VZCZCXRO2089
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHHI #0320 0980413
ZNR UUUUU ZZH
R 080413Z APR 09
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC 9456
INFO RUEHHM/AMCONSUL HO CHI MINH 5766
RUCNASE/ASEAN MEMBER COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS HANOI 000320 
 
STATE FOR EAP/MLS and EEB/CIP 
DEPT PASS TO USTR DBISBEE AND JMCHALE 
COMMERCE FOR OTEC/ITA CDICKSON 
USDOC FOR 4431/MAC/AP/OPB/VLC/HPPHO 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECPS ETRD ECON KPRV VM
SUBJECT: VIETNAM AWARDS FOUR 3G WIRELESS LICENSES 
 
¶1. (SBU) Summary: Vietnam's Ministry of Information & Communications 
(MIC) awarded long-awaited licenses for 3G mobile networks to four 
state-run carriers on April 2, 2009.  The move provides an immediate 
benefit to two U.S. companies, Qualcomm and Motorola, which sell 3G 
wireless network hardware.  Vietnam, with a population of 86 million 
people, has one of the world's fastest growing telecommunications 
markets, with 66.3 million mobile phone subscribers at the end of 
2008 - an 87 percent increase over 2007.  End summary. 
 
¶2. (U) Vietnam's Ministry of Information & Communications awarded 
the first of its long-awaited licenses for 3G mobile phones on April 
¶2.  The new networks will allow faster downloads of music and movies 
on next generation phones and other 3G wireless devices.  MIC issued 
the licenses, all in the 2.1 GHz band, to four state-run carriers, 
including military-owned Viettel; Vinaphone and MobiFone (both run 
by state-owned telecoms giant VNPT); and a joint venture between EVN 
Telecom and Hanoi Telecom. 
 
State-run S-Fone and GTEL Mobile also submitted bids but were not 
selected.  MIC gave the four operators just three months to get 
their 3G networks up and running. 
 
¶3. (SBU) The awarding of the licenses provides an immediate benefit 
to two U.S. companies, Qualcomm and Motorola.  Qualcomm manufactures 
chipsets for 3G capable handsets and Motorola sells both 3G handsets 
and hardware for next generation wireless networks.  The Embassy, 
including the Ambassador, has advocated on behalf of the two 
companies on several occasions. 
 
¶4. (SBU) Qualcomm's Julie Garcia Welch expressed satisfaction at the 
awarding of the licenses and said Qualcomm was interested in 
fostering the growth of Vietnam's 3G mobile industry.  In addition 
to Qualcomm, she said there was a "strong global eco-system of 3G 
operators, vendors and content providers" who could benefit from the 
GVN's decision. 
 
¶5. (SBU) Motorola will now move ahead with a planned rollout of 3G 
infrastructure for Vinaphone, one of the four license recipients, in 
Vietnam's largest cities of Hanoi, Danang and HCMC.  Motorola's 
partner in Vietnam, Chinese telecom giant Huawei, will rollout 3G 
infrastructure in smaller towns and cities.  While the Government of 
Vietnam (GVN) hopes to extend 3G coverage to the countryside, where 
70 percent of the population still resides, extending the network 
throughout the country will likely take years. 
 
¶6. (SBU) Motorola's representative in Vietnam, Dr. Ray Owen, while 
expressing satisfaction at Motorola's $155 million deal with 
Vinaphone, questioned the GVN's decision to invest millions of 
dollars in 3G wireless technology at the expense of Vietnam's 
wireline broadband infrastructure, which he described as in 
"appalling condition."  Currently, just 1-2 percent of people in 
Vietnam have access to high-speed internet connections. 
 
¶7. (SBU) Owens noted that while mobile telecom carriers in the 
United States and Europe have spent billions of dollars in recent 
years to build infrastructure for 3G networks, profits have been 
elusive for those operators.  Carriers hoped to earn more from 
existing subscribers by providing them with 3G applications such as 
video, mobile TV and games; yet, the majority of subscribers are 
content to use their handsets to make phone calls, which they can do 
just as easy using the old 2G technology. 
 
¶8. (U) Vietnam's telecommunications market, ranked as the world's 
second-fastest growing in 2006 by the International 
Telecommunication Union (ITU), continues to develop rapidly on the 
strength of its mobile phone sector.  According to Vietnam's General 
Statistics Office, Vietnam had 66.3 million subscribers at the end 
of 2008 - an 87 percent increase over 2007. 
 
MICHALAK