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VietNamNet Bridge – The telecom market was once considered a very lucrative
market for investors. However, since the market has become saturated, it is no
longer fertile soil for them.
Big firms complaining, small firms weeping
Mai Van Binh, General Director of MobiFone, one of the three biggest mobile
networks in Vietnam, has complained that the competition in the telecom market
is overly violent. All service providers have to slash service charges to
scramble for clients, which explains why the 3G service fee in Vietnam is
considered the cheapest in the world.
Vietnam’s 3G service fee, for example, is 10 times cheaper than that in
Thailand. However, low service fee and stiff competition would mean low profits
for development and re-investment.
Trinh Minh Chau, General Director of Hanoi Telecom, said the foreign partner
Hutchison, besides Vietnam, has also made investment in other 13-14 foreign
markets. However, it has been facing too many problems in the Vietnamese market.
“With the overly fierce competitions, telcos would die or just can drag out
their miserable existence,” she said.
“We have injected billions of dollars in the project. If the watchdog agency
does not set up reasonable policies, we would also die one day,” she added.
Nguyen Hoang Phong, Director of Digicom Company, a subsidiary of VTC, said
people thought mistakenly that the telecom market is lucrative, but in fact, the
market’s attractiveness is low because of the overly stiff competition.
He also said that the cutthroat competition has made VTC give up the plan to
join the market, believing that the investment would not bring profits.
A senior executive of CMC TI also said that it’s nearly impossible for small
companies to provide broadband services. While big firms can use the profits
from other services to offset the losses from telecom services, small firms only
have one source of income.
Meanwhile, a representative of Indochina Telecom said the watchdog agency should
give support to small enterprises by laying down reasonable policies. For
example, small firms would be allowed to provide some kinds of services, while
big firms are not.
“If the current situation cannot be solved, small enterprises would die, while
only a few big service providers can exist. If so, the monopoly would return,
and the market would be controlled by the group of big firms,” he warned.
A series of telecom licenses still on the shelf
Indochina Telecom, VTC, CMC and GTel all have got the licenses to provide
telecom services, but they have not “thrown troops into the battlefield” yet.
Under the Telecommunication Law, if an enterprise does not implement the items
stipulated in the license within two years since the day it gets the license, it
would see the license revoked.
The Ministry of Information and Communication (MIC) has recently revoked some
licenses from the investors who did not implement their investment projects.
However, these were mostly the licenses on Internet services.
MIC Deputy Minister Le Nam Thang, in a recent working session with the Telecom
Department, requested the department to check the licenses for telecom services
granted and revoke licenses if necessary.
Meanwhile, Truong Dinh Anh, General Director of FPT Group, said the telecom
market has been full with three leading operators alone holding up to 95 percent
of the market share. Meanwhile, small networks have been incurring losses.
Prior to that, FPT once attempted to join the telecom market by buying EVN
Telecom. However, it finally decided to quit the deal.
Source: Buu Dien
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