A lot of new policies set up in 2010 by the Ministry of
Information and Communication (MIC) has had big impacts on the telecom market.
2010 is also the year which witnesses the stiff competition among mobile phone
service providers, according to VnMedia.

MIC tightens control over sale promotion campaigns

On May 14, 2010, MIC released a decision setting up the limitations for mobile
service providers in promotion campaigns.

Under the new decision, mobile service providers must not offer the promotional
values exceeding 50 percent of the goods’ values. Mobile service providers can
offer promotion programmes for no more than 90 days within a year and every
programme must not last more than 45 days. Besides, service providers are now
allowed to offer sale promotions for more than 180 days a year for both pre-paid
and post-paid services.

The new regulation, which took effect on July 1, 2010, was released after mobile
service providers had been continuously launching promotion campaigns, trying to
slash mobile service fees dramatically. At that time, MIC believed that it was
necessary to take intervention to stop the race which caused an unhealthy
competition.

Deputy Minister of MIC Le Nam Thang said that the decision to tighten control
over sale promotion campaigns has brought the desired effects. Instead of
rushing to offer promotion programmes, mobile service providers nowadays focus
on improving the quality of services in order to retain clients.

Previously, when too many promotion campaigns were launched, people changed
their mobile phone numbers continuously, because they would throw away simcards
right after they spent all the account money and buy new simcards at low
promotional prices. This had led to the big waste of the storage of numbers.
However, with the stricter control, the situation has ended.

CDMA networks facing big difficulties

By 2010, Vietnam’s telecom market has had seven official mobile service
providers with five GSM and two CDMA networks. The fact that the majority of
service providers choose GSM networks instead of CDMA shows the difficulties
that CDMA service providers face at this moment.

Since the beginning of the year, Sfone has fallen into big difficulties, when SK
Telecom, the foreign partner, decided to leave S-Fone joint venture.

Sfone has to change its business mode after all the staff of SK Telecom left
Vietnam in January 6, 2010. SK Telecom now just acts as a shareholder in the
joint venture. Since mid 2010, S-Fone has been managed and run by Saigon Postel.
The Vietnamese company is now seeking new partners to develop S-Fone network.

The fact that FPT Group purchased stakes of EVN Telecom, once again, can show
the difficulties that CDMA networks are facing. In October 2010, FPT and FPT
Telecom announced the purchase of 50 percent of stakes of EVN Telecom. This
means that the second CDMA network has to find a partner to cooperate after a
long period of operation with modest achievements.

More opportunities for new technologies

In September 2010, MIC granted license to apply 4G LTE modern technology on the
trial basis to five enterprises, namely VNPT, Viettel, FPT Telecom, CMC and VTC.
The trial basis will last one year, after which enterprises will have to join
bids to obtain the licenses

Doubts have been raised about whether Vietnam should allow application of 4G LTE
services at this moment, when 3G network is still underdeveloped.

However, experts believe that it is not too early to grant licenses at this
moment, and that the trial period is needed now to find out if the technology
fits enterprises and the market.

VNPT has teamed up with a Russian company to try LTE in Hanoi in November 2010.
Prior to that, in October, VDC, a member of VNPT, completed the installation of
the first LTE base transceiver stations in Hanoi.

Source: VnMedia