An enterprise will not be allowed to concurrently hold over 20 per cent of two telecommunications firms operating in the same market or market segment, the Ministry of Information and Communications (MIC) has said.

The ministry will apply Decree No 10/2012/TT-BTTTT, issued yesterday beginning August 31 and will review the market on a periodic basis to monitor compliance with the rule.

While the ministry issued no explanation for the new rule, market watchers suggested that it was primarily aimed at reducing unfair competition and monopoly in the lucrative mobile services market.

Viet Nam Post and Telecommunications (VNPT) Group, which fully owns two veteran mobile service providers, MobiFone and Vinaphone, would be the obvious target of the new rule.

"With the new rule, VNPT will have two choices: sell shares in MobiFone and Vinaphone, or merge them," telecommunications market analyst Nguyen Lan Phuong told Viet Nam News.

Some countries around the world allow market concentrations of not more than 10 per cent, Phuong explained, others allow up to 30 per cent. "The number of 20 per cent seemed to be appropriate to Viet Nam," she said.

The nation's mobile services market in the past six months has witnessed a number of changes. Ailing mobile carrier S-Fone earlier this week laid off most of its Ha Noi employees, while Vietnamobile last month sought a bailout from the Government to stave off bankruptcy.

Small players continue to compete in a market dominated by military-run provider Viettel and VNPT's MofiFone and Vinaphone, which hold a combined 95 per cent market share, while Beeline, Vietnamobile, and S-Fone divide the meagre spoils.

Gtel Mobile spent US$45 million in April to acquire a 49-per-cent stake in the Beeline network as Russia's second-largest telecom operator VimpelCom withdraw from the venture.

Vietnamobile and Beeline have also bemoaned the sizeable hike in backbone transmission rental rates they are being charged by VNPT and Viettel, with recent tariff hikes averaging 300 per cent. VNPT and Viettel are the sole owners of the country's network infrastructure.

The Ministry of Information and Communications last week asked the country's two biggest telecoms VNPT and Viettel to delay implementing new tariffs on use of network infrastructure by smaller telecoms. The ministry told VNPT and Viettel to temporarily keep existing tariffs in place until the end of this month while negotiating appropriate tariff adjustments with other telecoms.

VNS