As the rise in many commodity prices shocked consumers, the continued slashing of telecom service charges is an action for the sake of users’ benefits.
A reverse race: service price cuts
There are two reasons for the above viewpoints. First is the imbalance in service prices offered by market leaders. The effective and flexible weapon used by mobile phone service providers is the recently issued Circular 02/BTTTT of the Ministry of Information and Communication, allowing telecom services to fix service charges. Although the service charge was reduced by 15 per cent at the end of 2007, Viettel still continued cuts. Its major rivals MobiFone and VinaPhone made even deeper cuts.
The second reason is that the Vietnamese mobile communication market, with some 30 million users, has not reached the saturation point, which is estimated at 50 million users by 2010. Thus, the 2008 to 2010 period is the telecom revolution and the most effective weapon is, of course, the service charge.
Market leader?
In 2007, the mobile phone service network Vietttel continued leading the mobile phone market. The vehicle to maintain high growth is systematic and long price adjustment policy. According to statistics, the service charges of MobiFone and VinaPhone are higher than those of Viettel by 9 to 12 per cent, for some services even 40 per cent. Especially, from March 8, 2008 to June 30, the service charge difference widened when Viettel applied incredible service charge cuts at free hours.
According to leaders of Viettel Telecom, the goal of this price cut is to bring long-term benefit to all clients and introduce mobile phone service to all people. On the other hand, via this reduction, Viettel Telecom also affirmed its market leadership in the Vietnamese mobile phone service industry. Notably, this service charge cut took place after many months of promotion programmes, in which no reduction was made. Viettel’s post-paid service fee continued to be the lowest on the market. Being the largest mobile phone service network in Vietnam with nearly 40 per cent of market share, Viettel’s service price cut will affect the entire market of Vietnam.
After Viettel’s move, the Vietnam Posts and Telecom Group (VNPT) proposed new service charge reductions for VinaPhone and MobiFone, because they usually have smaller reductions than Viettel, typically coming later.
With a population of more than 80 million people and a GDP growth rate of over 8 per cent, the Vietnamese telecom market continues to hold much potential for mobile communication service providers. In the coming years, if all networks continue the service price cut race, competition will be much fiercer. However, service quality, the diversification of value-added services and customer care will play crucial roles.
Huong Ly
Vietnamese
