Updated  
April, 06 2013 09:29:02

Mobile firms hike cost of 3G internet

HCM CITY (VNS)— Two leading mobile phone service providers, MobiFone and Vina-Phone, have decided to hike their fees for 3G packages for mobile internet by 25 per cent, from VND40,000 (US$1.9) to VND50,000 ($2.4) per month, beginning in April.

They cited financial losses to popular software like Viber, WhatsApp, Yahoo Messenger, Facebook Messenger, Skype and iMessage that allow smartphones to talk and send text free based on 3G connections (Over The Top – OTT services).

Use of OTT services comes mostly from foreign providers and is expected to cause losses of VND100 billion ($5 million) each month, around 9 -10 per cent of total turnover, for local telecommunication companies.

In a recent meeting, vice general director of Viettel, Nguyen Manh Hung, confirmed that OTT services posed a threat to local IT, telecommunications and television companies.

These local companies earn 80 per cent of their turnover from text, talk and television. However, these services are free in OTT services.

Free text and talk is also calculated to cause losses of 9-10 per cent turnover for global mobile service provider, with $13 billion a year in losses.

Figures from MobiFone show that 280,000 calls and 8.7 million text messages from 3.5 million users are made through Viber. This causes losses of over VND1 trillion ($50 million) per year for local service providers.

MobiFone and Vinaphone explained that another main reason for the fee increase is the huge investment needed for infrastructure to increase capacity.

The price for 3G services in Viet Nam is reported to be the lowest in the world, 40 – 90 per cent lower than other countries.

Mobile service providers have asked the Ministry of Information and Telecommunications to regulate ground prices of 3G packages for OTT services.

Despite the fee increase, the capacity for the 3G package has increased by 20 per cent only, from 500MB to 600MB.

Many customers have complained about poor quality of 3G connections in recent months.

Viet Nam has around 20 million 3G subscribers, mostly belonging to MobiFone, VinaPhone and Viettel.

With the new fee increases, mobile phone service providers are expected to take in a total of more than VND100 billion each month.

Recently, VinaPhone added more than 5,000 base transceiver stations (BTS) and increased its national BTS up to 30,000 and upgraded its network from 3G to 3.5G. — VNS


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