Vietnam - The absurdities that only exist on Vietnamese telecom market

A foreign expert has commented that Vietnam’s mobile telecom industry has been developing very rapidly, but it does not have a firm foundation, while there exists abnormal and funny things.


Pre-paid subscribers “pampered” more than post-paid

While loyal clients who have been using services for the last many years have been ignored, pre-paid subscribers have been always welcomed soliciting by telecom service providers. The problem is that the service providers fear that pre-paid subscribers, accounting for 90 percent of their clients, would leave the networks one day for other networks, while post-paid subscribers prove to be faithful to the networks.

A post-paid subscriber complains that he has not enjoyed any considerable preferences from the telco over the last five years, since he began using its services. “The service provider only offered charge reductions sometimes, while the reductions were small and insignificant,” he said.

Meanwhile, mobile service providers have been trying to retain pre-paid subscribers by offering continuous sale promotion campaigns.

Burning all the number repository and crying for help

Vietnam has approximately 87 million people in population and over 100 million mobile subscribers, according to the Ministry of Information and Telecommunication. However, in the last three years, mobile network operators repeatedly complained that the number repository has been running out.

Meanwhile, they continue selling simcards in masses on the market with huge offered bonuses on accounts, which has encourage people to continuously purchase new simcards. The people would rather purchase new simcards to enjoy preferences rather than using old simcards with the old mobile phone numbers.

Therefore, experts have warned about the “rubbish simcards”, i.e the simcards which are used only once before they are thrown away.

Director of the Telecommunication Department, Pham Hong Hai, under the Ministry of Information and Communication also said that it is unreasonable to say that the number repository is running out, requesting telcos to give explanations.

Pre-paid subscribers are “virtual”

The watchdog agency has discovered a lot of problems in personal information declaration of pre-paid subscribers.

In the past, people could purchase as many simcards as they wanted, while they did not have to give personal information. However, in an effort to tighten the control over pre-paid subscribers, the watchdog agency has decided that all the pre-paid subscribers must provide necessary information.

It seems that the new regulation still cannot settle the problem of “rubbish simcards”. Hundreds of thousands of “virtual subscribers” have been found as registered with vague names, while a lot of subscribers’ owners have been found as having the same identity card numbers.

One network operator uses two technologies

EVN Telecom is considered a “brave” network operator when it has developed two different mobile network infrastructure systems.

With the two networks, EVN Telecom’s clients stay in the junction and they have to choose either to use CDMA 450MHz or 3G UMTS. If they want to shift to use 3G services, EVN Telecom’s clients will have to change the simcards and change mobile phones, because the two technologies are quite different.

This is really a headache to EVN Telecom, when CDMA subscribers are now accounting for the big proportion of clients of the company, while the revenue from 3G subscribers is not high enough to cover expenses.

Telcos cannibalize content providers

An expert from Japanese Dentsu said that in Japan, the profit sharing ratio between network operator and content service providers (CP) is 10-90, which means that CP can earn the biggest proportion in revenue. Meanwhile, the situation is quite different in Vietnam.

For the last many years, Vietnamese CPs have been at a disadvantage, because they have been hampered by network operators. It is because network operators have clients, while CPs are just considered partners. The unfair profit sharing has led to the loss of hundreds of billions of dong for CPs, while it does not encourage creating high quality content services.

Vuong Long
Business & Investment Opportunities
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