VietNamNet Bridge – In a fierce competition between each other domestic telecom companies, have been trying to lower the charges for international calls to Vietnam. As the result, they now have to work for free for foreign companies.

Feeding up foreign telecom companies

Vietnamese telecom companies understand well that if they keep fighting each other, they would eventually destroy themselves. However, the race to lower charges (foreign partners pay Vietnamese companies for the international calls to Vietnam) has become fiercer over the last seven years. Telecom companies discussed the way to cooperate instead of fighting each other many times. However, no solution has been found. Though companies committed not to offer too low charges, they broke the promises right after.

After several years of fighting each other to expand their market share, the charges for international calls to Vietnam have been lowered from 35 cents per minute to less than four cents per minute. As the result, the service market, which was considered a “fertile soil”, has been exhausted.

Several days ago, the Ministry of Information and Communication (MIC) organized a meeting with eight service providers, including the Vietnam Post and Telecommunication Group (VNPT), Viettel, SPT, Hanoi Telecom, CMC, Vishipel, EVN Telecom and VTC, to discuss how to stop the race to the bottom.

Nguyen Huu Khanh, Director of VTI, said that domestic telecom companies continue to lower the international call charges, warning that if no solution is found, domestic telecom companies will not be able to make profit any more.

“Telecom companies themselves cannot settle the problem, because they would break promises. MIC needs to intervene by setting a floor price, and enterprises must not sell products below that level,” Khanh said.

The International Telecommunication Union (ITU) once also advised countries to calculate the international call charges based on the production costs.

To Cuong, Deputy General Director of VNPT, said that once MIC reduces the domestic connection fee, the international call charges will be lowered the next day, because foreign partners try to force the charges down. Therefore, Cuong has called for an urgent measure to settle the problem.


Agreeing with this viewpoint, Le Quang Trieu, Deputy General Director of SPT, said that the service fee is coming closer to the production costs and the company is nearly making loss on the service. Trieu also thinks that telecom companies should sit together to discuss the measures to keep the charges at reasonable levels.

“SPT hopes that MIC will set up floor prices in order to raise the VoIP call charges, and will set up the national VoIP portal to control the service,” Trieu said.

Nguyen Hoang Phong, Director of Digicom, a unit of VTC, said that though the service offers a big potential, it will not? bring profit. Meanwhile, Vo Quang Lam, Deputy Director of EVN Telecom, stressed that Vietnam needs to protect the market like the US protects the basa fish market, or Japan protects the international VoIP market.

Representative from CMC said that currently, Vietnamese companies are working for foreign companies for free. “Though domestic companies commit not to offer too low charges, but after that, they give special offers (buy 100 minutes and get 100 minutes free, for example). This is a kind of dumping,” he said.

What to do?

MIC’s Deputy Minister Le Nam Thang said that this is a a market with a big potential with 3.3 billion minutes of call every year and the possible turnover of $140 million.

He has warned that with the openness of the Telecommunication Law, more enterprises will join the market. Enterprises will have the right to set up their sale prices, but they must not sell products at the prices below the production costs.

“If enterprises are found as violating the rules, they may have their licenses revoked,” he stated.

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