Developing banking services to support small and medium enterprises in Vietnam - 16

CHAPTER 3: SOLUTIONS TO DEVELOP BANKING SERVICES TO SUPPORT SMALL AND MEDIUM ENTERPRISES IN VIETNAM

3.1. SOLUTIONS TO DEVELOP BANKING SERVICES TO SUPPORT SMALL AND MEDIUM ENTERPRISES IN VIETNAM: ORIENTATION AND ANALYTICAL MODEL

3.1.1. Orientation and development plan for small and medium enterprises in Vietnam

In developed countries such as the United States, Japan, England, Germany, etc. with many large, world-famous economic groups, the governments of these countries also identify the important, long-term role of SMEs in the economy because this is an indispensable component of the economy. SMEs have an inseparable mutual relationship with economic groups, especially in creating supporting industries and product distribution networks. With high dynamism, SMEs are also a place for entrepreneurs to start a business and an environment to create connections and accumulate capital to gradually form and develop large enterprises.

In fact, in economies, especially in newly developed economies, large enterprises or even multinational corporations were formed from SMEs 30 or 40 years ago. However, with the common characteristics of SMEs, especially in the early stages of formation and development (lack of capital capacity, technology and limited management skills), economies all identify the Government's support for SMEs as a long-term policy, not a temporary one.

Currently, Vietnam is in the process of high integration into the world economy, requiring the need to know how to take advantage of comparative advantages for integration, and SMEs are an opportunity to make good use of these advantages. Therefore, developing SMEs strongly and in the right direction will contribute to speeding up this process.

The SME development plan for the 2006-2010 period in our country, if well implemented, will contribute significantly to the successful implementation of the country's socio-economic development plan during this period.

BASIS AND BASE FOR BUILDING THE SME DEVELOPMENT PLAN FOR THE 2006-2010 PERIOD:

1. The socio-economic development strategy for the 2006-2010 period was approved by the 9th National Party Congress.

2. Comprehensive strategy for growth and poverty reduction.

3. Resolution 13-NQ/TW dated March 18, 2001 on reorganizing, innovating and improving the operational efficiency of state-owned enterprises.

4. Resolution 14-NQ/TW dated March 18, 2002, 5th Conference of the Party Central Committee (9th tenure), dated March 18, 2002 on continuing to innovate mechanisms and policies, encouraging and creating conditions for private economic development.

5. Resolution of the 9th Central Committee, Session III, on strengthening, developing and improving the operational efficiency of the Collective Economy.

6. Decree 90/2001/ND-CP dated November 23, 2001 of the Government on supporting the development of small and medium enterprises.

7. Decision 94/2002/QD-CP dated July 17, 2002 of the Prime Minister on private economic development.

8. Directive 33/2004/CT-TTg of the Prime Minister on the development of the 5-year plan 2006-2010.

9. Notice No. 7681/BKH-TB dated November 30, 2004 of the Ministry of Planning and Investment guiding the development of the 5-year socio-economic development plan 2006-2010.

10. Commitments and agreements of the Vietnamese Government in the process of international and regional economic integration, bilateral and multilateral agreements that Vietnam participates in, with donors...

11. Practices in developing SME development plans in some countries.

The SME Development Plan for the 2006-2010 period was specified in Decision 236/2006/QD-TTg dated October 23, 2006. Decision 236 clearly stated the guiding viewpoint on the development of SMEs in our country, specifically:

 Consistently implement the policy of developing a multi-sector economy. Economic sectors that do business according to the law are all important components.

The importance of a socialist-oriented market economy, long-term development, cooperation and healthy competition.

 The State creates a legal environment and favorable mechanisms and policies for Vietnamese SMEs of all economic sectors to develop equally and compete healthily in order to mobilize all domestic resources in combination with external resources for investment and development.

 Developing SMEs in a positive and stable manner, improving quality, developing in quantity, achieving economic efficiency, contributing to creating more jobs, eliminating hunger, reducing poverty, ensuring social order and safety; developing SMEs in association with national goals, socio-economic development goals suitable to the conditions of each region and locality, encouraging the development of rural industry and traditional craft villages; focusing on developing SMEs in remote areas, areas with difficult socio-economic conditions; prioritizing the development and support of SMEs owned by ethnic minorities, women, people with disabilities, etc.; focusing on developing SMEs to invest in production in a number of highly competitive fields.

 State support activities gradually shift from direct support to indirect support to improve the capacity of SMEs.

 Link business activities with environmental protection, ensuring social order and safety.

 Strengthening awareness of authorities at all levels about the position and role of SMEs in socio-economic development.

In addition, Decision 236 also shows the following general objectives:

“Accelerating the development of Vietnamese SMEs, creating a healthy competitive environment, enhancing national competitiveness, Vietnamese SMEs increasingly contribute to economic growth”.

Specific quantitative objectives include:

 The number of newly established SMEs is about 320,000 (annually increasing by about 22%);

 The growth rate of newly established SMEs in disadvantaged provinces is 15% by 2010.

 The rate of direct participation in export reaches 3-6% of the total number of SMEs.

 Create about 2.7 million new jobs in the period 2006-2010

 There are 165,000 more technically trained workers working in SMEs. Orientation and indicators in the development plan of Vietnamese SMEs

In the coming period, the importance and position of Vietnamese SMEs in the Vietnamese economy will be further affirmed. This requires an appropriate action plan to create conditions for the strong development of these enterprises.

3.1.2. Orientation for developing banking services to support small and medium enterprises in Vietnam

The system of banking services supporting SMEs must aim to help SMEs develop and develop sustainably. These services must be built on a foundation of synchronous legal regulations, in which the Law on Credit Institutions is key, but synchronization of related legal regulations also plays an important role.

First of all, commercial banks improve business efficiency through the application of modern, advanced management systems and new technologies to provide services to SMEs at reasonable costs. Each commercial bank will have different customer strategies with different proportions of SMEs. Some banks may maintain a strategy of focusing most of their resources on serving large enterprises. However, it is easy to see that with the large number of SMEs on the rise today, most domestic commercial banks will consider SMEs as important service objects. Even though foreign banks currently do not consider serving SMEs as a top priority, in the coming time, these banks will certainly choose for themselves a group of customers who are reputable SMEs, doing business effectively and bringing high profits to the bank.

Providing standardized services with clear and simple procedures will be an urgent goal for banks in competing with each other to serve SMEs. In addition, there will be a trend for commercial banks to provide “service packages” or sets of solutions for SMEs. Microcredit with simple procedures will be one of the attractive services for SMEs. Successful economies in providing banking services to SMEs always provide microcredit programs for SMEs with standardized and simplified procedures to the maximum extent possible.

Risk management from both the bank and SME perspective will play a key role in the future. If only one side manages risks well, it will be difficult to provide services to SMEs (for example, banks cannot appraise loans or SMEs do not fully account for risks in investment projects applying for loans) or at least entail high service costs that SMEs with limited financial resources will find difficult to access.

For SMEs, corporate governance in general and financial governance in particular will be the basis for businesses to develop as well as access and use banking services effectively. If businesses do not have a transparent financial reporting system according to standards, they themselves cannot manage their businesses well as well as access capital and attract investment.

On the part of State management agencies, in addition to building a general legal system in compliance with Vietnam's international commitments, building a system of accounting standards and financial reporting suitable to the characteristics of Vietnamese SMEs will contribute significantly to helping these enterprises improve their competitiveness, access to financial resources and development.

3.1.3. Analysis model and solution orientation for developing banking services to support small and medium enterprises

Based on the above assessment and comments, together with the context of Vietnam becoming the 150th official member of the WTO, we can propose specific direct and indirect solutions (in the form of recommendations) suitable for

conditions and development level of our country as well as the formation process and development characteristics of Vietnamese SMEs.

The conclusion of the entire thesis will group the solutions in order of priority and importance to facilitate the implementation of these solutions in practice. The model below will assist in the process of analysis, evaluation and solution formulation (Table 3.2.).

Vietnam's deep integration into the world economy has created opportunities and challenges in providing banking services in general and banking services for SMEs in particular. If we consider it at the national level, integration is the process of opening the market according to the committed roadmap through which banks can access external resources, including financial resources, management experience, advanced technology in the banking sector, etc. The opening of the market itself also creates fierce competition between existing service providers as well as competition with new banks whose numbers are increasing rapidly.

An important point of the analysis model (Table 3.2) is that along with Vietnam's integration process, all four basic elements in the model, namely banks, SMEs, the system of management agencies and the legal environment as well as the system of agencies and organizations supporting SMEs, are also strongly affected and influenced. The change is reflected in both qualitative and quantitative aspects . Previously, individual programs and solutions were often proposed with the participation of one or several basic elements (among the four basic elements above), so it is easy to see that it is difficult to replicate these solutions on a large scale because these programs do not create synchronization in all four basic elements above.

Not only for banks, opening up and competition in the integration process also strongly impacts Vietnamese SMEs. With modest scale, resources and low technology level, the pressure of competition on Vietnamese SMEs is increasing rapidly. The urgent requirement is that SMEs must quickly

and proactively improve their competitiveness. This leads to increased demand for banking services in general and access to capital sources in particular.

Industry associations and SME support organizations themselves have and will continue to make adjustments to their operations to better and more effectively support SMEs. This process begins with identifying the problems, practical needs and challenges of SMEs in the integration process, on that basis building their capacity to provide timely and effective support activities. In addition, with their gathering and representative functions, these organizations will present recommendations from SMEs to management agencies at all levels to help develop development strategies, mechanisms, policies and legal regulations to help SMEs develop and develop sustainably.

The system of State management agencies and legal regulations have been and are being adjusted to comply with Vietnam's commitments in the WTO. Thus, regulations in the banking sector and regulations governing the operations of enterprises in general and SMEs in particular have also been adjusted and amended.

Banking services

Table 3.1. Circular relationship in improving competitiveness and access to banking services of small and medium enterprises

Survival and development of Vietnamese SMEs

Banking services

Improve competitiveness

of SMEs

For banks, regulations on increasing charter capital, complying with regulations on risk management, internal governance, etc. are both challenges for banks but also opportunities for banks to offer quality products and services.

quality. Thus, for SMEs as users of banking services, the essence of the problem is how to improve competitiveness through access and effective use of resources (including banking services). Table 3.1 shows the circular relationship in improving competitiveness and access to banking services of SMEs.

Table 3.2. Analysis model and solution orientation for developing banking services for small and medium enterprises

Industry associations, support organizations and other related organizations

 Represent the common voice of Vietnamese SMEs

 Provide training services and support business development

 Provide information on the production and business situation of Vietnamese SMEs.

Bank  Financial capacity  Management capacity  Human resources  Service delivery network system  Application of advanced banking technology  Risk management capacity  Diversify services  Ability to provide services at competitive rates  Level of understanding and information about the characteristics and operations of SMEs	DNVVN  Limited scale and resources  Lack of understanding of banking services - facilities and related procedures and regulations  Limited capacity to develop investment projects and business plans  Lack of collateral when accessing credit  Limited risk management capacity  The financial-accounting system is still inadequate, lacking reliable financial reports.
Legal environment and system of management agenciesin banking services  Implement WTO integration commitments  Comply with domestic laws and regulations  Consistency of laws and legal regulations related to access to banking services of SMEs  Capacity of management agencies in developing legal documents and monitoring the implementation of regulations

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• Pre-tax Profit of Bidv Tien Giang in the Period 2011-2015 zt2i3t4l5ee zt2a3gsnon-credit services, joint stock commercial bank zt2a3ge zc2o3n4t5e6n7ts At that time, the Branch had to set aside a provision for credit risks, which reduced the Branch's income. Chart 2.2. Pre-tax profit of BIDV Tien Giang in the period 2011-2015 Unit: Billion VND 140 120 100 80 60 40 20 0 63.3 80.34 89.29 110.08 131.99 2011 2012 2013 2014 2015 Profit before tax (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) However, through chart 2.2, it can be seen that BIDV Tien Giang's profit is still increasing continuously, and its operating efficiency is currently leaking. This is a contribution of non-credit services, and this service segment will be increasingly focused on growth by BIDV Tien Giang to ensure the highest profit safety because credit activities have many potential risks. At the same time, focusing on developing non-credit services is consistent with one of the contents of restructuring the financial activities of credit institutions in the project "Restructuring the system of credit institutions in the period 2011-2015" approved by the Prime Minister in Decision No. 254/QD-TTg dated March 1, 2012 [14]: "Gradually shifting the business model of commercial banks towards reducing dependence on credit activities and increasing income from non-credit services". 2.2. Current status of non-credit service development at BIDV Tien Giang. 2.2.1. BIDV Tien Giang has deployed the development of non-credit services in recent times. Along with the development of the Head Office, BIDV Tien Giang's products and services are constantly improved and deployed in a diverse manner to ensure provision for many different customer groups in the area: individual customers, corporate customers, and financial institutions. Typical services are as follows: Payment services, treasury services, guarantee services, card services, trade finance, other services: Western Union, insurance commissions, consulting services, foreign exchange derivatives trading, e-banking services,... 2.2.1.1. Payment services: In accordance with the Prime Minister's Project to promote non-cash payments in Vietnam [15], banks in Tien Giang province have continuously developed payment services to reduce customers' cash usage habits through card services and electronic banking services such as: salary payment through accounts, focusing on developing card acceptance points, developing multi-purpose cards, paying social insurance by transfer, paying bills through banks, etc. Chart 2.3. Net income from payment services in the period 2011-2015 Unit: Million VND 6000 5000 4000 3000 2000 1000 0 3922 4065 4720 5084 5324 2011 2012 2013 2014 2015 Net income from payment services (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) Along with the technological development of the entire system, BIDV Tien Giang has a payment system with a fairly stable transaction processing speed, bringing many conveniences to customers. The results of observing chart 2.3 show that the income from payment services that the Branch has achieved has grown over the years but the speed is not high and the products are not outstanding compared to other banks. Domestic payment products such as: Online bill payment, electricity bills, water bills, insurance premiums, cable TV bills, telecommunications fees, airline tickets, etc. bring many conveniences to customers. Regarding international payment, this is an indispensable activity for foreign economic activities, BIDV Tien Giang is providing international payment methods for small enterprises producing agriculture, aquatic food and seafood that have credit relationships with banks in industrial parks in Tien Giang province such as: money transfer, collection, L/C payment. 2.2.1.2. Treasury services: BIDV Tien Giang always focuses on ensuring treasury safety and currency security, always complies with legal regulations, and minimizes risks in operations such as: counting and collecting money from customers, receiving and delivering internal transactions, collecting from the State Bank (SBV) or other credit institutions, receiving ATM funds, bundling money, etc. BIDV Tien Giang's treasury service management department is always fully equipped with modern machinery and equipment such as: money transport vehicles, fire prevention tools, money counters, money detectors, magnifying glasses, etc. to ensure absolute safety in treasury operations, immediately identifying real and fake money and other risks that may affect people and assets of the bank and customers. In addition, implementing regulation 2480/QC dated October 28, 2008 between the State Bank of Tien Giang province and the Provincial Police on coordination in the fight against counterfeit money, in the 3-year review of implementation, BIDV Tien Giang discovered, seized and submitted to the State Bank of Tien Giang province 475 banknotes of various denominations and was commended by the Provincial Police and the State Bank of Tien Giang province [17]. Chart 2.4. Net income from treasury services in the period 2011-2015 Unit: Million VND 350 300 250 200 150 100 50 0 105 122 309 289 279 2011 2012 2013 2014 2015 Net income from treasury services (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) However, as shown in Figure 2.4, income from treasury operations is not high and fluctuates. Specifically, in the period 2011-2013, net income increased and increased most sharply in 2013, then in the period 2013-2015, there was a downward trend. This fluctuation is due to the fact that fees collected from treasury services are often very low and can even be waived to attract customers to use other services. 2.2.1.3. Guarantee and trade finance services: BIDV Tien Giang, thanks to the advantages of the province and the favorable location of the Branch, has continuously focused on developing income from guarantee services and trade finance. Chart 2.5. Net income from guarantee and trade finance services in the period 2011-2015 Unit: Million VND 14000 12000 10000 8000 6000 4000 2000 0 5193 5695 2742 3420 8889 3992 11604 12206 5143 5312 2011 2012 2013 2014 2015 Net income from guarantee services Net income from Trade Finance (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) Through chart 2.5, we can see that BIDV Tien Giang's income from guarantee services and trade finance has grown over the years. The reason is: Among BIDV Tien Giang's corporate customers, the construction industry is the industry with the highest proportion of customers after the trading industry, this is a group of customers with potential to develop guarantee services. The second group of customers is corporate customers in the fields of agricultural production, livestock and seafood processing with high import and export turnover in the area. are the target of trade finance development. In addition, BIDV Tien Giang also focuses on continuously developing these customer groups to increase revenue for many other products and services in the future. 2.2.1.4. Card and POS services: As a service that BIDV Tien Giang has recently developed strongly, it can be said that this is a very potential market and has the ability to develop even more strongly in the future. Card services with outstanding advantages such as fast payment time, wide payment range, quite safe, effective and suitable for the integration trend and the Project to promote non-cash payments in Vietnam. Cards have become a modern and popular payment tool. BIDV Tien Giang early identified that developing card services is to expand the market to people in society, create capital mobilized from card-opened accounts, contribute to diversifying banking activities, enhance the image of the bank, bring the BIDV Tien Giang brand to people as quickly and easily as possible. BIDV Tien Giang is currently providing card types such as: credit cards (BIDV MasterCard Platinum, BIDV Visa Gold Precious, BIDV Visa Manchester United, BIDV Visa Classic), international debit cards (BIDV Ready Card, BIDV Manu Debit Card), domestic debit cards (BIDV Harmony Card, BIDV eTrans Card, BIDV Moving Card, BIDV-Lingo Co-branded Card, BIDV-Co.opmart Co-branded Card). These cards can be paid via POS/EDC or on the ATM system. In addition, with debit cards, customers can not only withdraw money via ATMs but also perform utilities such as mobile top-up, online payment, money transfer,... through electronic banking services. In order to attract customers with card services, BIDV Tien Giang has continuously increased the installation of ATMs. As of December 31, 2015, BIDV Tien Giang has 23 ATMs combined with 7 ATMs in the same system of BIDV My Tho, so the number of ATMs is quite large, especially in the center of My Tho City, but is not yet fully present in the districts. Basic services on ATMs such as withdrawing money, checking balances, printing short statements,... BIDV ATMs accept cards from banks in the system. Banknetvn and Smartlink, cards branded by international card organizations Union Pay (CUP), VISA, MasterCard and cards of banks in the Asian Payment Network. From here, cardholders can make bill payments for themselves or others at ATMs, by simply entering the subscriber number or customer code, booking code that service providers notify and make bill payments. Chart 2.6. Net income from card services in the period 2011-2015 Unit: Million VND 3500 3000 2500 2000 1500 1000 500 0 687 1023 1547 2267 3104 2011 2012 2013 2014 2015 Net income from card services (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) Through chart 2.6, it can be seen that BIDV Tien Giang's card service income is constantly growing because the Branch focuses on developing businesses operating in industrial parks, which are the source of customers for salary payment products, ATMs, BSMS. Specifically, there are companies such as Freeview, Quang Viet, Dai Thanh, which are businesses with a large number of card openings at the Branch, contributing to the increase in card service fees [25]. Table 2.6. Number of ATMs and POS machines in 2015 of some banks in Tien Giang area. Unit: Machine STT Bank name Number of ATMs Cumulative number of ATM cards POS machine 1 BIDV Tien Giang 23 97,095 22 2 BIDV My Tho 7 21,325 0 3 Agribank Tien Giang 29 115,743 77 4 Vietinbank Tien Giang 16 100,052 54 5 Dong A Tien Giang 26 97,536 11 6 Sacombank Tien Giang 24 88,513 27 7 Vietcombank Tien Giang 15 61,607 96 8 Vietinbank - Tay Tien Giang Branch 6 46,042 38 (Source: 2015 Banking Activity Data Report of the General and Internal Control Department of the Provincial State Bank [21]) Through table 2.6, the author finds that the number of ATMs of BIDV Tien Giang is not much, ranking fourth after Agribank Tien Giang, Dong A Tien Giang, Sacombank Tien Giang. The number of POS machines of BIDV Tien Giang is very small, only higher than Dong A Tien Giang and BIDV My Tho in the initial stages of merging the BIDV system. Besides, BIDV Tien Giang has a high number of cards increasing over the years (table 2.7) but the cumulative number of cards issued up to December 31, 2015 is still relatively low compared to Agribank, Vietcombank, Dong A (table 2.6). div.maincontent .content_head3 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: bold; text-decoration: none; font-size: 14pt; } div.maincontent .p { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; margin:0pt; } div.maincontent p { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; margin:0pt; } div.maincontent .s1 { color: black; font-family:"Courier New", monospace; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; } div.maincontent .s2 { color: black; font-family:"Times New Roman", serif; font-style: italic; font-weight: normal; 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• Mobile Phone Usage in Hanoi Inner City Area zt2i3t4l5ee zt2a3gsconsumer,consumption,consumer behavior,marketing,mobile marketing zt2a3ge zc2o3n4t5e6n7ts - Test the relationship between demographic variables and consumer behavior for Mobile Marketing activities The analysis method used is the Chi-square test (χ2), with statistical hypotheses H0 and H1 and significance level α = 0.05. In case the P index (p-value) or Sig. index in SPSS has a value less than or equal to the significance level α, the hypothesis H0 is rejected and vice versa. With this testing procedure, the study can evaluate the difference in behavioral trends between demographic groups. CHAPTER 4 RESEARCH RESULTS During two months, 1,100 survey questionnaires were distributed to mobile phone users in the inner city of Hanoi using various methods such as direct interviews, sending via email or using questionnaires designed on the Internet. At the end of the survey, after checking and eliminating erroneous questionnaires, the study collected 858 complete questionnaires, equivalent to a rate of about 78%. In addition, the research subjects of the thesis are only people who are using mobile phones, so people who do not use mobile phones are not within the scope of the thesis, therefore, the questionnaires with the option of not using mobile phones were excluded from the scope of analysis. The number of suitable survey questionnaires included in the statistical analysis was 835. 4.1 Demographic characteristics of the sample The structure of the survey sample is divided and statistically analyzed according to criteria such as gender, age, occupation, education level and personal income. (Detailed statistical table in Appendix 6) - Gender structure: Of the 835 completed questionnaires, 49.8% of respondents were male, equivalent to 416 people, and 50.2% were female, equivalent to 419 people. The survey results of the study are completely consistent with the gender ratio in the population structure of Vietnam in general and Hanoi in particular (Male/Female: 49/51). - Age structure: 36.6% of respondents are <23 years old, equivalent to 306 people. People from 23-34 years old accounting for the highest proportion: 44.8% equivalent to 374 people, people aged 35-45 and >45 are 70 and 85 people equivalent to 8.4% and 10.2% respectively. Looking at the results of this survey, we can see that the young people - youth account for a large proportion of the total number of people participating in the survey. Meanwhile, the middle-aged people including two age groups of 35 - 45 and >45 have a low rate of participation in the survey. This is completely consistent with the reality when Mobile Marketing is identified as a Marketing service aimed at young people (people under 35 years old). - Structure by educational level: among 835 valid responses, 541 respondents had university degrees, accounting for the highest proportion of ~ 75%, 102 had secondary school degrees, ~ 13.1%, and 93 had post-graduate degrees, ~ 11.9%. - Occupational structure: office workers and civil servants are the group with the highest rate of participation with 39.4%, followed by students with 36.6%. Self-employed people account for 12%, retired housewives are 7.8% and other occupational groups account for 4.2%. The survey results show that the student group has the same rate as the group aged <23 at 36.6%. This shows the accuracy of the survey data. In addition, the survey results distributed by occupational criteria have a rate almost similar to the sample division rate in chapter 3. Therefore, it can be concluded that the survey data is suitable for use in analysis activities. - Income structure: the group with income from 3 to 5 million has the highest rate with 39% of the total number of respondents. This is consistent with the income structure of Hanoi people and corresponds to the average income of the group of civil servants and office workers. Those People with no income account for 23%, income under 3 million VND accounts for 13% and income over 5 million VND accounts for 25%. 4.2 Mobile phone usage in Hanoi inner city area According to the survey results, most respondents said they had used the phone for more than 1 year, specifically: 68.4% used mobile phones from 4 to 10 years, 23.2% used from 1 to 3 years, 7.8% used for more than 10 years. Those who used mobile phones for less than 1 year accounted for only a very small proportion of ~ 0.6%. (Table 4.1) Table 4.1: Time spent using mobile phones Frequency Ratio (%) Valid Percentage Cumulative Percentage Alid <1 year 5 .6 .6 .6 1-3 years 194 23.2 23.2 23.8 4-10 years 571 68.4 68.4 92.2 >10 years 65 7.8 7.8 100.0 Total 835 100.0 100.0 The survey indexes on the time of using mobile phones of consumers in the inner city of Hanoi are very impressive for a developing country like Vietnam and also prove that Vietnamese consumers have a lot of experience using this high-tech device. Moreover, with the majority of consumers surveyed having a relatively long time of use (4-10 years), it partly proves that mobile phones have become an important and essential item in people's daily lives. When asked about the mobile phone network they are using, 31% of respondents said they are using the network of Vietel company, 29% use the network of of Mobifone company, 27% use Vinaphone company's network and 13% use networks of other providers such as E-VN telecom, S-fone, Beeline, Vietnammobile. (Figure 4.1). Figure 4.1: Mobile phone network in use Compared with the announced market share of mobile telecommunications service providers in Vietnam (Vietel: 36%, Mobifone: 29%, Vinaphone: 28%, the remaining networks: 7%), we see that the survey results do not have many differences. However, the statistics show that there is a difference in the market share of other networks because the Hanoi market is one of the two main markets of small networks, so their market share in this area will certainly be higher than that of the whole country. According to a report by NielsenMobile (2009) [8], the number of prepaid mobile phone subscribers in Hanoi accounts for 95% of the total number of subscribers, however, the results of this survey show that the percentage of prepaid subscribers has decreased by more than 20%, only at 70.8%. On the contrary, the number of postpaid subscribers tends to increase from 5% in 2009 to 19.2%. Those who are simultaneously using both types of subscriptions account for 10%. (Table 4.2). Table 4.2: Types of mobile phone subscribers Frequency Ratio (%) Valid Percentage Cumulative Percentage Valid Prepay 591 70.8 70.8 70.8 Pay later 160 19.2 19.2 89.9 Both of the above 84 10.1 10.1 100.0 Total 835 100.0 100.0 The above figures show the change in the psychology and consumption habits of Vietnamese consumers towards mobile telecommunications services, when the use of prepaid subscriptions and junk SIMs is replaced by the use of two types of subscriptions for different purposes and needs or switching to postpaid subscriptions to enjoy better customer care services. In addition, the majority of respondents have an average spending level for mobile phone services from 100 to 300 thousand VND (406 ~ 48.6% of total respondents). The high spending level (> 500 thousand VND) is the spending level with the lowest number of people with only 8.4%, on the contrary, the low spending level (under 100 thousand VND) accounts for the second highest proportion among the groups of respondents with 25.4%. People with low spending levels mainly fall into the group of students and retirees/housewives - those who have little need to use or mainly use promotional SIM cards. (Table 4.3). Table 4.3: Spending on mobile phone charges Frequency Ratio (%) Valid Percentage Cumulative Percentage Valid <100,000 212 25.4 25.4 25.4 100-300,000 406 48.6 48.6 74.0 300,000-500,000 147 17.6 17.6 91.6 >500,000 70 8.4 8.4 100.0 Total 835 100.0 100.0 The statistics in Table 4.3 are similar to the percentages in the NielsenMobile survey results (2009) with 73% of mobile phone users having medium spending levels and only 13% having high spending levels. The survey results also showed that up to 31% ~ nearly one-third of respondents said they sent more than 10 SMS messages/day, meaning that on average they sent 1 SMS message for every working hour. Those with an average SMS message volume (from 3 to 10 messages/day) accounted for 51.1% and those with a low SMS message volume (less than 3 messages/day) accounted for 17%. (Table 4.4) Table 4.4: Number of SMS messages sent per day Frequency Ratio (%) Valid Percentage Cumulative Percentage Valid <3 news 142 17.0 17.0 17.0 3-10 news 427 51.1 51.1 68.1 >10 news 266 31.9 31.9 100.0 Total 835 100.0 100.0 Similar to sending messages, those with an average message receiving rate (from 3-10 messages/day) accounted for the highest percentage of ~ 55%, followed by those with a high number of messages (over 10 messages/day) ~ 24% and those with a low number of messages received daily (under 3 messages/day) remained at the bottom with 21%. (Table 4.5) Table 4.5: Number of SMS messages received per day Frequency Ratio (%) Valid Percentage Cumulative Percentage Valid <3 news 175 21.0 21.0 21.0 3-10 news 436 55.0 55.0 76.0 >10 news 197 24.0 24.0 100.0 Total 835 100.0 100.0 When comparing the data of the two result tables 4.4 and 4.5, we can see the reasonableness between the ratio of the number of messages sent and the number of messages received daily by the interview participants. 4.3 Current status of SMS advertising and Mobile Marketing According to the interview results, in the 3 months from the time of the survey and before, 94% of respondents, equivalent to 785 people, said they received advertising messages, while only a very small percentage of 6% (only 50 people) did not receive advertising messages (Table 4.6). Table 4.6: Percentage of people receiving advertising messages in the last 3 months Frequency Ratio (%) Valid Percentage Cumulative Percentage Valid Have 785 94.0 94.0 94.0 Are not 50 6.0 6.0 100.0 Total 835 100.0 100.0 The results of Table 4.6 show that consumers in the inner city of Hanoi are very familiar with advertising messages. This result is also the basis for assessing the knowledge, experience and understanding of the respondents in the interview. This is also one of the important factors determining the accuracy of the survey results. In addition, most respondents said they had received promotional messages, but only 24% of them had ever taken the action of registering to receive promotional messages, while 76% of the remaining respondents did not register to receive promotional messages but still received promotional messages every day. This is the first sign indicating the weaknesses and shortcomings of lax management of this activity in Vietnam. 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