VietNamNet Bridge - Many mobile users in Vietnam want to know whether mobile 3G rates in Vietnam are high or low compared to the average of the region and the world.

The International Telecommunications Union (ITU) has announced the 3G charges globally in 2014, based on data in 2013, and the monthly charges for the 500MB/month service package.

In Vietnam, according to a survey in early 2015, the average spending for mobile 3G services was from VND50,000 ($2.5) to VND100,000 ($5) per month (equivalent to the VND70,000/600MB/month package) and up to 93% of users chose this package.

Therefore, it can be said that the majority of Vietnamese users used similar 3G services in the world.

According to the ITU, the average price for the world's 500MB package is $16.9/month for prepaid service and $17.6/month for postpaid services.

The corresponding prices are $16.3 to $17.5/month in developing countries and $17.8 to $18.3/month in developed countries.

Comparing the prices of the same service package that is used by the majority of users in Vietnam and the world (500MB-600MB), the charges in Vietnam are equivalent to 44.3%-46.1% of the world average and 44.6%-47.8% of developed countries.

Therefore, Vietnam’s mobile 3G charges are in the world’s lowest group.

The back side of cheap 3G rates

Vietnam’s telecom market has certain advantages that make the 3G rates much cheaper than other countries, including:

1/ When the 3G services began to be offered in Vietnam (10/2009), competition in the domestic telecommunications market was pretty fierce thanks to the open market policy of the Ministry of Information and Communication. The Vietnam Post and Telecommunications Group (VNPT) lost its monopoly position since 2005. VNPT’s VinaPhone and MobiFone had to compete with Viettel and some other minor rivals.

2. The great potential of the 3G market in Vietnam: 36% of Vietnam's population are connected to the Internet by smartphones and this percentage will continue to increase in the coming years. 3G service providers understand this trend and they accepted losses in the early period to attract subscribers. They used big profit earnings from 2G services to cover the losses.

However, the competition between service providers for low 3G rates to lure subscribers in the past five years has left consequences.

When the number of mobile 3G subscribers increases rapidly, the infrastructure gets overloaded while service providers have not earned enough profit to reinvest into the system. As a result, service quality is getting worse.

Mobile 3G service providers are facing a vicious circle. If they don’t upgrade service quality, customers will leave, but if they upgrade their network, they have to raise 3G rates and their customers will not be satisfied.

Xuan Huy