VietNamNet Bridge – Mobile network operators, which lose billions of dong a year because of OTT apps, have decided to increase the 3G service fee by 25 percent. The move would allow them to pocket VND100 billion a month.

Since April 2013, MobiFone’s and VinaPhone’s mobile Internet subscribers have to pay VND10,000 a month more for no-limit 3G package service. The users of MobiFone’s MIU and VinaPhone’s MAX service packages, for example, would have to pay VND50,000 a month instead of VND40,000.

Viettel now charges VND40,000 a month for a similar service package, MiMAX, but users have to pay the additional fee of VND10,000 a month. As such, after the latest moves, VinaPhone’s and MobiFone’s service fees have become equal to Viettel’s.

Raising fee to offset loss

A senior executive of a mobile network operator has revealed that telcos have to charge higher fees on services to offset the loss caused by the existence of OTT apps which allow making messages and calls free of charge with smart phones.

The availability of free OTT apps such as Viber, Wala, Zalo, Line, WeChat, WhatsApp allowing to communicate on 3G basis has prompted people to cut the use of the traditional services provided by the mobile network operators. The boom of the free apps in Vietnam, plus the increasingly high number of smart phone users has led to the sharp decrease of the operators’ revenue from traditional services.

The mobile network operators complain that the watchdog agency now keeps a strict control over the activities in mobile telecommunication. Enterprises must be licensed to join the market and bear the state’s management. Especially, telcos have to make big contributions to the state’s budget.

Meanwhile, OTT apps, mostly developed by foreign enterprises, still can operate in Vietnam with no license from the state management agencies. As such, they also don’t bear the state’s management.

The mobile network operators have argued that the OTT apps have been running on their 3G service basis, while they have led to the decreases in the operators’ sources of income, which means the decreases in the contributions to the state budget.

A representative of MobiFone said OTT apps have caused a loss of VND100 billion a month to the mobile network operator.

The Ministry of Information and Communication (MIC) has been urged to take actions to take control over the OTT apps. And for the time being, the mobile network operators have tried to “save themselves before the information ministry saves them” by raising 3G service fee.

The move by mobile network operators of increasing the 3G service fees has been described as a behavior of retaliation to the free OTT app developers.

Mobile network operators to pocket VND100 billion

A report of MIC released in early 2012 showed that there are 16 million 3G subscribers now in Vietnam, of which 99 percent are the subscribers of the three biggest service providers Viettel, MobiFone and VinaPhone.

In late 2012, IDC market survey firm released its report showing that the figure had risen to 20 million.

Suppose that 50 percent of the subscribers now use no-limit service package, who have to pay VND10,000 more a month, will then pay the 25 percent charge increase which would bring the turnover of VND100 billion a month to the three biggest network operators.

PL TP HCM