VietNamNet Bridge – The three biggest mobile network operators have affirmed that the 20-40 percent 3G service fee increase from October 16 is not big enough to make profit. Meanwhile, users, believing the service fee is too high, have threatened to boycott the service.

Viettel, VinaPhone and MobiFone have decided to raise their Minmax, Max and MIU packages’ fees by 40 percent, or VND20,000 to VND70,000 from the current VND50,000.

The service providers commit to provide the capacity of 600 MB at maximum with the upload/download speed of 8/2 Mbps. The fee for preferential service package for students has increased to VND50,000.

A senior executive of Viettel said the service fee increase is necessary which aims to make the selling price closer to the production cost.

Viettel was the mobile network operator that first raised its voice asking for the watchdog agency’s permission to raise the service fee.

Meanwhile, VinaPhone and MobiFone repeatedly complained that they had to provide services at below the production costs to attract more customers, and that it’s now the time to raise fees to offset the losses.

Nguyen Son Hai from VinaPhone affirmed that the 20 percent fee increase is reasonable.

“We will not be foolish enough to overcharge our clients. This is like dying by our own hand,” Hai said.

A representative of MobiFone said MobiFone, a leading firm in terms of data services, has to follow the Decree No. 25 which stipulates that it must not set up the telecom service fees at the levels below the production costs.

Meanwhile, the current service fee is just equal to 50 percent of the production cost.

“With the investment rate, we need to provide services at VND400-500 per MB on average. Meanwhile, we are selling at VND60-80 only,” the representative said, adding that MobiFone and other network operators would still take loss after the latest service fee increase.

Pham Hong Hai, Director of the Telecommunication Department under the Ministry of Information and Communication, confirmed that the telcos have raised service fees only after getting the nod from the ministry.

He also promised to keep tight control over the 3G service fee in order to protect customers’ benefits.

However, clients have still have barracked the telcos’ decision. Minh Dung, a worker of a media company, complained that network operators have been continuously raising fees, but have not improved the service quality. Lai Thu Hoa in Ba Dinh district also said the service quality is “terrible.”

Meanwhile, analysts have commented it is a violation of the Competition Law if the three biggest network operators, which hold 97 percent of the market share, have unspoken agreements on the service fee increases.

Tuoi tre newspaper has quoted Dr. Nguyen Ngoc Son from the HCM City Economics and Law University as saying that it is necessary to take investigation to find if there is an agreement among the network operators on the service fee increase.

Even if there was no such an agreement, the price increase which causes negative influences to customers made by the group of dominating enterprises must be punished.

The newspaper has reported that an official from the Competition Administration Department has confirmed that the department is collecting figures and documents on the case to find if there is an agreement among the telcos in this case.

K. Chi