The joining of
many telecom companies to the FTTx (Fiber To The x) market has created a stiff
competition among service providers in terms of charges, infrastructure and
service coverage.

There
are seven Internet Service Providers ISP now in the market, including VDC,
Viettel, FPT Telecom, NetNam, SPT, EVN Telecom and CMC TI. Of these, FPT
Telecom was considered the pioneer when it launched the service into the market
in 2006. Experts believe that the stiff competition would be a driving force
which helps develop the market and make FTTx services replaceable for Internet
ADSL in the near future.

With
many advantages, FTTx has caught the special attention of clients-businesses.
However, it has a big disadvantage that the charges are at overly high levels.

Competition will lead to charge
decreases

Pham
Thanh Duc, Deputy General Director of FPT Telecom, said that there are many
service providers in the market. However, the market is being dominated by the
three big ISPs FPT Telecom, VNPT (the Vietnam Post and Telecommunication Group)
and Viettel.

According
to Duc, the FTTx service fees remain high which only fit enterprises, while
most of the clients of FPT Telecom are in big cities like Hanoi, Hai Phong, Da
Nang and HCM City. Service providers have to charge high service fees because
they have to spend big money on infrastructure and terminal equipment. Besides this, big barriers have been
installed by the relying on the equipment foreign supplies and the limited
awareness of clients about Internet applications.

Duc
thinks that FTTx service fees would only begin going down after 3-5 years.

The
British market survey firm BMI has released a telecom market survey for the
second quarter of 2011, saying that FTTx service charges remain high, but they
will be decreasing gradually in the next five years. ISPs have been competing
with each other by offering diversified service packages, which have made
service fees adjusted regularly. Besides, the profits from FTTx services are
big enough to allow ISP to ease the charges

According
to BMI, together with the competition among service providers, the demand of
consumers for added value services based on broadband technology like IPTV, Video
Conferencing and Video on Demand would serve as the driving force helping
Vietnam increase the broadband connections. The market survey firm believes
that the demand for broadband connections from personal computers would
increase by 20-30 percent by 2015, which will make FTTx become more popular.

In
2006, when FTTx was launched into the market, FPT Telecom offered four service
packages for FTTH (Fiber to the Home) with the capacity of 4Mb, 8Mb, 16Mb and
20Mb per second which have the monthly subscription fees of 3 million dong, 6
million, 12 and 15 million dong and the initial installation fee of 8 million
dong.

Currently,
the company is offering six packages with the capacity of 25 Mb, 30Mb, 35 Mb,
45 Mb and 65 Mb per second and the monthly subscription fees of 1.2, 2.5, 3, 6.
15 and 3 million dong. The figures show that while the installation fee does
not change, the service fees have decreased, while the capacity for users has
increased.

In
general, the lowest fee consumers have to pay for FTTH has decreased by a half,
from 3 million dong to 1.5 million dong.

Especially,
VDC has announced that it has increased the capacity since May 1, while it
keeps the service fee unchanged. With the latest decision, consumers will have
to pay 700-900,000 dong for the smallest service package of FiberVNN service.

Spending more money on building
infrastructure

Not
only competing in prices, ISPs have to spend more and more money in order to
build and upgrade the infrastructure. Since April 2010, FPT Telecom has increased
the bandwith of the fiber Internet service packages to 30 Mb per second at the
lowest, and 65
Mb per second at the highest. The company not only builds infrastructure in big
cities, it has been trying to provide services in 38 cities and provinces
throughout the country.

VDC
said that 2010 was a successful year for VDC, though it only began providing
fiber Internet services in May 2010. By the end of July 2010, VDC had had 11.7
million ADSL and FTTx subscribers.

Bui
Quoc Viet, the spokesman of VNPT, the owner of VDC, said it will make heavy
investment in the fiber infrastructure in the next years. Meanwhile, Viettel
said it is now ready to provide services to 115,000 clients.

Source: TBVTSG