Vietnam - Small network losing their shirt because VNPT raises BTS leasing fee

VietNamNet Bridge – Hanoi Telecom, which is running Vietnamobile, has lodged a complaint to the Ministry of Information and Communication MIC about the decision by VNPT (the Vietnam Post and Telecommunication Group) to unexpectedly raise the BTS (base transreceiver station) leasing fees by 110-562 percent, which would push the small network into bankruptcy.

In the document sent to MIC, Hanoi Telecom said that the fees charged by VNPT are overly and abnormally high.

A representative of Hanoi Telecom said the enterprise has followed the instruction of the government and MIC to share the same infrastructure system with other network operators--to take full advantage of the national resources and practice thrift.

Hanoi Telecom has been sharing 922 BTS with other networks, including 293 BTS owned by VNPT. In late 2011, Hanoi Telecom received a dispatch from some subsidiaries of VNPT, informing about the infrastructure leasing fees, commencing from January 1, 2012.

The BTS fee (code 248018) has seen the sharpest increase. Prior to January 1, 2012, Hanoi Telecom had to pay 8.161 million dong a month in leasing fee, while the figure has risen to 91.72 million dong a month.

Meanwhile, the station leasing fee (code 246002), which was 11.11 million dong a month, has jumped to 74.47 million dong. Only after Hanoi Telecom negotiated about the prices, VNPT has agreed to reduce the fee by 50 percent.

However, the fees have become unbearable for Hanoi Telecom since they have increased by 2-6 times.

“With the new leasing fees, we have to pay up to 50 million dong a month for some stations, or 600million dong a year. The sum of money is enough for us to build one new station, while no need to lease stations from others,” the representative said.

He went on to say that VNPT’s subsidiaries have raised the leasing fee spontaneously, not considering actual expenses. Especially, the move by the group comes contrary to the government’s policy to encourage network operators to share the same infrastructure items stipulated in the Telecommunication Law and relating documents.

In fact, increasing leasing fees proves to be inevitable, since all input costs have increased, from materials, electricity to the labor cost. However, the increases are still believed to be overly high and unbearable.

Meanwhile, VNPT itself also benefits from sharing BTS with other networks. While the fees for leasing premises to install BTS remain unchanged, it is unreasonable if VNPT raises the BTS leasing fee.

Meanwhile, VNPT still has been insisting on the leasing fee increases, saying that Hanoi Telecom, or any other else, has the right to decide whether to share the infrastructure, and that the leasing fees are negotiable.

Vu Tien Duong, a senior executive of VNPT said VNPT has allowed its subsidiaries to define leasing fees themselves, and that the subsidiaries have to raise the fees because the electricity and premises prices all have increased.

“If Hanoi Telecom does not want to lease VNPT”s stations, it can use the stations of other enterprises. Not only VNPT has BTS,” Duong said.

“VNPT itself has to pay 7-8 times higher to lease electricity poles to hang cables,” he explained.

Pham Hong Hai, a senior official of MIC said the ministry does not control the infrastructure leasing fee. However, if necessary, the ministry would consider specific cases to prevent unhealthy competitions.

Hai also said MIC still needs to learn more about the case to find out if the higher fees are applied to all, or just some BTS.

Source: Buu Dien

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