VietNamNet Bridge – The Ministry of Information and Communication (MIC) has warned telcos against dumping international VOIP services, threatening to impose heavy sanctions on firms that break the rule.

MIC’s Telecommunication Department’s director Pham Hong Hai made the statement after discovering that many telcos dumped services in the past, thus harming the national interest.

The auction for inflow international VOIP output took place on December 12 as planned. MIC, emphasizing the necessity of the auction, said this will help put the international VOIP service providers on the right track.

VOIP, known as Voice Over the Internet Protocol, is a methodology or technology for the delivery of voice communications and multimedia sessions over internet protocol.

Viettel, VNPT (the Vietnam Post and Telecommunication Group) and MobiFone, the developers of the three largest telecom networks in Vietnam, have to transfer 30 percent of the flow VOIP service output to smaller enterprises via auctions.

These are the three “big guys” that have telecom infrastructure systems of their own.

Meanwhile, smaller enterprises who have not made investments in infrastructure still can provide services on the basis of the existing systems.

The price set by MIC for the auction is VND850 per minute, or $0.04 per minute. The same floor price is applied to different output packages.

Hoang Son, deputy general director of Viettel, the military telecom group, urged MIC to apply drastic measures to supervise the service provided by telcos in order to prevent telcos from dumping services and providing voice services at below $0.058 per minute – the current average threshold.

Telcos reportedly have been making fat profits from the international VOIP services over the last few years.

This could be the reason behind the participation of many firms at the auction which joined “the battle” for the first time.

However, the appearance of many players could cause problems.

A mistake may be repeated if the players, in an effort to lure foreign partners, try to lower service fees, which would force the average service fee down.

In fact, the dumping has existed for 10 years, and this improved only a little after MIC intervened and requested telcos not to dump services.

And now MIC has threatened to impose a heavier sanction – revoking operation licenses - on the telcos that dump services in the market.

“The firms which provide services at unusually low fees and ‘spoil’ the market must be punished heavily,” Son said.

In 2011, the service fee dropped dramatically to the deepest low of $0.026 per minute, nearly hitting the production cost. The inflow call output is 3 billion minutes a year.

Buu Dien