Most recently, mobile network operators stated they will give 90 percent of revenues to CPs, if CPs can produce the content that cannot be done by them. However, CPs have replied that this is really a “puzzle” in the current circumstances, where ideas can be copied at any times.
The statement of mobile network operators
CPs have been complaining about the unreasonable profit sharing proportions offered by mobile network operators, saying that they get only 30-40 percent of revenue, while the other 60-70 percent fall into the pockets of network operators.
Commenting about the current sharing profit mechanism, Deputy General Director of Viettel Nguyen Manh Hung said that CPs still cannot provide the products attractive enough to “seduce” more users.
He said that the content revenue of mobile network operators in the last few years mostly came from SMS service, which is absolutely within the reach of mobile network operators. Therefore, CPs should do the things which cannot be done by network operators in order to require higher profit.
According to Hung, it is impossible to prohibit mobile network operators to produce content. If they are prohibited to do that, they would establish subsidiaries to undertake the job. However, if are creative enough to make the products which cannot be done by network operators, or the products which require heavy investment, such as mobile data, the market would completely fall into the hands of CPs.
“If CPs can do that, we will have to accept higher profit proportions for CPs, even though they require 90 percent of revenue,” Hung said.
Network operators should lead the app market
Nguyen Manh Ha, General Director of VMG, a CP, argued that it would be better to let users assess the quality of applications or products, and that the conclusion about their quality would only be made after a certain period.
Ha said that network operators only consider technical conditions when stating that they can produce apps themselves and they do not need to cooperate with CPs.
The problem is that in Vietnam, no one can do the products which cannot be copied by others. “An idea could be copied right after the idea is made public,” he noted.
Sharing the same view with Ha, Do Tuan Anh, Director of AppStore Vietnam said that requesting CPs to make out the products that cannot be done by network operators is a behavior of “setting a puzzle for CPs”. He stressed that this is really an impossible mission, because all products can be imitated easily.
An analyst has commented that since content services are developed on the clients of mobile network operators, it is understandable why network operators always have a hold over CPs, and they have the power to decide how much to give to CPs.
The analyst has also said that network operators would only offer the bigger profit proportion to CPs if CPs can do the things that the operators cannot. However, this seems to be impossible for CPs, because all network operators have value added centers, while network operators have better technologies and relationships with foreign partners than CPs.
Meanwhile, Ha said that instead of waiting CPs to provide good apps that network operators cannot make, the operators should set up a clear policy and offer an open playing field to encourage all people to join the app creation. Operators should encourage CPs to develop apps on their store. Only by that time, will the digital content market boom with many good apps.
As such, there always exists a big difference in the viewpoint of CPs and network operators about the profit sharing mechanism. Therefore, how to find a reasonable model for the business cooperation between CPs and mobile network operators remains a question for the future tense.
Buu Dien
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