VietNamNet Bridge – Mobile operator Viettel has officially asked the Ministry of Information and Communications for permission to raise its fees for 3G services as the current fee structure does not even cover production costs.

Viettel's Deputy General Director Tong Viet Trung said that the numbers of 3G subscribers had risen dramatically to upwards of 20 million, backed by the increasing popularity of smartphones.

"At the beginning, we set a low 3G tariff to attract subscribers to fill the networks bandwidth, but as the number of users has increased substantialy, we now have to raise our prices as the current tariffs are simply too low", Trung said.

"However, we are still considering the size of the increase."

According to figures released by mobile operators in Viet Nam, the price of 3G in the country is reportedly 10 times lower than in China and 40 times lower than Europe.

In April, two other leading mobile phone service providers, MobiFone and Vina-Phone, hiked their fees on 3G packages for mobile internet use by 25 per cent, from VND40,000 (US$1.9) to VND50,000 ($2.4) a month.

They cited financial losses being made to popular software companies such as Viber, WhatsApp, Yahoo Messenger, Facebook Messenger, Skype and iMessage that allow smartphone services based on 3G connections for free.

The use of Over The Top (OTT) services comes mainly from foreign providers and is expected to cause losses of VND100 billion ($5 million) each month, around 9-10 per cent of the turnover of local telecommunications companies.

In a meeting in March, the Deputy General Director of Viettel, Nguyen Manh Hung, confirmed that OTT services posed a threat to local IT, telecommunications and television companies.

These local companies earn up to 80 per cent of their turnover from texts, phone calls and television. However, these services are free in OTT services.

Free texts and calls are also expected to cause losses of 9-10 per cent for global mobile service providers, equivilent to $13 billion a year.

Figures released by MobiFone show that 280,000 calls and 8.7 million text messages from 3.5 million users are made through Viber. This is causing a loss of over VND1 trillion ($50 million) a year for local service providers.

MobiFone and Vinaphone say that another main reason for the rise in fees is the huge investment needed in infrastructure, to increase the current capacity.

Quality should also improve

Mobile operators last month were instructed to increase the quality of their services after an industry survey revealed that 45 per cent of all 3G subscribers were dissatisfied with the quality of services.

The survey was carried out by the Viet Nam Post and Telecom newspapers and international market researcher Nielsen in Ha Noi, HCM City and Da Nang.

The survey was carried out based on five catergories relating to the satisfaction of 3G users including connection quality, the reputation of providers, tariffs and promotions, tariff packages and services.

Concerning the quality of connections, 92 per cent of 3G users surveyed considered the speed of a connection the most important factor, while 55 per cent were satisfied with the quality of 3G in 2012, down from 64 per cent in 2011.

Relating to the reputation of network operators, 84 per cent of 3G users were highly satisfied with the reliability of their operators, although only 75 per cent were satisfied with their creativity.

Meanwhile, 66 per cent of 3G users were satisfied with service tariffs, and 79 per cent thought the accuracy of billing was okay.

However, 22 per cent were not happy with the promotions they received.

About 40 per cent of 3G users said they weren't interested in tariff packages, however the same number of respondents said there should be more.

On customer services, 14 per cent of 3G users said they were unsatisfied with the quality of service provided, while many complained about the lack of capable hotline staff.

Source: VNS