Vietnam Online
One year ago, a Vietnam Data Control (VDC) executive told The VBJ that
"access to the Internet should be available in Vietnam by September
1996." At that time, VDC's parent organization, the state telecommunications
monopoly Vietnam Post and Telecommunications, had just won a battle over
Internet administration with the Ministry of Science, Technology and
Environment (MOSTE), which had argued that VNPT's control over the Internet
was inappropriate because the system was rooted in technology and not
telecommunications.
Well, here we are a year later (at press time) and access to the Internet is
still not legally available to the public. But this time the exec put his
money where his mouth is, saying he'd hand over the keys to his brand-new
motorbike if the public does not have access to the Internet by the end of
this September. With VDC in full control of the gateway now, following a
surprisingly frisky melee involving state-owned and private start-ups, and
with instructions from a powerful government Internet committee to proceed,
the odds are stacked in his favor.
The year-long process which led to his confidence seems to have focused more
on jumping political hurdles rather than technological ones, which remain.
Since 1992, a number of organizations set up variations of electronic
communication systems partly to prepare for the introduction of Internet
access. The first was Hanoi's Institute of Information and Technology, aided
by Australia National University.
That organization established a university-oriented data communications hub
called VARENET, which includes an E-mail bulletin board, Netnam, the most
well-known of Vietnam's six or more fledgling companies that dared to stake
out Internet territory before it had been mapped. In 1994, that group even
had the foresight to register the essential domain name "Vietnam" with
global internet authorities in the U.S. and Japan. VARENET received funding
from NGOs, its university, and some 2,000 subscribers who pay about $25 per
month for the E-mail service.
At about the same time, home-grown companies in Hanoi and HCMC, sensing a
new and glamorous industry, decided to establish data services of their own.
Today, computer-users with modems and an extra $20 or $30 dollars each month
can choose from numerous "Intra-net" services including: Vitranet, which
provides business information and E-mail services; Vinet, which provides
information from the General Department of Statistics and elsewhere;
Vietnet, which provides news and databases of domestic business information;
and VN-Mail, the predecessor to the first Internet Access Provider (IAP) and
Internet Service Provider (ISP). The FPT also provides an information
service called Vietnam Wisdom. All are dial-up, whereby the user accesses
the service by calling that Intranet server, and E-mails sent over phone
lines to Netnam, which forwards them several times per day via ANU's
Internet links. The exception is VN-Mail, which sends E-mails directly onto
the Internet.
Winning the privilege of becoming an IAP or ISP, both potentially profitable
businesses, was the initial goal of all the companies. However, with
Internet access prohibited, Intranet, a closed dial-up network, seemed a
logical way to introduce the idea of the Internet to the general public, as
well as a way to build a foundation on which these firms could prove their
technical abilities, thereby improving their chances of becoming actual IAPs
or ISPs.
In the meantime, VNPT purchased and had installed a $26 million "access net"
data network from telecom firm GlobalOne. The network, which is routed in
HCMC and Hanoi, could connect VDC directly with the Internet at 256 kilobits
(per second) and enable about 100 simultaneous Internet connections,
according to one Hanoian data manager.
Yet purchasing that system was but a slice of the challenge of introducing
the Internet-the world's cheapest and most abundant source of information
and communication-to a country served only strictly censored material. Some
government officials adamantly opposed the idea of the Internet,
particularly after Prime Minister Vo Van Kiet's E-mail address was flooded
by correspondence from disgruntled Viet Kieu in 1995.
But government interest has grown as fledgling would-be access and service
providers, along with foreign technology sellers, push to establish the
industry. Partly to resolve the struggle between MOSTE and VNPT, an Internet
committee was formed late last year. The committe is overseen by MOSTE and
includes officials from the ministries of Culture and Information, Interior,
Politburo, and the Prime Minister's office, as well as other advisors. In
March the PM also issued "temporary regulations on state control over
Internet gateways, services, and information." In addtion, the Politburo
issued a separate directive requiring relevant Party elements to "constantly
check and control the use of the Internet."
The directive warned that "some may use the Internet to transmit false
reports, propaganda, and stolen national security information," and to
propagate "unhealthy lifestyles and cultural values."
To block such material VDC selected and installed a fire-wall, or
information filter program, called Eagle, from a U.S. software-maker Raptor.
Eagle is able to block access to selected addresses.
Yet concern over controlling content is not VNPT's primary motivation to be
in total control of access. Would-be competitors-most politically powerful
in their own rights-argue convincingly that potential profit created the
current situation, just as VDC was created two years ago to fill the niche
that Netnam had been aiming for. Two other Internet access providers were
named also, a military telecom company and Saigon Postel, partly owned by
VNPT, but neither are established yet. VDC's performance will be scrutinized
for six months by the Internet committee, said a source close to the issue.
Would-be users will also be scrutinizing performance of VDC. The E-mail
system it has offered for the past year is costly and considered unreliable.
customer service and English skills (the language of most Internet software
and manuals) are low, and foreign operators are prohibited. Several firms
which had hoped to compete in this field indicated to The VBJ if VDC is
unable to competently promote Internet services and meet customer needs, the
industry could fizzle before they are allowed to enter it.
Their only strategies now are to provide related or ancillary services. "We
provide standard Internet services without Internet," explains Mr. Pham Thuc
Truong Luong, an engineer with BaTin's Intranet. That includes publications,
web browsers, databases, and other features accessible through dial-up.
"In the near future some Intranet providers will soon be ISPs," Luong said.
"We would be able to offer Internet services to providers. The others will
have two choices: remain Intranet or become ICPs [Internet content
providers]." The second activity would require licensing.
Neither activities promise to be largely profitable: Internet customers in
other regional countries tend to want to pay only a single monthly bill that
costs less than $30 total, and there are currently no more than 10,000
potential customers in Vietnam, according to industry members who mainly
target businesses and organizations. Instead, they hope that VDC will opt
out of providing service and instead remain the sole IAP, linking domestic
service providers with the Internet and charging about $15,000 per month for
renting a fixed line.
Already awarded a slot to provide service is VARENET, which only two years
ago nearly was muscled out of existence. How did they win this slot?
According to sources involved with the Internet committee, it was part of a
deal between VARENET and DGPT which granted the latter, Vietnam's telecom
regulator, the necessary right to use "Vietnam" as its domestic domain name,
beginning this September.
Internet access seems poised to become commercially available in Vietnam.
Soon the firms hubbed around this mysterious industry will become familiar
with the market demand for it. One Hanoi entrepreneur said he wished it had
taken place in the opposite order.
"It's like the hotel business. You might have a license, but you can't
forget about your goal, a few thousand happy customers."
by JOSHUA JAKE LEVINE - Vietnam Business Journal 9/1997
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