Mobile phone providers caught up in price war

Viet Nam’s mobile phone service providers are rushing to reduce charges as the Ministry of Information and Communications’ (MIC) new Circular No 11 to restrict promotional activities came into effect on Thursday.

Major mobile phone businesses including Viet Nam Post and Telecommunications Group (VNPT) and the military-run telecoms group, Viettel have asked the ministry to rapidly agree to customer tariff reductions.

After removing two cheap services, Viettel is preparing to reduce tariffs by 15 to 20 per cent for both pre-paid and contracted subscribers.

Nguyen Viet Dung, deputy head of Viettel’s marketing department said it had proposed that the ministry should have begun applying the reduction since February.

He added that the provider also proposed other reductions which were expected to be applied next week while they are waiting for acceptance from the ministry.

VinaPhone and MobiFone which are under VNPT have also planned tariff reductions.

VNPT’s representative said it is proposing to apply a price reduction of 15 to 20 per cent to subscribers.

Deputy Minister of MIC Le Nam Thang said they had sent documents to mobile phone service providers asking them to announce this year’s mobile phone tariff price structures.

Thang said the enterprises would themselves adjust costs in line with their business operation as well as the ministry’s regulations.

He added that the ministry would agree to tariff reductions to ensure consumers wouldn’t lose out, with the majority of subscribers receiving reductions, rather than just those taking advantage of promotional campaigns.

“However, the submitted proposals should be carefully considered,” he said.

Experts in the sector said competition among mobile phone subscribers over tariff reductions would be better than promotional programmes as all subscribers could benefit over the long term.

They said only a group of customers benefit from the promotional programmes over a short period, adding that the reduction would also help reduce consumer costs, thus contributing to the country’s economic growth.

While big players in this field including Viettel, MobiFone and VinaPhone have continued to ask for tariff reductions, Vietnamobile and S-Fone have remained silent.

S-Fone managing director Ho Hong Son said it was considering reductions in the near future, adding that it could adjust costs within 15 days after following other tariff policies by rival providers.

The new circular asked promotions to be restricted to just 90 days a year, with the total time limit of a single campaign being 45 days with maximum promotional reductions of less than 100 per cent on phone cards.

The circular aims to limit the waste of Subscriber Identifier Modules (SIMs) as well as encourage healthy competition among phone providers. — VNS

Tags: Vietnam Telecom, Vietnam telecom maket