VietNamNet Bridge – Telecom groups have unanimously proposed the Ministry of Information and Communication (MIC) to 8.1 US cent per minute, hoping to earn $12 million, or VND250 billion more every year from the service.

Service fee increase brings higher profits

Vietnamese telecom service providers, in the midst of victory, have suggested raising the international call charges further after successfully raising the fee to UScent6.1 per minute.

In 2012, the service fee dropped to the deepest low of UScent2.6 per minute as a result of a stiff competition among telcos to attract more clients.

At that time, telcos voiced their complaints about the big losses when they had to provide services at below the production costs. Meanwhile, MIC found that Vietnam loses nearly one hundred of millions of dollar every year when setting up such a low service fee.

The ministry then gathered telecom groups to discuss the issue and decided to raise the service fee to UScent 4.1, and then to UScent6.1.

The reports by telecom groups showed that the incoming calls’ capacity has decreased by 20 percent after the new prices were applied. The higher service fee has led to the increase in the illicit international call capacity again. Meanwhile, the higher popularity of OTT (over the top) apps, which allow people to communicate free of charge, has also led to the fall.

However, the capacity decrease has not worried telcos. Despite the 20 percent capacity decrease, the revenue from the service still increased by $75 million in 2013. This means that Vietnam got VND1.6 trillion more from the foreign telecom networks which paid for the connection of their services with the fixed line and mobile subscribers in Vietnam.

The 2013 finance report of the Vietnam Post and Telecommunication Group (VNPT) also showed that the VOIP international call service has become a big source of income for the group.

Especially, some other telcos, which were on the verge of bankruptcy some years ago, have revived thanks to the increased income from the international call services.

According to the military telecom group Viettel, by December 31, 2013, the total capacity of incoming international calls to Viettel’s subscribers had reached 1.4 billion minutes, a 20 percent decrease if compared with the 2012’s capacity.

However, the group’s revenue from the service still increased by 54 percent to VND1.619 trillion, thanks to the service fee increase from UScent4.1 to UScent6.1 per minute.

Telcos still want bigger profits

Though the international call charges have increased to UScent6.1, Vietnamese telcos believe that it is still lower than the fees set by other countries in the region.

They believe that UScent8.1 per minute would be the most reasonable rate, which is high enough to help businesses make profit and help the State collect more foreign currencies.

The representative of VNPT has confirmed VNPT really wants to raise the service fee to UScent8.1. Meanwhile, a senior executive of CMC Televom, said MIC should instruct telcos to apply the service fees which would be stabilized for five years.

Viettel has officially proposed to raise the VOIP service to UScent8.1 from February 1, 2014.

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