VietNamNet Bridge – Vietnamese telecom groups have succeeded in raising the charges on international incoming calls from US2.6 cents to US6.1 cents. However, they have disagreed about the market share allocation.

Small telcos have demanded for a bigger piece of the lucrative market, saying that it’s unfair for them to accept the small part of 20 percent of the market share.

Market sharing - a headache

Vietnamese telcos, when deciding that they need to cooperate to raise the charges on international incoming calls to make bigger profits instead of dumping the charges to scramble for clients, has reached a consensus on the market share allocation.

Under the agreement, big telcos would hold 80 percent of the total capacity, while the remaining 20 percent would be allocated to smaller network operators.

However, the agreement still cannot put an end to the story about the international incoming calls. Hanoi Telecom has recently lodged a complaint to the Ministry of Information and Communication, denouncing big telcos of applying technical and trade barriers to block small enterprises, thus creating an unfair competition.

Hanoi Telecom complained that VNPT and Viettel, the two “big guys” have cut down the connection channels to restrict its traffic.

Prior to that, at a meeting of the watchdog agency and telecom groups, Viettel suggested applying the quota scheme in order to control the service fees to be charged on international incoming calls.

There is a principle that Vietnamese telcos must not dump the services to ensure the high profit for Vietnamese service providers.

Under the proposal by Viettel, VNPT and Viettel, the two network operators which have infrastructure system, would control the connectivity of other telcos to their networks. The control would ensure that Viettel and VNPT would hold 80 percent of the market share, while the other smaller networks would share the remaining 20 percent.

According to Viettel, if smaller telcos can only use the quota granted to them, they would not be able to dump the services. Even if they deliberately lower the service fee to scramble for clients, their behaviors would not affect the market prices, because they only hold a small market share.

Also according to Viettel, foreign partners now do not need to conduct negotiations with Vietnamese telcos about the prices any more, because their systems allow to automatically choose the Vietnamese telcos which set up lowest charges. Therefore, Viettel fears that the dumping of VoiP services is likely to happen, once enterprises try to slash service fees to attract more clients.

No optimal solution found

An official from the Ministry of Information and Communication (MIC) admitted that Hanoi Telecom has its reason to complain about the limitation in competition. However, he said it’s very difficult to manage the market and prevent dumping.

In theory, MIC can control the service fees by setting up a floor price and punish the telcos which sell products below the floor price. However, in reality, the dumping still occurred for a long time, while small network operators were always the “pioneers” in dumping services.

The method suggested by Viettel seemingly puts small networks at a disadvantage. However, it has brought big benefits to the whole nation and the service providers. Meanwhile, no better solution has been found so far.

However, MIC Deputy Minister Le Nam Thang has promised to find out a more reasonable solution to the issue.

Buu Dien