Competitors Unfaed by VNPT's Charge Cuts

Competitors Unfaed by VNPT's Charge Cuts

The main competitors of the Vietnam Post & Telecoms Corporation (VNPT)'s mobile phone services have turned away from the challenge of a pricing war following a VNPT rate cut on mobile charges.

The decision by VNPT to cut call charges on its two mobile phone networks, including Vinaphone and MobiFone, will only have limited impacts on the market, its competitors said.

VNPT's main competitor Viettel said the price reduction is simply a corporate routine, which has not yet reached the floor price set by the Ministry of Post & Telecoms. Therefore, Viettel has no short-term plans to cut its charges.

"We have taken this fact into account when planning our mobile service," said Nguyen Viet Dung, Deputy Director of Viettel Mobile Center, adding that Viettel's mobile rates are competitive compared with other networks. Viettel is the only one to charge VND139-149 per six second while VNPT charges VND800 per 30 seconds and S-Fone VND250 per 10 seconds.

"The military-run Viettel will focus on expanding its network and improve its customer service in the short-term, Dung said, without ruling out the possibility to cut rates in the long term.

Viettel plans to sign up 850,00 subscribers this year, raising its total number of subscribers to 1.05 million by the end of this year.

Meanwhile, S-Fone, the first CDMA mobile phone network in the country, remains muted about VNPT's move. A company spokesman said that the time is not ripe to talk about rate slashing since S-Fone service is quite limited, covering merely 5 per cent of the population.

Ho Cong Son, S-Fone Managing Director, said the company will focus on improving its services in the future by deploying advanced technologies such as digital video and conferencing services.

The market's newest networks such as VP Telecom owned by the Electricity of Vietnam and Hanoi Telecoms have not yet joined the race as VP Telecom is only involved in a pilot scheme in parts of central Vietnam while Hanoi Telecoms is planning to launch its CDMA network in the second quarter this year.

Market observers said mass rate reduction among mobile operators could have a negative impact on call traffic due to the limited ability of current mobile operators to handle large amounts of calls.

VNPT Deputy General Director Tran Manh Hung said there are about three million subscribers on Vinaphone and MobiFone networks, which are already highly vulnerable to congestion.

• VNS