54 million Viettel subscribers will soon enjoy low rates

Viettel is proposing to the Ministry of Information and Communications to reduce the cost of international calls to the same level as domestic calls. If Viettel can prove that it does not sell below cost, the proposal will likely be approved and the 54 million subscribers of this network will benefit.

If Viettel's rates are reduced, millions of poor people will be the biggest beneficiaries.

Viettel does something "unconventional" again

On July 7, 2014, Mr. Hoang Son, Deputy General Director of Viettel, proposed to the Ministry of Information and Communications to reduce mobile phone call rates. Accordingly, Viettel requested the Ministry of Information and Communications to apply a one-price policy without distinction between internal and external networks.

Currently, the price of domestic calls for prepaid subscribers is 1,466 VND/minute and for inter-network calls is 1,651 VND/minute. Similarly, the price of domestic calls for post-paid subscribers is 990 VND/minute and for inter-network calls is 1,200 VND/minute. Thus, with the proposal to reduce inter-network calls to the same level as domestic calls, it means that mobile calls will decrease by 12.6%.

This decision by Viettel was quite surprising because the network operator was under pressure to increase revenue in the context of mobile subscribers starting to saturate. Most mobile networks set quite modest subscriber growth figures, and most of them shifted to retaining more subscribers. After mobile networks increased 3G fees last year, many people thought of the scenario of increasing fees rather than reducing fees at this time. Thus, Viettel's decision at this time is considered by many to be "contrary".

Mr. Hoang Son said that Viettel's proposal to reduce the price of calls to other mobile networks aims to stimulate consumption and support customers better in using the service. In fact, customers often tend to call within the network because the price is cheap, and rarely call outside the network because they think the price is expensive. Therefore, to stimulate consumption, Viettel proposed that the Ministry of Information and Communications allow the application of one price regardless of whether it is within the network or outside the network.

"Viettel's statistics show that nearly 80% of networks in the world do not differentiate between domestic and foreign network charges. The tendency to differentiate between domestic and foreign networks only appears in poor countries, and the more developed the country, the more it tends to have a single price," said Mr. Hoang Son.

54 million customers waiting for fare reduction

Mobile networks believe that with the current subscriber size and the removal of off-network fees, Viettel will suffer the biggest revenue loss among mobile networks. According to Viettel's estimates, if the Ministry of Information and Communications agrees to allow Viettel to apply the same price policy as domestic calls for all domestic and off-network calls, Viettel will initially lose about 80 billion VND per month.

"I hope that this policy will help customers easily remember the price and proactively manage the cost of using their services each month. In the short term, if this policy is applied, Viettel's revenue will decrease, but we hope that when the call rate is reduced, it will stimulate consumption and hopefully this move will increase revenue for the network," said Mr. Hoang Son.

Viettel currently has about 54 million mobile subscribers and is the mobile network with the largest number of subscribers today, accounting for about 50% of mobile subscribers in Vietnam. If this policy is approved by the Ministry of Information and Communications, it means that about 50% of mobile subscribers in Vietnam will have their rates reduced. This will certainly put pressure on other networks to respond to Viettel's rate reduction.

Regarding this proposal of Viettel, Mr. Pham Hong Hai, Director of the Department of Telecommunications (Ministry of Information and Communications) said that the Ministry will ask Viettel and other telecommunications enterprises to report the cost of mobile services. This will be the basis for the Ministry of Information and Communications to approve the proposals of network operators on adjusting the rates because the rates must be built on the basis of cost. Basically, enterprises have the right to be proactive in pricing, as long as they do not sell below cost.

Meanwhile, a representative of Viettel affirmed: "With the proposed reduction of about 12.6% in voice service fees, Viettel will not sell below cost. Viettel will send a report to the Ministry of Information and Communications with specific figures so that the Ministry of Information and Communications can soon approve this proposal."

Thus, if Viettel has enough data to report not selling below cost with the proposal to unify domestic and international rates, this will be good news for the 54 million subscribers of this network.

According to Hanoimoi