Will Viettel be listed as a Significant Market Power telco?

Will Viettel be listed as a Significant Market Power telco?

As the only telecom enterprise that holds the dominant market position, the military telco Viettel will be the only telecom service provider to have its service fee controlled by the watchdog agency.

Viettel has officially been listed by the Ministry of Information and Communication (MIC) as a Significant Market Power (SMP) enterprise in terms of voice, SMS and internet access.

As such, the other two large mobile network operators – MobiFone and VinaPhone – have ‘escaped’ from the SMP group and joined with Vietnammobile and Gmobile in the non-SMP group.

Some analysts warned that once MobiFone and VinaPhone, the two big players in the telecom market, are no longer under price control, they would have opportunities to grow rapidly and compete more effectively with Viettel.

In principle, no one wants to be put under the watchdog agency’s price control.

If they do, they will have to register their service fees with MIC every time when they plan to set up new service fees, and they can only apply new prices once they get the ministry’s nod.

SMP enterprises cannot set up their service fees lower than production costs.

Under the new circular, both MobiFone and VinaPhone will not have to register their service fees, and will be able to set service fees lower than production costs.

This will be a ‘formidable weapon” for them to vie for subscribers with Viettel.

Analysts commented that in the saturated telecommunications market, enterprises which can offer lower service fees will have great advantage over others.

The service fees applied by Viettel, VinaPhone and MobiFone have been for a long time.

However, the situation may be different in the future, as MIC has turned the green light on for VinaPhone and MobiFone to lower their service fees.

This could be the reason why deputy general director of Viettel, Le Dang Dung, has been insisting on keeping all three largest mobile network operators – Viettel, MobiFone and VinaPhone - in the list of SMP group.

Dung apparently wants MIC to keep the current management method and the list of SMP group unchanged.

A representative of Viettel at a recent meeting with MIC warned that if Viettel’s proposal is not accepted, there might be a “price war”.

Analysts also anticipate that many of Viettel’s subscribers would shift to MobiFone VinaPhone to enjoy better service fees.

Meanwhile, Deputy CEO of VinaPhone Nguyen Van Hai said though the new circular would allow VinaPhone to take initiative in doing business, “it will be not easy to compete with Viettel”.

vietnamnet