The World: Insider's view - Vietnam

The Vietnamese government has embraced the growth in popularity of pay-TV among the country's younger population, Simon Twiston Davies reports.

The pay-TV industry in Vietnam has flourished of late, especially in the commercial capital Ho Chi Minh City, but also in the political centre, Hanoi.

Indeed, pay-TV is one of the nation's fastest-growing business sectors. The number of households subscribing to cable and satellite TV services in Vietnam is forecast to rise from 1.76 million this year to 2.65 million next year.

This creates a win-win situation for TV advertising. Adspend on TV in Vietnam approached $300 million in 2006, with 10 per cent of this figure going to pay-TV.

The disposable income among Vietnamese consumers is increasing. The country's population is young, with 30 per cent under the age of 30, and consumer spending, particularly on technology goods such as PCs, mobile phones and digital TVs, rising sharply.

Vietnam's economy has been expanding rapidly in recent years. Forecast economic growth of 7 per cent annually is expected to raise per capita income from $2,700 in 2005 to more than $4,000 by 2009.

Younger and more urban consumers have more desire for international contact and content. They are willing to spend extra money to subscribe to different kinds of media, especially pay-TV services.

The Vietnamese government has been investing in the sector, founded on the understanding that greater information flows between itself and other countries is inevitable, and that this will benefit the economy and social development.

Like many emerging markets, one of the biggest challenges to the pay-TV sector is the protection of intellectual property rights. Misappropriation and outright theft of programming, both domestic and foreign, are common.

With approximately one million legitimate subscribers to pay-TV services across the country, Vietnam also has more than 2.5 million unauthorised pay-TV subscribers to pirate cable, satellite and digital terrestrial channels in Ho Chi Minh City, Hanoi, Danang and the other fast-developing cities.

The encouraging development is that the government has recognised the importance of establishing a transparent industry structure to protect content, combat piracy and build a sustainable domestic market. For instance, it has acceded to the WIPO Brussels Convention on satellite broadcasting and brought an intellectual property law into effect. The law gives specific rights to broadcasters, yet it is not clear how it will operate in practice.

Vietnam's accession to the World Trade Organisation is expected to give economic development a further boost and encourage foreign investment.

To drive the development of pay-TV, the government must reinforce its regulations to create a transparent and competitive environment and ensure its future.

- Simon Twiston Davies is the chief executive of the Cable & Satellite Broadcasting Association of Asia.