VietNamNet Bridge – Mobile phone service providers are gradually swallowing up the market share held by fixed line service providers. The latter have voiced their concern about the sharp fall in their revenue.

VNPT Hanoi, for example, is losing 60,000 fixed line subscribers every year. The information released by Tran Manh Hung, Director of VNPT Hanoi at a working session with Minister of Information and Telecommunications Le Doan Hop recently.

Analysts also say that the strong growth of mobile phone networks has caused much trouble to the fixed line service providers. In 2008, the revenue of VNPT Hanoi from fixed line services was 1506 billion dong, a decrease of 10.3 percent compared to the year before. The decrease rate rose to 10.6 percent in 2009, when the revenue was 1346 billion dong.

VNPT anticipates that the revenue from fixed line services in 2010 would be 1170 billion dong only, a fall of 13 percent compared to 2009.

Other cities and provinces have also reported the setback of fixed line services, saying that fixed line service providers have been losing subscribers in favour of mobile phone service providers.

Meanwhile, mobile service networks have seen the number of subscribers increasing by tens of million every year. 20 million new subscribers appeared in 2010, a very high figure, even though 2010 witnessesed the lowest growth rate in number of mobile phone subscribers in the last five years.

Hung from VNPT Hanoi said that the number of fixed line service users has been decreasing gradually because the mobile phone service fee has been decreasing in recent years, encouraging more people to use mobile phones.

Meanwhile, it is expected that the mobile phone service fee will further decrease by 10-15 percent in the coming years, because service providers now have to compete fiercely with each other to attract clients.

In August, MobiFone, Viettel and VinaPhone, the three biggest service providers in Vietnam, all slashed their fees. MobiFone, for example, has lowered the network connection fee from 99,000 dong to 60,000 dong (- 49.5 percent). The inner-network call fee has been lowered to 880 dong per minute, while the intra-network call fee to 980 dong per minute, the decreases of 10.24 and 9.28 percent, respectively.

Meanwhile, service providers have also launched different products targeting different groups of clients. The sharpest fee reductions have been applied to students. The users of Q-Teen package can now enjoy the fee reduction of 15 percent, while users of Q-Student package 14.25 percent.

According to analysts, mobile phone service fee is now higher by only 10 percent than fixed line service fee, while mobile phones have many advantages in comparison with fixed line. Especially the flexibility they offer, of being able to connect to other subscribers at any time and everywhere. They can enjoy the rate reductions on holidays and weekends, use various kinds of value added services and access Internet at any time.

The continuous decrease in the mobile phone services fees, the fixed line may soon become the more expensive option.

Using mobile phones has become a dominant trend, making mobile phones a serious rival to fixed line. In the eyes of customers, however, they are very “likeable” because of the benefits they bring.

Source: Thoi bao Kinh te Vietnam