How Vietnam Reached Mobile Penetration of 140%

Many people claim that the huge changes that have been attributed to computers in higher income countries will only be recorded in lower income countries through mobile telephony. The main argument being that the infrastructure required to utilize the mobile telephone is developed by the network operators and often through private developers. Evidence that supports this is that many low income countries have a quantum of mobile telephones that far exceeds the penetration rate of computers hence the mobile telephone is the development tool of our time.  For many developing countries, it is often stated as a matter of pride that the penetration rates of mobile telephony has gone beyond 50% and that this is  rare and important technological feat. 

Looking that this edition of the GSM Association's newsletter, I was amazed that Vietnam has a mobile penetration rate of 140%. In spite of Vietnam's really furious pace of economic growth over the last decade, this number is still worthy of understanding especially since the profile of countries with perfect penetration at 100% is very different. To start with, they tend to be small Baltic states and northern European nations where technology development is clearly ahead. 

Like other developing nations, the high rates of mobile telephone penetration in Vietnam and other countries reflects different circumstances. Among these are that many of these countries have corporations that are uninterested in interconnection hence the tariff across networks exceeds that within networks. The clever response from users is therefore to hold multiple SIM cards in order to communicate in the cheapest way. This is confirmed by the view that a number of callers have as much as three separate numbers. Secondly, the absence of number portability means that many of the mobile telephone users are unwilling to change their numbers by migrating to another network. In some instances, reactivation of lost SIM Cards is more onerous than simply acquiring a new one and so the subscriber base is smaller than the total number of SIM cards in issue.     

Registration of Sim card ownership is ongoing in many jurisdictions including Kenya, India and other countries but Vietnam seems to be trying to limit ownership to three. It is not clear to me what this will achieve as the acquisition of SIM cards by itself does not harm to the networks or subscriber. However, the government of Vietnam, which has a hand in all the mobile networks seems to think that Sim Card ownership ought to be rationed.