Some of Vietnam’s biggest pay-TV networks have renewed calls for price controls to keep commoditization at bay, in the face of increasing rivalry between traditional as well as online platforms.

Speaking at an industry event held in Hanoi, the nation’s capital, senior executives from VTVcab, Vietnam’s largest MSO, and MyTV, the country’s biggest IPTV network, voiced support for proposed minimum prices on both analog and digital platforms, currently being drafted by local industry body, the Vietnam Pay-TV Association.

More than 90% of subscribers on cable, Vietnam’s dominant pay-TV platform, are still on analog networks focused on basic services, highlighting the need for greater investment.

“By having digital technology, we can increase the Arpu,” said VTVcab’s deputy general director Bui Huy Nam, speaking earlier this month at Vietnam in View, a conference organized by regional trade association, Casbaa.

“It is very encouraging for us that the Vietnam Pay-TV Association will submit a list of floor costs to the Ministry of Information and Communications,” Nam added.

“Internationally, there is an upward trend in pay-TV fees. For VTVcab, we definitely need to shift to digital technology.”

Low Arpu, Low Penetration

Arpus in Vietnam, where just over a quarter of TV homes subscribe to pay-TV, are less than US$5 a month, among the lowest in Asia, leaving little money to spend on improving content and infrastructure.

Pushing up prices, however, is tough.

Premium content is scarce, due to constraints on foreign channels (limited to 40 at present) and a relatively young local production sector.

At the same time, incumbents are contending with new rivals.

Online video platforms offering free and paid services are gaining ground, often on the back of pirated content.

Meanwhile, Vietnam’s three biggest telcos – VNPT, Viettel and FPT – were awarded cable licences last year. Viettel is notably active, pushing forward with a service targeting under-penetrated areas outside major cities.

Fears of a price war are widespread.

“We support setting a floor price for the pay-TV market in Vietnam,” said Nguyen Van Tan, vice director of MyTV’s owner, VASC Software and Media.

“I hope consumers can be sympathetic with pay-TV companies,” Tan added, speaking at the same conference.

“They have to pay a lot of money for content development and network development. We need to pay more attention to making the service more enjoyable for our customers.”

A Harder Climb

The days of easy subscriber growth are drawing to a close in Vietnam, with pay-TV nearing saturation in the country's biggest urban centers, Ho Chi Minh City and Hanoi.

Most of the population lives elsehwere however, in smaller towns and the countryside. A tougher road lies ahead, even if the government accepts the need to regulate consumer pricing.

Heightened competition has triggered a wave of cable consolidation in recent years, led by the two biggest players, VTVcab and SCTV.

At the end of last year, VTVcab had 1.8 million subs while SCTV had 1.7 million subs, according to industry analysts Media Partners Asia.

Other networks are finding it harder to expand, however. Subscriber growth for Ho Chi Minh City-based cable system HTV-TMS has flattened out at about 700,000 subs, noted general director, Nguyen Duc Hoa.

“Pay-TV companies like us need to be supported further, so that we can better develop,” he said.

“For example, we have been given the license to provide services for 29 cities and provinces by the Ministry of Information and Communications, but it is not easy for us to set up a network without approval from the local city or provincial government.”

Sharing policies for digital infrastructure introduced in Ho Chi Minh City to accelerate industry development should be adopted elsewhere, Hoa suggested.

“This is a chance for SME and new companies to develop and to create equality between different players so we can have a lower cost for users and facilitate wider coverage of services,” he said.

Content Crunch

Meanwhile, content shortfalls are not going to be resolved overnight, making it harder for operators to differentiate themselves in the foreseeable future.

DTH operator VSTV was one of the first to offer different channel packs in Vietnam, including a premium tier using exclusive football rights, when it launched its K+ service four years ago.

Building on this base hasn’t been easy.

“K+ is known for exclusive rights on football – mainly EPL but also on La Liga, Serie A – which is key for us, but it is difficult to invest in specific content to make a difference without higher Arpu,” said VSTV’s deputy general director, Jacques-Aymar de Roquefeuil.

“We also want to invest in local content, not only foreign content. We want to be more present in local sports, local series, local cinema,” he added.

“To do that, we need to have higher revenue.”