Telecom market does not follow market economy rules

Thursday, Feb 27, 2014 17:43

MobiFone will separate from the state-owned Viet Nam Posts and Telecommunications (VNPT), according to a restructuring plan for the Vietnamese telecom market. Photo

HA NOI (Biz Hub) — The Ministry of Information and Communications submitted a restructuring plan for the Vietnamese telecommunications market to the Government early this year.

Major mobile network operator MobiFone will separate from the State-owned Viet Nam Posts and Telecommunications (VNPT). This has raised concerns for small telecom providers and customers.

Nguyen Trung Chinh, general director of CMC Joint Stock Corporation, shared his opinions on the plan with the online newspaper Tri Thuc Tre.

Nguyen Trung Chinh, general director of CMC Joint Stock Corporation. Photo thoibaonganhang

What do you think about the telecom market and its impacts on telecom enterprises?

Some people say that the market is very competitive and positive, but I think it lacks freedom and does not follow the rules of the market economy. It has been shown that big companies, accounting for 30 per cent of the market, will lean on their leading position, or compete by offering prices lower than the cost. These activities violate the competition law.

The telecom prices in Viet Nam are relatively cheap, but they do not follow the market economy rules. In your opinion, if there is real competition in telecom, will customers have to pay more?

It is not true that cheap prices are always good. If the prices are cheap but the quality is bad, it means that it is not good. In a market economy, the enterprises having monopoly status are not allowed to serve with prices lower than the cost. In reality, we have seen 3G internet connection prices and their quality. The 3G price hike does not improve the quality which users don't expect. If it is fair competition, the users always take advantage of it. Firms offering products with the highest quality and best prices will win the market.

Do you think that MobiFone will be weakened after the restructuring plan? What does the capitalization of MobiFone mean for creating a competitive market?

In general view, the restructuring of State-owned enterprises including VNPT is needed for the sake of nation, for the sake of its people and to adhere to Vietnamese laws and international laws. The telecom restructuring plan must abide by the market economy rules, including respecting free competition and developing people's interests. With these goals, it needs to decrease the percentage of state-owned firms (which now account for 94 per cent) to end the monopoly. This will make the market healthier. Restructuring MobiFone or VinaPhone to reach these targets fast and effectively should be an option.

Can you tell us about the opportunities for CMC and other small enterprises if the telecom market expands?

The opportunities for cooperation and development are very difficult in a market with two State-owned firms which account for 95 per cent. CMC has not had any plan to invest in the wireless phone network. The strong development of 4G and new technology will be a trend in Viet Nam and in the world in the future. CMC has enough conditions, abilities and opportunities for taking part in this area. A fair and competitive environment will be a point of support for information technology firms to invest and develop further. — VNS

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