Vietnam: Increasing price competition is seen in the mobile market as operators try to increase their share

[VN Agency] The nation’s leading cell phone providers are cutting service charges in an effort to widen their market share.

The military-run telecommunications firm Viettel Telecom reduced its service charges by up to 30 per cent on June 1.

The new subscription fee for post-paid users has fallen from VND59,000 to VND50,000 per month.

The cost for inter-network and extra-network calls for post-paid users has also been slashed by VND100 per minute to VND990 and VND1,090 per minute.

For prepaid subscriptions, the charges have dropped between 10-30 per cent.

Nguyen Viet Dung, deputy director of Viettel, said the campaign was launched to help clients in the face of an economic downturn and to attract new subscribers.

One day after Viettel, the State-owned Mobifone said it would apply new service charges starting from June 3, with fees even lower than those offered by Viettel.

Mobifone’s subscription charges have dropped to VND49,000 per month, and the cost of inter-network and extra-network calls are VND10 lower than Viettel’s costs.

Le Ngoc Minh, Mobifone’s director, said with the new charges Mobifone hoped to have an additional 5 million new users, raising its total subscribers to 40 million by the end of the year.

Customer care

"When service charges offered by telecom providers are similar, service quality and customer care will decide the success of telecoms companies in the competition to attract new customers," Minh said.

Speaking with Sai Gon Giai Phong Newspaper, Pham Ngoc Tu, deputy head of the State-owned Vinaphone’s business section, said Vinaphone also plans to cut its service charges in the next few days.

The reduction rates are expected to equal those of Mobifone.

Nguyen Xuan Quan, deputy general director of VietnamMobile, said before June 1 the call charges offered by his company were seen as the most competitive. But now the charges are similar to Viettel and MobiFone.

Quan said the company would evaluate rivals’ charges before making any changes.

Representatives from EVN Telecom and S-Fone say their businesses would be badly affected by lower prices because service prices were nearly equal with production costs.

Cutting service charges by giant mobile phone providers would benefit tens of millions of customers, creating pressure on other telecom companies, according to analysts.

With the dominance in the number of subscribers and network coverage, Viettel, MobiFone and VinaPhone have many advantages.

Le Doan Hop, Minister of Information and Communications, predicted that there will be a merger between domestic mobile phone service providers in the near future.

Mobile service providers start new pricing war