Data charge race

The main goal of 3G-powered mobile technology is to meet the consumer needs for using high-speed data access and contents on mobile devices. Mobile service providers in Vietnam are focusing on this segment following many changes in mobile phone service charges.

A race to cut data charges

Since the 3G was launched in Vietnam, service providers have cut off charges many times. The first reduction happened in March after Viettel, the largest mobile service provider by users, announced to supply 3G services with many flexible and cheaper packages. MobiFone – the most favoured brand in Vietnam – announced to slash 3G tariffs. In July, the military-run Viettel offered preferential treatments to customers using D-Com network penetration kit, with discount amounting to 30-45 %. Recently, the Vietnam Posts and Telecommunications Group (VNPT), which administered MobiFone and Vinaphone, decided to decrease service charges.

Before August, customers activated MobiFone and Vinaphone service with a 3G USB and a SIM card, they paid VND1-1.8 million for 750 Mb of data each month 12 straight months and enjoyed 50 % discount for 250 MB of data each following month and 50 % bonus for top-up values. Meanwhile, Viettel offered a service with VND700,000 for 600 MB of data a month but the monthly subscription charge is VND30,000. Viettel’s 3G PC data charge is VND50 per Mb of data and its 3G Laptop charge is VND65 per Mb.

Actually, the current service tariffs of Viettel, Vinaphone and MobiFone are similar. They also use the same rate of excessive data use in each package (a customer has to pay an additional VND10 per 10 Kb in excessive of the limit of the package). Prepaid PC 3G services of VinaPhone and Viettel are also equal. MobiFone also adjusted both Mobile Internet and Fast Connect packages, which charge VND65 per Mb of data.

In this race, Viettel also launched a combination service (3G USB, PC and 3G services) as it distributes computers through its retail networks. Meanwhile, VinaPhone and VDC cooperated to provide MobileVNN for customers using Vinaphone’s 3G services on computers at the same time with MegaVNN ADSL broadband internet or FiberVNN cable of VDC. When they are disconnected with VDC fixed internet lines, they can use Vinaphone’s 3G Internet devices to access the internet. According to statistics, the joint charge is 30 % cheaper than the rate of Mobile Broadband, VND54 versus VND65 per MB of data. Customers enjoy 350-450 Mb free of charge a month, depending on packages.

Until now, mobile internet and computer internet still generate most revenues for network operators.

Many forecast 3G service charges will continue to drop due to growing competition of service operators. To boost the demand, they need to focus on young users who are only affordable for low expenses.

From upmarket to downmarket

The biggest achievement of Viettel was not the low service charge but its flexible end-user device policies. Viettel’s 3G USB devices were sold at lower prices than their rivals in couple with many preferential treatments. Hence, the number of their D-Com subscribers has increased rapidly. Last but not least, the military-run network operator also announced to produce 3G devices and pledged to offer more competitive price rates.

Vinaphone and MobiFone had to expand services on their devices, allowing customers to use bonus accounts to use its services, while Viettel’s D-Com discounted service charges on main accounts.

VinaPhone also launched five types of 3G USB with prices ranging from VND780,000 to VND1 million, plus attractive preferences and bonuses for users.

The recent market development also forced 3G service suppliers to adjust their business. While 3G phone prices are falling, 3G-access device prices remain high. It is a paradox. The reason for the high price of 3G USB is this is an important source of incomes for network operators. For example, Chinese and Taiwanese device is offered at the region of VND400,000 and VND700,000 on the market, Vietnamese network operators sold at double or treble prices to their customers. Until hackers announced to unlock foreign devices to use Vietnamese SIM card for 3G services, they started to slash prices of devices.

According to experts, the expansion of 3G services is not quick due to many factors. Current services are very basic and unattractive to a majority of users. However, this requires network operators to create breakthroughs in value-added services.

Network operators boosted their difficulties arising from huge investments for 3G networks and limited services on new infrastructure. So, they need supports to attract customers and popularise services.

In fact, 3G coverage is now only available in major cities and the quality is still a matter of controversy. On the other hand, Wi-Fi coverage in big cities is very wide in major cities and they mostly use data services for free. On global scale, Vietnam’s 3G service tariffs are quite low. However, Vietnamese telecom firms lack value-added services for both personal and corporate purposes. – VCCI

Tags: Vietnam 3G