Vietnam is on the verge of banning chat apps like Viber, Whatsapp, Line, Zalo, and WeChat

Anh-Minh Do
5:35 pm on Aug 21, 2013


Reuters just caught a doozy of a news article concerning Vietnam’s ever-changing internet policy. Now the Vietnamese government is looking into a policy that would ban chat apps like Viber, Line, Whatsapp, KakaoTalk, and WeChat. On the heels of a highly controversial policy a few weeks ago that would effectively prevent social media sharing of news, the telcos are getting together to lobby authorities to these popular online messaging apps. Note that all of Vietnam’s major telcos are owned by branches of the Vietnamese government, such as the army.

According to a representative of Viettel Telecom, one of Vietnam’s largest telcos:

We will lose 40 to 50 percent of our revenue if all of our 40 million customers use Viber instead of traditional call and text.

In other words, Vietnamese telcos are afraid of losing revenues. It’s short-term and protectivist thinking. The ban was addressed by prime minister Nguyen Tan Dung, who stated that the ban would affect all over-the-top (OTT) services – i.e.: any content delivered across mobile data

This raises concerns about censorship in Vietnam

With this proposed ban, along with the online news decree from earlier this month, many in the international community are going to call into question Vietnam’s censorship laws. Some have tied up Vietnam’s social media censorship to roots in a copyright battle between traditional newspapers and online media, but this latest possible ban is clearly protectionist in nature. But if the ban and the decree both go down, it’s no doubt that the world will wonder how open Vietnam truly is.

Vietnamese telcos don’t understand business?

On the other hand, this protectionist way of doing things – which is reminiscent of China’s controls and regulations on its own internet – may betray a misunderstanding of the potential that OTT services bring to consumers. Chat apps like homemade Zalo and global success Viber get people on 3G, something that telcos will likely be happy to see. The problem is that the telcos only see that they’re losing money on texting and calling. What they don’t realize is that getting people on 3G could bring in greater revenues from other online services in future, such as virtual items, SMS banking, and mobile commerce. They’re cutting off a potential gold mine that many yougn mobile startups want to get in on.

There are two key points that telcos are currently missing. One, they’re too focused on texting and calling rather than 3G growth; and, two, they’re skimming way too much off the top of SMS transactions (sometimes up to 40 percent), thus stifling many potential business models. They don’t realize that if they get more people signed up for 3G and making SMS transactions that they will significantly grow their revenue pot in the long run. But they want the money right now. This is classic Vietnamese thinking.

Let’s not forget what the telcos have done for Vietnam

At the same time, by all rights, Vietnam’s telcos have been one of the biggest drivers of Vietnam’s staggering internet penetration. It is widely considered across Southeast Asia that Vietnam has the best 3G services and wifi capabilities in the region. It’s not only cheap, easy, nicely decentralized, and reliable, but it’s also penetrated into the edges of Vietnam’s countryside. It’s the envy of the whole region.

At the same time, these same telcos that have pushed Vietnam’s infrastructure forward have totally missed the boat on added services on top of their data waves. In Thailand, by comparison, the three major telcos are investing heavily into mobile startups that could offer new and valuable services to consumers, emulating what Japan has been doing for over a decade. Thai telcos see that giving telco customers more services allows the firms to compete with each other better. Vietnamese telcos, on the other hand, are pushing for a huge market, but no added value services.

At the end of the day, there are a lot of consumers, but the telcos just want them to text and call? That’s not very forward thinking.

(Editing by Steven Millward and Paul Bischoff)

  • Malcolm

    Vietnam thinking is always short term, immediate benefit, grab $1today rather than $100 tomorrow. Not only do VN telcos not understand the potential income streams within their own industry, they have very poor knowledge of what the emerging mobile consumer market wants, government control of media is approaching paranoia status which does not help either.

  • Andrew

    “Don’t listen to what the Communists say, but look at what they do.” Nguyen Van Thieu – Former South Vietnam’s President

  • Hung

    This statement is a very narrow minded statement: “We will lose 40 to 50 percent of our revenue if all of our 40 million customers use Viber instead of traditional call and text” … if you can compete in business, then either you do it better or quit doing it. Instead of competing, you blocking it. This is so stupid.

  • Anonguy

    It’s “protectionist”, not “protectivist”.

  • Ronan

    its not so much communism in vietnam, they are actually very money driven, the big problem in vietnam is the ones in power are more or less just doing one big robbery, its not that the money from government companies flows to other than their own personal pockets.

    It was helping other people it would be fine, but theese people they get all the profits in their own pockets so they drive around in their big Bentleys and sniff rhino-horns, while the people is stuck being poor.

    They make laws not for communism but to get more money for themselves and they see their people as people they can rob from, its ugly.

  • Ronan

    And ofcourse they are scared for the news also because everybody knows its a big robbery, all state driven companies are blood red figures, they use incredible amount of the peoples money on things that always fail, is totally overpriced because they stuff their own pockets.

    When the shit hits the fan in vietnam which it will soon at some point, all theese government companies will be having huge debt they never can or will pay back, and the people will pay for it.

    They have insane amounts of money theese people that they are ripping off from the country, and they are terrified of their own people thats why they have strict censorship and try to avoid any news or anything. If a tv programme mentions Vietnam you get black screen right away if it airs on your TV.

    But swiss banks are probably happy for the elite, but its ugly to witness.

  • Ronan

    All those who say USA was the big bad wolf and all that in the war, they are missing out what came through in vietnam and how people still suffers there. The economic upswing yes, it happened, but most of the money got skimmed by the elite so they can buy all their showoff which is essential to the vietnamese, to get bling bling. A real robbery.

  • Ronan

    What we also have to remember about vietnam is that its really not very bright people that got to power and it still goes on like that, it was soldiers that was farmers that because they won the war got in power. So you basically got farmers running alot of the country, the top leadership no, but all down the massive communist-inspired apparat have absolutely no clue about anything and have absolutely no clue about the outside world.

    For theese people vietnam is the center of the universe, laws are made to be able to skim money out of people, thats really the concept. Police are not doing anything at all expect getting bribes, its a highly criminal and ineffecient rulership.

  • Tevan

    After this ban becomes truth, Vietnamese fans of smartphone chat apps will be forced to use KakaoTalk (or Nimbuzz?).

  • Lucas

    The economics isn’t beneficial even short term. The infrastructure required to send SMS is more expensive than sending data anyway (in this test):

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