VietNamNet Bridge – Mobile phone service providers have been trying to reduce charges in order to attract more clients. However, analysts believe that the charges would not be slashed further, since the current charges are approaching the cost prices.

According to Nguyen Dinh Chien, Deputy Director of MobiFone, the market have seen significant changes. Several years ago, new service providers always led the charges reduction race. However, at this moment, the big service providers, not small and the new comers, are taking over.

Chien said it is very difficult to predict if the mobile phone charges would be eased further, because this depends on the business strategy of the service providers. However, he said the current charges are approaching the cost prices, and it is not very likely to see the charges to be slashed further.

Nguyen Manh Hung, Deputy General Director of Viettel, said everything would depend on the policies to be issued by state management agencies and the business strategies of enterprises. “If service providers continue to compete with others by reducing charges, they will still be able to survive. However, they will not have money for future re-investment,” Hung said.

Nguyen Dinh Hung, Deputy Director of Vietnamobile, said small service providers may not be able to join the “charges war”, because their charges are alreadynearly at the level of to the cost prices. What small service providers can do now is just providing attractive service packages and upgrading the quality of the network.

In August 2010, three biggest service providers, VinaPhone, MobiFone and Viettel, reduced their charges sharply by 10-15 percent. Meanwhile, it took small service providers one month before launching new promotional service package.

Analysts have warned that the “price war” will “squeeze” service providers, because they will not have money for accumulation and for re-investment. Besides, the war will also make the market unsustainable.

According to Bui Quoc Viet, a senior executive of the Vietnam Post and Telecommunication Group, in an overly stiff competition, both small and big enterprises will suffer.

Deputy Minister of Information and Telecommunication Le Nam Thang also said he can see signs of the unsustainable development. The companies’ finance indexes are decreasing, while the ARPU (Average revenue per user) has also decreased.

According to Viet, Vietnam’s ARPU is about three dollar per subscriber per month. Meanwhile, the average ARPU in the world is 17 dollar, and the ARPU in Asia is 10 dollar per month. Though Vietnam’s ARPU is low, the country is among the 10 countries which have the highest numbers of mobile phone subscribers.

According to the General Statistics Office, by the end of September 2010, Vietnam had 142 million mobile phone subscribers.

Source: Dau tu