Digital signature service market faces tough competition

More than 348,000 out of the total 500,000 businesses operating in Vietnam now use digital signature services and declare their taxes online, the English language news portal VietNamNet Bridge said.
More than 348,000 out of the total 500,000 businesses operating inVietnam now use digital signature services and declare their taxesonline, the English language news portal VietNamNet Bridge said.

Ninedigital signature service providers have been licensed since September2009, when the Ministry of Information and Communication (MIC) began theservice.

The nine providers include VDC, Bkav, FPT, Viettel,CKCA, CA2, SafeCA, SmartSign and NewTel. Of these, FPT, the largestprivate-run technology group, and VDC, a subsidiary of the state-ownedVietnam Post and Telecommunication Group (VNPT), scramble for the firstand second positions in the market. Each of them reportedly has 80,000customers.

According to Nguyen Hong Hai, Deputy Director of VDC,many of these that do their taxes online are mostly located in Hanoi, HoChi Minh City and big cities and provinces.

“The coverage ofdigital signature on Vietnamese enterprises is relatively large. Thismeans the remaining part of the market for service providers to exploitis small,” said Tran The Hien, CEO of FSE FPT.

“We can only seeknew customers among the businesses that still have not used theservices, and newly established businesses,” he added.

Ngo TuanAnh, Vice Chair of BKAV, a well known internet security solutionprovider, also thinks there are more digital signature service providersthan needed.

“There are nine service providers to serve 500,000businesses which need the service to make tax and customs declarations.The supply has exceeded the demand,” he said.

MIC, which has realized the oversupply, has recently refused to grant operation license to businesses.

Observerssaid Vietnamese businesses mostly use digital signature services tomake online tax and customs declarations, and to do e-banking and stocktransactions.

FPT, VDC and Bkav also provide digital certificateservices to SSL websites to protect important data transmitted viainternet, local networks and outer networks, or for servers toautomatically sign e-transactions.

They also provide services to protect manufacturers’ software and users against risks and malware when downloading.

Anhfrom Bkav said the company is planning to provide services to clientsto serve their declarations of social insurance and e-invoices, onceinsurance and taxation agencies accept e-declarations and e-invoices.

Diversifyingservices is the only choice for service providers to improve theirrevenue as there are now a limited number of customers.

Hai ofVDC also puts high hopes on the development of online publicadministration services, saying that this would create a promising areafor digital signature firms to exploit.

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