ABSTRACT
Vietnam’s telecommunications industry offers a dynamic case study of rapid technology adoption, growth, and industrial transformation while largely under state control. The rent-management analyses offered in three case studies identify a number of growth-enhancing factors. First, the government was determined to upgrade Vietnam’s telecom infrastructure, deeming it necessary for industrialization and promulgating appropriate policies to support the industry. Second, the case study of Viettel Group highlights the role of informality in rent creation and allocation that allowed for productive utilization of rents in the rapid installation of telecom infrastructure and technology transfers. Third, while competition among major state-owned conglomerates by itself did not help operators overcome market failures, especially in the early stage of the industry’s development, it was value enhancing in creating credible pressure for operators to rapidly learn new technology and upgrade services. Finally, the government’s gradual approach in opening the telecom market to foreign investors provided an effective time horizon for the state-owned providers to concentrate on developing their infrastructure and services while the Vietnamese market was relatively free from foreign competition.
