Telecom Company, Viettel, has said that it has sought permission from the Ministry of Information and Communication to raise fees for 3G services, as the service costs are presently too low.
Tong Viet Trung, Deputy Director-General of Viettel, said while the numbers of 3G subscribers are increasing rapidly and smart phones are becoming more popular, the service costs have remained low.
At the beginning, competition between mobile phone service providers was too fierce; hence service providers resorted to low tariffs to attract subscribers.
But as the numbers of users have increased substantially, Viettel will have to raise prices as the current fee structure does not even cover production costs, said Trung.
Another reason is that the service provider has to upgrade the current network capacity quality and rise in fees is needed for this huge investment.
According to figures released, the price of 3G in the country is much cheaper than in China or in European countries.
In early April, two leading mobile phone service providers, MobiFone and VinaPhone, announced a hike on 3G packages from VND40,000 (US$1.9) to VND50,000 ($2.4) a month.
According to the Ministry of Information and Communication, mobile operators in the country have spent VND28 trillion ($1.3 billion) to upgrade 3G packages. They also offered low 3G packages to attract more subscribers. For instance, unlimited package costs only VND50,000 a month and package for students is VND35,000 per month.
One more thing that made service providers increase fee of 3G packages is the use of Over The Top (OTT) services that allows subscribers to send free messages and calls. The ministry said the country has 20 million 3G subscribers. If a large number of subscribers use free OTT services, it would be a huge loss for mobile operators.
Nguyen Manh Hung, Deputy Head of Viettel, said that if their 40 million subscribers use 3G and OTT services, the company would see 40-50 percent loss in revenue.
Do Vu Anh from the Vietnam Posts and Communications Group said that free OTT services are making losses for Vietnamese telecom operators and its counterparts in the world.
