Telecom Market sees Fiercer Competition

 

EVN Telecom officially launched E-phone and E-com in late 2005, which have been hailed by subscribers with features superior to services provided by VNPT. E-com, in particular, is wireless fixed telephone with short message (SMS) service. E-com is easy to install and can be used as a modem when it is connected with PCs. However, after around one year, E-com subscribers can send their SMS within EVN Telecom network and have not been able to send SMS to subscribers of VNPT’s Vinaphone and Mobifone, two mobile phone networks holding a dominant stake in Vietnam. EVN Telecom has tried to negotiate with VNPT to expand its connection and to provide maximum support and convenience of E-com and E-phone for its subscribers.

 

VNPT, however, has stated that EVN Telecom’s E-phone and E-com services are illegal. Telecom enterprises said that E-phone is a local mobile phone service with coverage like Cityphone of Vinaphone but EVN Telecom allows its subscribers to make long distance call. In the mean time, EVN Telecom considers E-phone a limited local mobile phone service and it is new service using new technology and does not affect activities of VNPT.

 

The problem is that VNPT considers it an illegal competition as charges of EVN Telecom are just slightly higher than Cityphone, around VND 600 per minute on a basis of six second blocks. This means EVN Telecom’s charge is much lower than charge of mobile phone services. Vinaphone’s lower charge for mobile phone service, for example, stands at VND 1,600 per minute. In addition, with E-com service, EVN Telecom allows subscribers move from district to district, even from province to province, but subscribers have to pay local call charge only.

 

Due to its priorities for users, VNPT has yet to allow E-com subscribers to send SMS to VNPT’s networks. Furthermore, even the two sides’ connection agreement in each province was signed for months, VNPT has just opened few gates for EVN Telecom to connect with.

 

VNPT explained E-com and E-phone services of EVN Telecom had operating areas violating the licence granted by the Ministry of Post and Telematics, leading to an unfair competition. Due to the fact that EVN Telecom’s fixed telephone service does not observe the connection agreement and the licence by the Ministry of Post and Telematics, the value added service of SMS for fixed telephone service of EVN Telecom has not been provided yet. VNPT also explained that VNPT is piloting SMS service for fixed telephone subscribers but the results have not been good enough. Therefore, SMS connection from fixed telephone to other networks should be carefully considered to avoid providing poor quality services, thus producing negative impacts on interest of customers.

 

Also according to VNPT, service connection has to be on a basis of connection agreements. Under the connection agreement between EVN Telecom and VNPT does not include a content of SMS service for fixed telephone. The two sides, in fact, have met to discuss EVN Telecom’s proposal of connecting SMS service of its fixed telephone with mobile phone networks of VNPT. However, EVN Telecom’s proposal was made on a basis of a connection structure of a mobile phone network with many technical contents unsuitable with the two sides’ connection agreement. VNPT has asked EVN Telecom to clarify the contents but it has not received any concrete information and proposal from EVN Telecom.

 

To settle the disputes between EVN Telecom and VNPT, the Ministry of Post and Telematics has asked EVN Telecom to stop its inter-provincial roaming, and to provide just local call services, like Cityphone said Le Nam Thang, deputy minister of post and telematics at a press conference. The ministry has given comments on operation of the E-phone service, which can be transformed into a national mobile phone service with a 096 network and asked EVN Telecom to submit its plans on charge, specification and regulations on calling regions. In case that EVN Telecom submits a new service, which is neither fixed telephone nor mobile phone, the Ministry will ask for further details about service specification, charge and operating areas.

EVN Telecom is accelerating the building of a plan for E-Phone service. Accordingly, E-Phone will operate as a regional mobile phone network. EVN Telecom will divide the Vietnamese territory into six regions, including North East, West East, Central Vietnam, South of Central Vietnam, the Central Highlands, and the South. Each region consists of a certain number of provinces and cities and each subscriber will be allowed to use the mobile phone service limited to each region without nationwide roaming.

 

Regarding the opening connection gates for EVN Telecom at post offices of provinces and cities of VNPT, the Ministry of Post and Telematics has asked EVN Telecom to give a list of localities, where connections remain stuck, to VNPT and report to the Connection Unit of the ministry. In case VNPT does not have enough volume for connection, it has to report to the Connection Unit for settling according to the existing regulations. The two enterprises have to complete the opening connection gates in July 2006. VNPT and EVN Telecom will have to complete their negotiation and report to the ministry before July 31, 2006, as well as to prepare economic and technical conditions to launch the service in early August, 2006.

 

In fact, whenever the Vietnamese market has a new telecom service supplier, disputes and the observation of agreements between parties have become hot topics for the press and the public. Users may have thought of convenience and services, as well as a low charge due to competition among suppliers but VNPT, finally, stabilises the market as they manages the whole telecommunication infrastructure system. However, only when Vietnam implements commitments on telecommunication services for its WTO accession, will people know who have the last laugh.