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.
|