The Ministry of Information and Communications has approved a proposal from military-run mobile phone service provider Viettel to reduce phone tariffs by 10-15 percent.

The Ministry of Information and Communications (MIC) has approved a proposal from military-run mobile phone service provider Viettel to reduce phone tariffs by 10-15 per cent, starting a new charge reduction race among providers.

The reduction will be applied to its post-paid subscribers with charges set for a basic package of VND890 per minute for internal-network and VND990 for internal-network calls, VND100 lower than previous levels.

VNPTGroup which operates both Vinaphone and Mobifone systems, also proposed the ministry to reduce charges by 10-15 per cent for their post-paid subscribers.

A VinaPhone representative said the submission would be approved by the beginning of next month.

The two providers have prepared new detailed charges and would apply them as soon as they received approval from the ministry.

MIC said it encouraged mobile phone service providers to reduce rates as well as enhance their services.

However, it added that tariff reductions must follow the Government’s regulations and be based on costs and estimated profits or losses to ensure healthy competition amongst telecommunications providers.

Head of MIC’s Telecommunications Department Pham Hong Hai said large providers which account for more than 30 per cent of the country’s market share would need to seek approval from the ministry if they wanted to reduce their customer tariffs.

The nation’s three leading providers have twice submitted price reduction proposals to the ministry to reduce their rates and were refused.

Rate reductions by providers were also a worry for smaller telecoms unable to compete with the lower rates.

The providers hoped that the new charges would create momentum to increase the number of post-paid subscribers.

They also said they would continue to submit a rate reduction for pre-paid subscribers to the ministry as post-paid subscribers only account for 10 per cent of a total 120 million mobile phone users in the country.

Source: VNS