Three major mobile providers in Vietnam are facing fierce public criticism for a group monopoly after they decided to increase 3G service fees by 40% at the same time.

Many 3G users unhappy with the recent price hike

On October 16, Viettel, Mobifone and Vinaphone started to increase their 3G service fees. As a result, Viettel’s Mimax and Mobifone’s MIU package fees were also raised from VND50,000 (USD22.36) per month to VND70,000 (USD3.31) per month. Vinaphone increased its MAX and MAXS package fees by VND20,000 (USD0.94) and VND15,000 (USD0.7) per month, respectively.

All of these mobile providers said the price hikes were to comply with the regulation on service prices. They all pledged to improve their service quality.

This is the second 3G price hike since the bringing of the year.

The Ministry of Information and Communication’s Telecommunication Department allowed mobile providers to increase their 3G service fees by a maximum of 20%. However, this time, 3G service fees are increased by up to 40%.

Nguyen Duc Trung, the department’s deputy director said three such major mobile providers currently hold a combined 93% of the domestic telecom market share.

"Under current regulation, mobile providers are allowed to apply service charges on their own on a condition that service prices are not lower than their input costs in order to protect the market. In some countries, prices are floated and state agencies are first to blame in case of market breakdown,” Trung noted.

He said that the department fosters new enterprises with a modest market share by allowing them to apply service fees lower than their input costs.

Meanwhile, mobile providers said that the increase in 3G service fees is unavoidable.

“3G service prices could be even higher than VND70,000 (USD3.31) if services fees are brought to equal to input costs,” said Nguyen Dinh Chien, MobiFone Deputy General Director.

An anonymous telecom expert told DTiNews that mobile providers should only increase service fees if they are really incurring losses, and should make public their operation fees before deciding any increases in service fees.

Meanwhile, Tran Minh Hai, and attorney and  Managing Director of Basico Law told DTiNews that three major providers’ increases in 3G service fees at the same time at the same level implied their collusion in group monopoly and this violates the Competitiveness Law.

According to Hai, the law bans enterprises holding from 30% of the market share from applying the same prices directly or indirectly. Dominants in the market are also banned from applying irrational prices harming clients’ interests.

“An investigation should be conducted for such cases to find out the best solution,” he recommended.

After the increase in the 3G service fees, DTiNews conducted a survey of clients, and the results showed that 92% out of 8,000 readers said this is a group monopoly and they would unsubscribe the service if possible.

Only 4% of those surveyed people said their providers developed in the domestic telecom market or expected an improvement in 3G service quality in the time to come.