VTC takes no action towards virtual
network

On June 22,
2010, the Ministry of Information and Communication officially granted the
license to operate a mobile virtual network to VTC. The license stipulates that
VTC will provide mobile services on the basis of 3G network infrastructure of
EVN Telecom. Besides, VTC Digicom, a subsidiary of VTC, said VTC will considering
roaming with 2G networks in order to expand the coverage and provide services
to the places, where EVN Telecom’s 3G networks has not reached out. Right at
the license granting ceremony, VTC promised to officially begin providing
services by the end of 2010 nationwide.

However, to
date, VTC Digicom still has not “thrown its troops into battle”. At the latest
working session with the Electricity of Vietnam, VTC said no progress has been
made in the implementation of the virtual network between VTC Digicom and EVN
Telecom. The noteworthy thing is that VTC now does not urge EVN Telecom to kick
off the virtual network, while it has put forward the idea of teaming up with
EVN Telecom to establish a company specializing in infrastructure leasing. The
moves show that virtual network is no more the important business plan of the
enterprise.

Meanwhile,
EVN is now busy with the plan to equitize EVN Telecom and sell stakes to FPT.
Analysts say that “the matter of allowing VTC Digicom to use EVN Telecom’s
network infrastructure will be put on the table, and FPT surely does not want
to have one more rival in the market which has been very stiff already.”

The
analysts have also pointed out that in current economic conditions, it will be
a hard decision for network operators to spend thousands of billions dong to
develop a virtual network, while the future remains unclear. Meanwhile, in
order to compete with each other, mobile network operators have slashed the
mobile service fees continuously, which have come closer to the production
costs. This means that it will be very difficult to negotiate with the
suppliers who have network infrastructure, so that the two sides can reach an
agreement on reasonable wholesale prices.

In other
words, analysts say they still cannot see any good opportunities for virtual
networks. Therefore, it is understandable that people do not expect the market
joining of VTC.

Two scenarios for Dong Duong Telecom

Unlike VTC,
Dong Duong Telecom seems to be determined to join the market after a one-year
delay. A manager of Dong Duong Telecom has revealed that the company will begin
providing services by mid-2011.

Though
being a new comer in the telecom market, Dong Duong Telecom still has big
advantages. Especially, it has the right to use “golden prefix numerals” for
mobile subscribers - 0998 and 0999 (people like these numerals because they are
easy to remember. 9 is also considered a lucky number for Vietnamese people).
Besides, Dong Duong Telecom can use the mobile network of Viettel to provide services.

Currently,
Viettel is considered the network with the biggest 2G and 3G infrastructure.
Especially, Viettel’s 3G network is considered the biggest in ASEAN countries.

As such,
there is only one more thing that Viettel needs to do to be able to provide
services: negotiating with Viettel about the wholesale price and output, so
that Dong Duong Telecom can have good profits.

Analysts
say Dong Duong Telecom now has two choices. With the first choice, it will have
to spend several trillions dong to run the virtual network. This is really a
huge sum of money, and of course, Dong Duong will have to think carefully
before making decision. The second solution is that Dong Duong just needs to
“sell goods” under its brand, while it will absolutely rely on Viettel and it
does not have to make investment. If so, the profit will be low, and of course,
Dong Duong Telecom will never become a telecom giant.

Tuyet Ngan