To speed up the national TV digitalization program, state agencies are considering lowering import tariffs on parts and accessories and applying technical barriers against low-quality Chinese imports.

The national TV digitalization plan by 2020 is expected to create a vast set top box (STB) market for high-tech manufacturers to exploit.

There are over 20 million households (out of a total population of nearly 90 million) in Viet Nam, mostly in rural areas.

Pay-TV remains unpopular with most Vietnamese, with only six million households subscribing to pay-TV, while the other 14 million households still watch broadcast TV.

These are the potential clients for STB manufacturers.

Seven Vietnamese enterprises have said they can manufacture and provide DVB-T2 STBs to serve the national TV digitalization program.

However, they have not kicked off production plans because they fear their products will not sell.

Tran Nam Trung, director of VTV Broadcom, said that Vietnamese-made products would be less competitive if compared with Chinese imports, if the government does not impose technical barriers to prevent low-quality products.

VTV Broadcom has launched an STB model into the market – VTV HD/T2. However, Trung said, with the selling price of VND700,000, the product is not competitive in price, compared to Chinese imports that sell for VND500,000-600,000.

Some question the quality of the Chinese products, which are not evaluated by Viet Nam’s quality assurance agencies.

Also, according to Trung, the biggest problem now is an unreasonable tax policy.

All the parts and accessories needed to make an STB have to pay an import tax. Meanwhile, the complete-built-unit (CBU) STBs are taxed zero percent.

The current tax policy makes CBU imports cheaper than domestically made products.

Meanwhile, imports are even cheaper if the importers are able to evade the 10 percent VAT when bringing products to Viet Nam through unofficial channels.

In this situation, VTV Broadcom has to make products under the mode of OEM (original equipment manufacturer), i.e., VTV Broadcom designs products and then outsources to an electronic enterprise in Taiwan.

VTC, the first terrestrial TV digital-service provider in Viet Nam, once set up an STB production line to make STBs to sell to its TV subscribers. But it stopped making these products because it could not compete with Chinese products smuggled over the border.

Hoang Le Son, director of VTC Digital, also said VTC was concerned about the unreasonable tax policy.
Trung of VTV Broadcom said the company’s STB products are now being assembled in Taiwan. However, in the future, the assembling will be carried out in Viet Nam.

In the past, Viet Nam relied on part supplies from China. However, things are different now. Since multi-national groups such as Samsung and Foxconn have set up factories in Viet Nam, they have brought with them many manufacturers of accessories.

The presence of the accessories manufacturers in Viet Nam allows Vietnamese enterprises to make electronic products that are of a higher quality than Chinese-made items.