Did Ministry intervene unnecessarily in telcos’ operations?

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VietNamNet Bridge - The Ministry of Information and Communication (MIC) has told Vietnamobile, a mobile network operator, to stop providing its Thanh Sim service package, which has been described as ‘super cheap’.

vietnam economy, business news, vn news, vietnamnet bridge, english news, Vietnam news, news Vietnam, vietnamnet news, vn news, Vietnam net news, Vietnam latest news, Vietnam breaking news, 3G service, Thanh Sim, MIC

In January 2018, Vietnamobile launched the Thanh Sim networking kit

In early January 2018, Vietnamobile launched the Thanh Sim networking kit for VND40,000. Buyers immediately have 4GB of 3G data to use daily, or 120 GB a month. To continue enjoying super-cheap data services, buyers only have to deposit VND20,000 into their accounts. 

The fee for voice calls, just VND680 per minute, is the lowest in the market. 

Two months after launch, on March 5, MIC’s Telecommunication Agency said Vietnamobile should stop providing services because ‘there are signs of violating regulations on telecommunications fee management’.

Decree 25 on telecommunication fee management stipulates that dominant telcos have to register service fees with telecommunication management agencies and must not set the service fees at levels lower than production costs. 

Decree 25 on telecommunication fee management stipulates that dominant telcos have to register service fees with telecommunication management agencies and must not set the service fees at levels lower than production costs. 

Other telcos have the right to determine service fees and inform them about the fees to state management agencies.

A telecom expert said that Vietnamobile is not a dominant enterprise in the market (it only holds 2.3 percent of the 3G service market) and is not in violation. 

Meanwhile, Vietnamobile fulfilled administrative procedures as required when it sent a dispatch about the Thanh Sim package to the Telecommunication Agency in January.

The decree stipulates that telcos must not provide services as the prices are too low compared with the average price in the telecom service market.

If the telecommunication service fees change, causing uncertainty in the market, damaging the legitimate rights and interests of service users, teleco enterprises and the State, MIC will instruct state management agencies to take action to stabilize service fees.

However, the expert said that Vietnamobile would not be in violation of regulations if it can prove its prices are not too low in comparison with the average price and are not causing uncertainty in the market.

Ngo Tri Long, a pricing expert, said not all the prices lower than the average market price would be considered dumping.

Meanwhile, Vu Dinh Anh, a renowned economist, said that MIC has deeply intervened in the market, causing difficulties for new enterprises that have to launch sale promotions to join the market.

Speaking about the newly released policy (which says telcos can offer no more than 20 percent of service value as a bonus to prepaid users), Anh said this would hinder market development.

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