Ineffective and small-sized telecoms companies would be allowed to carry out merger and acquisition in line with the market mechanism, according to a draft plan to develop the national telecoms industry through 2020.
The draft, compiled by the Ministry of Information and Communications (MIC), is expected to make the telecoms sector more dynamic by laying down a clear regulatory framework.
While allowing merger and acquisition of ailing businesses, the State would strictly control dominant telecoms firms.
The draft also refers to equitization of telecoms firms as a method to create more incentives for private enterprises to invest in telecommunications development. Accordingly, the State would divest its capital from telecoms businesses in which it did not hold majority stocks. Restructuring telecoms companies managed by state-owned Vietnam Post and Telecommunications Group (VNPT) is also mentioned in the draft.
The draft affirms that the State would not limit the number of enterprises engaged in the telecoms market. Particularly for some important telecoms services such as domestic fixed long distance, international, mobile and broadband internet services, there would be at least three service providers. However, measures would be taken to assure a reasonable number of players in the telecoms market.
So far, nine companies have been licensed to establish telecoms networks. State-run enterprises in the sector include VNPT, Viettel, Indochina Telecom, GTel, and Vishipel.
In another attempt to prevent predatory pricing and unfair competition in the domestic telecoms market, Deputy Minister of Information and Communications Le Nam Thang has asked the Telecommunications Authority to draft a circular to govern telecoms service charge rates.
Thang said that the circular would set floor prices for mobile phone services to prevent unfair competitive practices in the form of sales promotions.
Pham Hong Hai, director general of the Telecommunications Authority, said the lack of specific rules on mobile rates, including benchmark rates, made it difficult to manage the telecoms market.
Some smaller mobile service providers, e.g., Beeline, had continued offering sales promotions believed to be illegal, said Hai. Beeline, operated by Russian telecommunications giant VimpelCom, last year launched a promotion campaign called the “billionaire” calling plan. By paying a small sum monthly, subscribers using “billionaire sim cards” would receive up to VND 1 billion (US$47,620) on their accounts, giving them the ability to make calls for up to 10 years without limitations.
Beeline has countered that if it didn’t offer aggressive promotions, it would face challenges in developing its customer network and expanding its market share in an increasingly saturated market.-