Vietnam's telecoms regulator this week said the ongoing market reshuffle that will ultimately lead to the privatisation of state-owned Mobifone will increase competition and bring about change in the mobile space.

Speaking at CommunicAsia in Singapore, Nguyen Phong Nha, deputy director general of the Vietnam Telecommunications Authority, confirmed that the country's prime minister last week gave his approval to the restructure.

Mobile operator Mobifone has been spun out from parent company Vietnam Post and Telecommunications (VNPT), which also owns sister company Vinaphone, in preparation for an IPO. After privatisation the state will retain a 75% stake in Mobifone, which will be renamed the Mobile Telecom Corporation.

Mobifone is the second largest mobile provider in Vietnam with a market share of 31.8%, while Vinaphone is number three with 17.5%, Nha said. Market leader Viettel, which is also owned by the state, has a market share of 43.5%.

"The market will change," in light of the prime minister's approval of the restructure, Nha predicted. The new structure is designed to "promote a competitive market," he said.

The big three operators together account for almost 93% of Vietnam's 121.6 million mobile subscriptions. With a population of around 90 million, mobile penetration stands at 135%.

The majority of those connections -99 million - are 2G, Nha said. 3G connections number 22.7 million, of which 19.6 million are mobile handsets and just over 3 million datacards.

"Smartphones are very popular in Vietnam," Nha said.