Fees deter use of faster IT cable

Saturday, Feb 22, 2014 11:39

A teacher at Hoa Bac Primary Schooll in central Da Nang City's Hoa Vang District uses Viettel's 3G service to access the internet. Service providers that can provide services at a reasonable fee will be the winners in the market. — VNA/VNS Photo Minh Tu

HA NOI (Biz Hub)  — Although FTTH (fibre cable) is considered to provide the best access to the Internet, it is still not the choice of the majority of the people in Viet Nam.

The latest survey conducted in Ha Noi and HCM City, the two largest FTTH service markets in Viet Nam, has found that only 7 per cent of the businesses use FTTH. This is low compared to 37 per cent in the Republic of Korea, 21per cent in Hong Kong and 50 per cent in Singapore.

FTTH has been used in Viet Nam for seven years. From the beginning, it was believed FTTH would replace ADSL technology because it allows users better access to Internet-based facilities, such as watching films or TV programmes and playing games.

However, it appears that FTTH will take longer than initially expected to become popular. One of the greatest barriers that keep clients away is the high fee.

Although mobile network operators are trying to encourage people to use FTTH by offering discounts, the number of users has not seen a considerable increase. People believe that the FTTH service fee is still not low enough, while the ADSL service fee is "acceptable."

According to analysts, another problem is that the products are not diversified enough to satisfy different groups of customers. FTTH has been automatically understood by people as "luxurious" or "high-end" service, which is reserved only for major enterprises with strong financial capabilities.

The monthly subscription of millions of Dong has proven to be unaffordable to most Vietnamese families. Therefore, most of them still use ADSL even though they know that the ADSL era is coming to an end. Despite the low percentage of FTTH service subscribers, telecommunications companies still believe they can grow in the home market.

Analysts have commented that the service provider that can provide services at a reasonable fee will be the winner in the market.

At a workshop on the future of the Internet economy held in late 2013, experts said ADSL will not be able to host the services of the future due to its low and unstable quality.

The question then raised was "Which technology would replace ADSL?" Two options were predicted: FTTH with its advantages or Internet on the TV cable system.

FTTH could prove to be the perfect solution, except for the high service fee. If that issue can be resolved, FTTH will be the service of choice among Internet users.

In fact, telecommunications companies are forging ahead with their plans to target the middle class and individual clients instead of focusing on high-income earners as they did previously.

The military telecoms company Viettel is the pioneer in popularising the FTTH service. The subscribers of Eco FTTH of Viettel now pay VND350,000 (roughly US$16.58) per month to use the 12 Mbps bandwidth, just a little higher than the ADSL subscription fee.

Other large companies are also likely to join the race of lowering service fees soon, which will heat up the FTTH market. — VNS

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