3 Vietnam telcos hike 3G fees -- again

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Three telecom companies have hiked 3G tariffs for a second time this year, with rates for the largest package going up by a whopping 40 percent.

Vinaphone, MobiFone, and Viettel, the three leading telcos which hold more than 95 percent of the market share, have raised the monthly tariff from VND50,000 to VND70,000 with effect from October 16.

An "economy package" for students has been increased by around 43 percent to 50,000.

In April they had hiked the monthly tariff from VND40,000 to VND50,000.

Just like the previous time the firms said the hike was necessary since 3G fees in Vietnam were among the world's lowest, and without it, in the long term, they cannot make profits for further capital expenditure.

According to figures released by the firms, 3G fees in the country are a 10th of the tariffs in China and a 40th of those in Europe.

The companies got permission from the Ministry of Information and Telecommunications to raise the fees though only by 20 percent.

Pham Tien Thinh, a telecom expert, told Vietweek that although 3G fees in Vietnam are lower than in many other countries, the per capita income in Vietnam is also much lower.

"They [the three firms] should not use it as an excuse for the hike."

The companies said their average hike was only 20 percent as allowed by the ministry.

According to the Ministry, Vietnam had around 16 million 3G subscribers late last year, five times the figure in 2011.

Now there are around 20 million.

If around half of the subscribers continue to use 3G services by paying an additional VND20,000 a month, the three telcos will earn a combined VND200 billion (US$9.47 million) per month.

There are six telecom companies in Vietnam, but since Vinaphone, MobiFone, and Viettel hold more than 97 percent of the 3G market share, consumers virtually have no option but to accept the rate increase.

Economist Ngo Tri Long said the fact that the three firms hiked their fees at the same time is a sign of cartelization.

The Vietnam Competition Authority and the Ministry of Finance's Price Management Department should quickly investigate if they colluded to fix the prices.

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.

While 92 percent of considered connection speed crucial, only 55 percent were satisfied with it last year, down from 64 percent in 2011.

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