The segment of smartphones priced below 200 USD (5 million VND) accounted for about 51% of total industry revenue in Q3/2024, the highest since Q1/2022. This result was significantly impacted by the recent plan to shut down 2G networks.
In the preparation phase for the 2G shutdown, the government and Vietnamese network operators have implemented several measures to encourage users to switch to 4G-compatible devices. Some network operators even covered the cost of device upgrades for subscribers who committed to using long-term 4G plans and offered free 4G phones to customers who could not afford new phones.
For example, Viettel has supported many customers in purchasing 4G smartphones at a 50% discount, with discounts of up to 1.1 million VND. Viettel Telecom has established 10,000 service points nationwide to support device upgrades and cooperated with mobile phone retailers to offer affordable phone exchange programs. This network operator reportedly spent about 300 billion VND to provide 4G phones to 700,000 2G subscribers.
One of the largest retailers, The Gioi Di Dong, has also encouraged customers to bring in their old 2G phones and exchange them for a 4G SIM voucher worth 480,000 VND (19 USD). FPT Shop has also introduced a program to exchange old 2G devices for new 4G ones with gift vouchers worth up to 600,000 VND (24 USD).
According to experts, from a commercial perspective, the device upgrade program provides an opportunity for the smartphone market to boost sales while helping mobile retailers clear inventory of 4G smartphones and older 4G phone models.
Source: Vietnam Handset Market Tracker, 2024.
In addition, the 2G shutdown also brought significant benefits to Vietnamese network operators, as the number of users switching from 2G to 4G has helped improve the average revenue per user of network operators. Accordingly, in Q3/2024, Viettel Group reported a pre-tax profit of more than 6,037 billion VND (about 250 million USD), a 162% increase compared to the same period last year. Leading smartphone retailers such as The Gioi Di Dong and CellphoneS also reported quarterly growth of 30%-40% in sales of budget smartphones at some stores.
Source: Vietnam Handset Market Tracker, 2024.
In the smartphone market, the segment of smartphones priced under 200 USD saw a 38% growth in Q3 this year compared to the same period last year. However, 66% of Android smartphones sold for 4G internet upgrades in Q3 were not 5G phones.
In the under 5 million VND price range, Xiaomi held the largest market share at 27%, with the 2 best-selling products being the Redmi 13 and Redmi 14C. OPPO also recorded significant revenue growth in this price segment in the last quarter, with a 96% increase compared to the same period last year, driven by OPPO A3x.
The 2G shutdown is a major milestone for Vietnam’s digital ecosystem, a stepping stone for citizens and enterprises to join the 5G ecosystem. CounterPoint predicts that the market share of 4G smartphones in Vietnam will remain high in the coming months.
