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ISP rivalry leaving user benefits behind

A bitter rivalry is brewing between internet service providers (ISPs) over a new Net access method devised by the country's largest ISP that threatens to shut emerging ISPs out of the market. However, an argument raised by smaller ISPs that Viet Nam Data-communications Company's (VDC) new service is an abuse of its near- monopolistic position has caused the General Department of Post and Telecommunications (GDPT) - VDC's owner - to suspend starting the service until further notice.

That decision, VDC- argues, means that Internet users in Viet Nam are missing out on the most convenient and inexpensive method of accessing the Net. Market observers have also entered the fray, saying that the controversy serves to highlight the inadequacy of the legal framework surrounding the Internet despite rocketing numbers of users. The new service about to be offered by VDC would have allowed Net surfers to access the Net from any public phone using simplified procedures and without the need to go to ISPs for registration, said deputy director for business, Nguyen Tien Anh Tuan. According to Tuan, the service would not require users to pay installation and monthly subscription fees and the only costs payable would be actual online time, paid via the normal telephone account.

"The only fee will be calculated in the bill of the fixed telephone that dialed our phones. So phone subscribers who access the new service do not have to queue to pay for their Internet use." he said. Fearing that the new service would prove a consider- able blow to their operations, two other ISPs - FPT and Sai Gon Postel - reacted strongly to the announcement of VDC's new service, saying that VDC - as VNPT's subsidiary- is taking advantage of its parents monopoly in the basic telecommunications market to wipe out other domestic ISPs. They also said that VDC was violating GDPT's new pricing decision by excluded installation and subscription fees from its new service.

That decision, signed on January 12,2000 set the floor and ceiling prices for Internet services and included installation and subscription fees in a bid to stimulate net use. VDC argued that their new service does not offer e- mail capabilities whereas GDPT's decision only applied its price adjustments to public telephone-based Internet with four basic services including e-mail, data transmission, re- mote access and database access.

Tuan said: "If our customers do not have an email box there is no need to pay for their user account costs that comprises system maintenance and workforce salaries, why should they have to pay the same price as the user who gets the full package." He added that the new service is aimed at popularising Internet use in Viet Nam after years of sluggish Net growth compared to the rest of the world. Tuan said that the new service could also be offered by other ISPs that could invest in technology facilities such as those of VDC and hire locat post offices to collect the Internet fee on a shared earnings basis.

"You can not say someone is monopolising if others are also permitted to do the same thing." However, the simplicity of VDC's argument is lost on other ISPs. Director of the Netnam ISP, Tran Ba Thai, noted that whilst it was true that the post office is ready to lease their Internet accessing management systems but at an irrationally high price that most fledging ISPs can not reach in the moment. As an example, Thai said that the leasing of an E1 system which has a 30 telephone line capacity is charged at more than VND40 million a month. Meanwhile, the price for hiring a telephone line currently is VND68,000 a month, meaning that the equivalent 30 lines costs only VND2 million a month. Market observers add fuel to the fire by claiming that the technology of the new service will make it harder to control online security issues.

"It will be hard to investigate who backed if the backer surfed the net via public places like cyber cafes, hotels and universities. Certainly, it is impossible for the owners of such places to know what their customers are doing in cyberspace," one observer said. However, the new service was received with wide enthusiasm from Vietnamese students and low-income users who have been left on side lines of the emerging global network expansion due to the heavy fees.

Nguyen Hanh Trang, a student of a privately-run business administrative university in Ha Noi said: "It is very good news for us, students who have always wanted to have more time to explore the web. We can hook up the web any time, anywhere without regard for monthly fees and registration. " Market observers hope that the new service will prove to be a big boost to the Internet use as well as e-commerce in Viet Nam once it gets the go-ahead to proceed.

"We should look forward to the positive impact of the controversial service so that Viet Nam becomes an ideal and integrated place for business and information," one observer said. "Apart from that, the State should quickly outline new regulations so as to protect fair and fresh competition in the high-tech business environment, " he added. According to Tuan, the company is trying to finalise the controversy and expects that the suspension of the service by the GDPT will be lifted soon.

FPT, the nation's second largest ISP, has already issued a prepaid Internet card offering similar services The country now has about 71,000 Internet users, resulting in fierce competition between ISPs over the past seven months, triggered by the GDPT's pricing decision. VDC currently holds 65 percent of market share. It has built 10E1 systems.

Message from kenphan@webmail.netimages.com - Vietnam News Network - July 31st, 1999.