To attract customers, major mobile networks continue launching overly generous promotional campaigns.

Small networks like S-Fone can’t compete with the three largest networks in promotional activities.

MobiFone, VinaPhone and Viettel offered free inner-network calls for one year for new subscribers, they met several times to discuss promotional policy.

According to a source from Viettel, in such a meeting, Viettel and MobiFone agreed to reduce the bonus money for new customers to the same level but VinaPhone didn’t agree. At that moment, buying a new SIM card, customers had up to 180,000 dong in the account.

In the next meeting, Viettel and MobiFone agreed that VinaPhone’s bonus money for new clients to be 10,000 dong/SIM card higher than theirs. Thanks to this agreement, the bonus for 50,000 dong SIM cards felt from 180,000 to 130,000 dong. However, this commitment was quickly broken by VinaPhone.

“When the growth of subscribers and revenue don’t meet the target, commitments are no longer important. Increasing promotions will help mobile operators to achieve their goals,” said a telecom expert.

He said that VinaPhone is a financially dependant network so pressure for profit is as not as heavy as Viettel and MobiFone. This network, therefore, is more interested in achieving its goals on subscribers and revenue.

The expert said that it is difficult to stop the promotional race because a network would quickly lose customers if it doesn’t offer promotions.

VinaPhone’s representative said that there was no official commitment about promotion. He said that Viettel recently suggested applying a common base price to avoid the race to slash mobile charges. Then it suddenly cut charges several days later.

An expert said that Viettel joined the race for promotion because its major revenue and profit comes from the mobile network. Last year this firm earned 675 billion dong from broadband Internet services but it had to pay 1.5 trillion dong for hiring channels.

“The Ministry of Industry and Trade encourages mobile networks to slash charges to benefit all customers, not promotion to lur new customers only,” said an official from the Ministry.

A new circular managing telecom network’s promotional activities is expected to come on May 15 and take effect from July 1 2010. According to drafts, mobile operators will be permitted to use the following types of promotions: reducing the prices of SIMs, recharge cards, and the prices of mobile phones that are sold with a service pack for pre-paid subscribers.

For post-paid subscribers, permitted promotions include reducing activation charges, daily and monthly subscription rates and information fees, as well as increasing times for communication, the volume of information and the information pack when the charges are unchanged. Any other form of promotions must be approved by MoIC.

Further, the maximum reduction through a promotion must not exceed 50 percent of the selling price applied before the promotional campaign. For example, if the information charge before promotion is 1000 dong per minute, the promotional charge must be at least 500 dong per minute.

PV