Nov 26, 2012

Vietnam - Who will get the pieces of international VoIP cake?

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VietNamNet Bridge – The Vietnam Post and Telecommunication Group (VNPT) and Viettel are believed to hold 80 percent of the VoIP international market, while the remaining 20 percent has been divided to other enterprises.

3.5 cent per minute threshold not stable

Vietnamese telecom firms have unanimously charged foreign telecom exploiters higher for the services of connecting the inbound calls with the subscribers in Vietnam from 2.6 cent to 3.5 cent per minute.

The move by the firms has settled the problem which had been existing for a long time among Vietnamese telcos. The enterprises tried to scramble for foreign clients by dumping the services, which experts warned, would kill Vietnamese enterprises.

The decision has been made by telcos after the Ministry of Information and Communication warned them many times about the high risk. Meanwhile, Viettel and VNPT has reached an agreement to raise the service charge to 4.1 cent instead of 3.5 cent.

However, some service providers have doubts about the feasibility of the agreement.

“Viettel may set the service charge at 3.5 cents per minute and it may raise to 4.1 cents. However, will VNPT keep calm and maintain the high service charge if it sees the output decrease?” he questioned.

“As such, the game would heavily depend on the operation of the big guys – VNPT and Viettel,” he added.

The director has every reason to worry about the breaking of the agreement.

Under the decision made on March 2, 2011, the Ministry of Information and Communication suggested the service fee of 855 dong per minute, or 4.1 US cents. It also stipulated that one would be considered as conducting the dumping behavior, if it provides the service at below 15 percent of the above said price level.

However, telcos then still kept dumping, leading to the service change plunge to 2.6 cent per minute, hitting the production cost.

Le Dang Dung, Deputy General Director of Viettel said that foreign partners now run the systems which allow them to automatically choose the Vietnamese partners who offer lowest charges, while no need to conduct negotiations about the charges as previously.

Dung said Viettel once was determined to keep the service fees stable, but it later found it was not chosen by foreign partners.

“However, Viettel has grown up into a big enterprise, and it should not run after the foreign partners to persuade them to use its services,” Dung said.

Who would obtain the pieces of the cake?

Small telcos once suggested that the quota scheme should be applied to prevent enterprises from dumping services. Telcos would divide the cake after considering their capability and would not exploit more than they are allowed.

However, the Ministry of Information and Communication said that the quota scheme would violate the Vietnam’s commitments on opening the market.

The representative of CMC said CMC advocates the idea about the quota scheme. However, he stressed that necessary measures need to be taken to ensure the connection channels for small enterprises after the market shares for enterprises are defined.

In this case, an association of telcos would come forward and allocate quotas to its members. However, to date, such an association has not been set up yet, though the idea was raised many years ago.

Meanwhile, Dung believes that it would be better to allocate the pieces of the cake by setting up limitations on the number of connection channels, which means that enterprises would be granted quotas and the collateral number of channels.

Buu Dien

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