Network operators are about to increase 3G service prices

According to network calculations, Vietnam's 3G is 10 times cheaper than China's and 40 times cheaper than European countries.

According to calculations by Vietnamese mobile networks, this service is being sold for only 35 to 65% of the service cost.

Vietnam is among the countries with the cheapest 3G in the world.

With only 50,000 VND/month, mobile subscribers can comfortably use unlimited 3G packages of MobiFone, VinaPhone and Viettel. This is a reasonable price for mobile subscribers using 3G services. According to calculations by Vietnamese mobile networks, 3G in Vietnam is about 10 times cheaper than in China and about 40 times cheaper than in European countries.

With only 50,000 VND/month, mobile subscribers can comfortably use 3G packages.

Deputy Minister of Information and Communications Le Nam Thang commented that 3G rates in Vietnam are currently among the cheapest in the world, while the quality still meets almost all people's needs. For comparison, in a country very close to Vietnam like Thailand, food prices are very cheap but mobile and 3G rates are high. This is the opposite in Vietnam because mobile rates are much lower compared to the average food and living expenses.

However, behind the low price, there is a problem that seems to go against the market when mobile networks simultaneously sell 3G below cost. The cause of this problem is explained by Viettel that when network operators started investing in 3G networks, in the early stages of development, to stimulate demand for the new service, many network operators reduced the price below cost.

Mr. Nguyen Manh Hung - Deputy General Director of Viettel said: "When the 3G network was born, network operators in Vietnam calculated the cost based on marginal value because they thought that 3G would create a new source of revenue besides the revenue from the 2G network and only used the additional cost to calculate the cost. Up to now, 3G has gradually replaced 2G and all the costs for 2G are "borne" by 3G, so network operators have to consider increasing 3G prices".

Agreeing with this view, MobiFone and VinaPhone said that 3G is being sold below cost. According to mobile networks, if calculated, the non-promotional 3G price is only about 30-50% of the cost. Thus, if 3G prices are not increased, network operators will no longer have the resources to reinvest in network development and expand 3G coverage. Once they cannot profit from 3G, network operators will not be able to think about investing in 4G in Vietnam.

Increasing 3G rates is a must

In response to the proposal of mobile networks, Deputy Minister of Information and Communications Le Nam Thang pointed out that the gradual increase in 3G rates based on cost is an inevitable trend. In the early stages of 3G service deployment, to attract users and stimulate market demand, businesses had to sell below cost, offering very cheap rates.

At the same time, the Ministry has not yet managed the price to create conditions for market development. But at this point, when the number of subscribers and the rate of 3G usage increase sharply, businesses need to adjust the price to approach the cost.

Deputy Minister of Information and Communications Le Nam Thang added that the main reason why network operators have to increase 3G rates is not because of OTT but because this service is being sold below cost.

The 3G network can be likened to a newly built road. At first, when there were few people traveling, the road was wide and could be free or charged a low fee. Now that there are many people traveling, the fee must be higher to ensure there is funding for reinvestment.

"In the telecommunications sector, people have long been accustomed to prices going down or staying the same. Now that other service costs such as electricity, water, etc. are increasing, telecommunications fees must also increase or decrease according to market mechanisms like other service sectors. Consumers need to gradually get used to the concept of increasing/decreasing telecommunications fees, 3G fees are normal in business," Deputy Minister Le Nam Thang analyzed.

Ms. Le Thi Ngoc Mo - Deputy Director of the Department of Telecommunications shared her opinion: "The Ministry of Information and Communications does not support or force telecommunications enterprises to sell services below cost but must sell at the correct cost. Increasing 3G fees is also an opportunity for network operators to increase business opportunities."

Thus, it is only a matter of time before mobile networks increase 3G rates to not be below the cost as required by state management agencies. However, customers are also waiting for an answer from the network operators on whether the increased rates will give customers the right to use better quality 3G services or not?./.

According to vov.vn - LT