Vietnam's big telcos probed over dubious 3G fee hike

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The Ministry of Industry and Trade is investigating accusations that Vietnam's three biggest telecom companies violated competition laws with their latest hike of 3G tariffs, which has drawn widespread criticism.

Tran Anh Son, deputy chief of the ministry's Vietnam Competition Authority, told a meeting on Thursday that his agency had asked Vinaphone, MobiFone and Viettel to provide information related to their price hike. 

Son said his agency will clarify if the businesses violated the Law on Competition as accused, adding that if they are found in violation, they will submit 10 percent of their sales from the previous fiscal year in fines.

On Wednesday, the 3G suppliers that hold 97.3 percent of the market share increased their tariffs from VND50,000 to VND70,000 a month, under Ministry of Information and Communication approval.

However, experts said as dominant suppliers, the companies violated the law by increasing their fees at the same time.

They also said that the law does not allow dominant companies to increase their prices by 5 percent each time, but some of the 3G packages offered by the companies saw a rise of 20 percent following the latest increase.

On the other hand, Nguyen Duc Trung, deputy chief of the Ministry of Information and Communication's Telecommunication Department, told the meeting that the latest fee adjustment was "necessary."

Trung said most of telecom devices in Vietnam were imported, and their prices account for over 80 percent of 3G suppliers' costs.

Meanwhile, 3G tariffs in Vietnam are lower than those of other countries, and despite the latest adjustment, they are just about 39.6 percent of those in other ASEAN member states, the official said.

Vietnamese laws regulate that telecom tariffs are identified in accordance with costs, the relationship between supply and demand in the market, and their correlation with those in other countries, he stressed.

"Given the [low] tariffs before the hike, it is necessary for the companies to increase their fees," Trung said.

He also said that if the market does not fluctuate largely, 3G suppliers will continue rising 3G tariffs in the future, as they proposed with the ministry, to ensure the tariffs are not lower than costs, and the market develops steadily.

According to the telecom companies, they had to increase their fees, since 3G tariffs in Vietnam were among the world's lowest, and without the hike, in the long term, they could not make profits for further capital expenditure.

They made a similar claim when increasing the fees for the first time this year in April. At that time, the monthly tariff was up from VND40,000 to VND50,000.

But, the claim failed to convince the public and experts who said that although 3G fees in Vietnam are lower than in many other countries, the per capita income in Vietnam is also much lower.

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Moreover, despite the hikes, the companies have failed to provide their customers with quality services.

A survey by The Vietnam Post News and Nielsen in Ha Noi, Ho Chi Minh City, and Da Nang last May found 45 percent of the country's 3G subscribers unhappy with the service quality.

According to the Ministry of Information and Telecommunication, Vietnam now has around 20 million 3G subscribers.

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