Vietnam is expected to attract more foreign investment for information and communication technology (ICT) projects, but whether they can turn a profit within a reasonable amount of time is uncertain, according to participants at a recent conference.
"Money is not a problem for investors. The most important thing is to persuade investors that ICT projects in Vietnam will make a profit," Miguel Pardo de Zela, the US Embassy's Commercial Counsellor, said yesterday during the Vietnam ICT Outlook 2007 (VIO) conference in HCM City.
Investors will often pour $20-100mil into a fund within five years with an expected profit of 30%.
"Investors will consider whether they will earn a profit and whether they can take out all of their profits," Pardo de Zela said.
He said if Vietnam's ICT projects caught up with global trends they would earn huge profits.
"Telecommunications with mobile devices, digital data centres, and electronic transactions are the future of the ICT industry," he added.
Services that would be useful for Vietnamese ICT businesses to consider would be customer care centres, medical data management, financial and account services, and digital services for media, as well as map information systems, personnel management, and electronic training and research.
"Along with a well-prepared development plan, Vietnamese enterprises should invest in good human resources and co-operate with an investor that deeply understands what you will do," Pardo de Zeia said.
"Don't forget about the risk factor. It's a part of project and business people should have plans to reduce its impact."
The first fund for technology investment in Vietnam, the US-based IDG Ventures Vietnam, is expected to contribute to IT growth.
Nguyen Hong Truong, director of IDG's Business & Technology Development, said more investment would flow to Vietnam's ICT sector.
Vietnam, according to a recent survey, is the "most optimistic" country in Asia. Seventy per cent of the population is under 35 years old and 47mil are of working age. The literacy rate is very high, at 94%, and English is becoming more and more popular.
The country has a large and fast growing consumer population with consumer spending growth of 8.4% last year, and a high, steady GDP growth of around 7.5-8%.
"Vietnam has been drawing increasing attention, due in part to its recent entrance to the WTO and improved conditions for private equity investors. The level of foreign direct investment and capital market have rapidly grown," Truong said.
In addition, the high rate of technology use, including mobile phones and the internet, with around 15mil users for each, is another attraction for the fund.
Next week, the fund will announce its investment in Focus Media for its new style of ads via TV screens in public places.
At the conference, the director of the Ministry of Science and Technology's IT centre, Mai Anh said that the Government had played a key role in ICT development and application.
"The government has strongly supported ICT development for more than 10 years," Mai Anh said. "However, ICT application in government agencies is slow and ineffective."
"All sectors are mutually interdependent. Information sharing between State agencies is critical. Therefore, a national programme for E-government is very important in the flat world of today," he added.
Source: VNE
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