Mobile virtual network operators breaking promises

Published: 21/01/2011 05:00



Bridge – Both the mobile virtual network operators Dong Duong Telecom and VTC
still cannot officially provide services, even though they received operation
licenses more than one year ago.

In early 2010, when signing the strategic partnership agreement with the
Electricity of Vietnam EVN, VTC announced that it would begin providing
services in June 2010. At that time, Nguyen Hoang Phong, Director of VTC
Digicom, a subsidiary of VTC, which is in charge of implementing the agreement
signed between VTC and EVN also affirmed that VTC would develop creative
content services in order to be able to compete with the service providers with
network infrastructure.

However, until now, the promise by VTC has not come true.

Meanwhile, when  Dong Duong
Telecom got its operational license in August 2009, it also promised that it
would begin providing services in the first quarter of 2010. However, to date,
customers still cannot use Dong Duong Telecom’s services. Dau tu newspaper has
quoted its sources as saying that Dong Duong Telecom will only be able to
launch its services by mid 2011.

One of the biggest problems that forced MVNOs to break promises is that
the need to reach agreements on sharing wireless network infrastructure with
the service providers with network infrastructure. Dong Duong Telecom will
share the same wireless network with Viettel, while VTC with EVN Telecom.

However, insiders believe that the most important factor that led to the
tardiness is that the new service providers still cannot identify specific
services to develop. This means that they need to focus on certain groups of
clients and pay attention to and take care of clients. A service provider with
network infrastructure, who asked to be anonymous, said that in order to
compete with service providers with network infrastructure, ss need to find
suitable market segments to develop. If MVNOs, the newcomers on the market,
cannot find the things which differentiate them with other service providers,
and continue to have to “live on” the network infrastructure of other service
providers, they will not have many opportunities to exist or develop.

By the end of 2010, Vietnam’s
mobile telecom market had had 154 million subscribers.  90 percent of the subscribers are clients of
Viettel, MobiFone and VinaPhone. As such, the door of the mobile telecom market
is just narrowly open for MVNOs. Analysts comment that MVNOs cannot follow
Beeline or Vinamobile by launching shocking service packages with surprisingly
low charges. The mobile service fees at this moment are dangerously close to
production costs. MVNOs also cannot quickly develop the number of pre-paid
subscribers because of the limited repository of numbers.

Dong Duong Telecom, for example, has been allowed to develop
subscribers’ numbers with the prefixes of
số 0998xxxxxx and 0999xxxxxx. This means
that it can develop two million subscribers at maximum. Moreover, the average
revenue per user ARPU of prepaid subscribers is much lower than post-paid

As mobile service providers who do not have their own network
infrastructure, MVNOs will operate by sharing infrastructure with service
providers who have a license to set up telecom network infrastructure. MVNOs
will buy the capacity of service providers with network infrastructure at
wholesale and then retail to clients. MVNOs are allowed to issue their
simcards, build up the systems to calculate charges, to manage clients and
build up value added services under their brands.

In related news, Buu dien newspaper has announced the result of a survey
on 3200 mobile phone subscribers in Hanoi and HCM City.
MobiFone is considered the service provider who can provide the best quality
service with 3.92/5 marks, while Viettel 3.85 and VinaPhone 3.83 marks. Smaller
networks Beeline got 3.75, S-Fone 3.75, Vietnamobile 3.73 and EVN Telecom 3.32

Source: Dau tu

Provide by Vietnam Travel

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