Telecom's CEO Shin-Bae Kim remarked, "Vietnam's S-Fone subscribers exceeding 1 million will be an important milestone reconfirming the direction that Korea's telecommunications industry must take. Through aggressive entry overseas, SK Telecom will contribute in establishing a new growth model that will enable the joint development of related industries such as communication services, content, and handsets, and lead the growth in national competitiveness.
The Mobile World subscriber database estimates that Vietnam finished the first half of this year with just over 13.1 million subscribers. That represents a market penetration of a little under 16%."
Posted to the site on 2nd October 2006
Posted to: www.cellular-news.com/story/19635.php