Carriers receive 3G rate hike approval

Saturday, Oct 12, 2013 11:25

A Vinaphone customer seeks information on the 3G network in Ha Noi.— VNS Phot Truong Vi

HA NOI (Biz Hub) — The Ministry of Information and Communication gave mobile operators the green light on Friday to raise 3G prices by 20 per cent.

Last week, Vinaphone, MobiFone and Viettel – the country's three biggest mobile carriers, which control 95 per cent of the market – said the price increase was necessary because they were suffering losses from the cost of offering 3G services.

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

"At the beginning, we set a low 3G tariff to attract subscribers to fill the network's bandwidth, but as the number of users has increased substantially, we now have to raise our prices," he said.

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.

Operators said that the need to raise 3G fees was not related to over-the-top (OTT) services such as Viber and Kakao Talk, which offer free phone calls and text messages.

However, industry insiders said OTT was estimated to cause losses of VND100 billion ($5 million) each month for local telecom companies, around 9-10 per cent of their turnover.

These local companies earn up to 80 per cent of their turnover from texts, phone calls and television, which OTT services offer free of charge.

Free texts and calls are also expected to cause losses of 9-10 per cent for global mobile service providers, equivalent 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, causing losses of over VND1 trillion ($50 million) a year for local service providers.

Meanwhile, 45 per cent of the country's 3G subscribers are dissatisfied with service quality, according to a survey by Viet Nam Post and Telecom newspaper and international market researcher Nielsen in Ha Noi, HCM City and Da Nang.

While 92 per cent of 3G users surveyed considered connection speed crucial, only 55 per cent were satisfied with the quality of 3G in 2012, down from 64 per cent in 2011.

Many complained about the lack of capable hotline staff, with 14 per cent of 3G users unsatisfied with the quality of customer service.

In a finding that may raise concern about the upcoming increase, 66 per cent of 3G users were satisfied with service tariffs and 79 per cent thought billing was accurate. 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, but the same number of respondents said there should be more. — VNS

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