VietNamNet Bridge – The delay in launching services of the eighth licensed mobile network in Vietnam – Indochina Telecom – has been blamed on the harsh competition in the market which is believed to have become saturated. To date, Indochina has not made any official announcement about the moment of officially joining the market.
The ceremony on signing a cooperation agreement on personnel training between the Information Technology Institute and Indochina Telecom took place on July 20. The ceremony caught the special attention from press agencies and the public, because people hoped they would hear something about the detailed plan of Indochina Telecom to launch the eighth mobile network in Vietnam.

However, representative from Indochina Telecom declined to make any statements, even though Indochina Telecom obtained the license two years ago, and the Ministry of Information and Communication has granted Indochina Telecom the right to use “golden” prefixes for subscribers’ numbers of the network - 0998 and 0999 – which are easy to remember and believed to bring luck.

Unlike other mobile network operators, which try to launch noisy advertisement campaigns before the day they launch services, over the last two years, Indochina Telecom has not made any announcements about its business plan, though sources said that Indochina Telecom has been making hectic preparations for joining the telecom market. It has been conducting negotiations with partners on purchasing equipments, developing infrastructure and training staff.

VnExpress has quoted its source as saying that with the intensive preparations, the moment of launching services is nearing.

Unlike the other seven operational telecom networks, including VinaPhone, MobiFone, Viettel, S-Fone, Vietnamobile, Beeline and EVN Telecom, Indochina Telecom will be a mobile virtual network operator (MVNO).

This means that Indochina Telecom will build up the network and provide mobile services to consumers, though it does not need to build up an infrastructure base of its own. Indochina Telecom can only cooperate with other telecom companies and share the same infrastructure to provide services.

The telecom company which has been assigned to share its infrastructure with Indochina Telecom is the “big guy” who is holding the biggest market share – Viettel.

A senior executive of Viettel said that sharing network infrastructure is the thing which has been done in many countries in the world, but there is no precedent for such an affair in Vietnam. Therefore, it takes much time to connect and test the network and to negotiate about the profit sharing between the involved parties.

“I think that the negotiations between Viettel and Indochina Telecom would only be wrapped up in two months,” the executive said.

He went on to say that MVNO, by the nature, means buy wholesale for retailing. Indochina Telecom would buy services from Viettel and then sell to customers. Therefore, in order to make the virtual network exist and profitable, Viettel needs to sell services to Indochina Telecom at low prices.

However, analysts have pointed out that selling services cheap would be the thing Viettel needs to consider thoroughly. Telecom networks now compete fiercely with each other on the market, while the service charges have been decreasing continuously, now nearly approaching to the cost prices, which have led to the sharp falls of profits.

The three biggest mobile network operators, namely VinaPhone, MobiFone and Viettel, which have been roaming services to hundreds of telecom networks in the world, have been treating each other as rivals on the domestic market. Every year, the telcos spend billions of dollars to expand the networks, while they can share the same infrastructure in order to save money.

An expert said Indochina Telecom will face a lot of challenges when running the virtual network. The only choice for the new comer on the market is to target niche markets, which “big guys” pay little attention. However, in fact, even the niche markets have also been eyed by the three big guys. A lot of sale promotion campaigns have been run by the three big guys recently who target poor people who have not used mobile phones, who hope to attract the last subscribers in the market.

TBKTVN