Vietnam loosens telecoms price controls
The Vietnamese Government has taken a small step towards relaxing its stranglehold on the country’s telecommunications industry with a decision to allow smaller providers to set their own prices.
The new ruling, known as Decision 217/2003QD-TTg, gives post and telecommunications operators with market shares of less than 30% the right to set their own prices. Previously, the Ministry of Post and Telematics (MPT) regulated all telecoms charges for services provided by state-owned and private companies.
“The decision will encourage healthy competition among postal and telecommunications service providers, and foster the expansion of their networks into remote areas,” said the head of the MPT’s Planning and Finance Department, Tran Manh Dung. Although still in its early stages, the Vietnamese telecoms market has perhaps the biggest growth potential in southeast Asia, according to research house Budde.com.
“Vietnam has started to build a new growth momentum,” says a recent Budde report. “The mobile market has been especially dynamic; and Internet is certainly on the move, but from a very low base.” The main impediment, says Budde, is the state’s desire to remain a major player in telecommunications, which has made Vietnam an unattractive destination for foreign investment and has hindered the development of infrastructure.
Even so, a project to lay the country’s first underwater fiber optic cable network is set to gain government approval this year, with VNPT investing $200 million to connect the northern and southern parts of the country with a 2,200-km, 20-Gbps cable. Although regulatory hurdles are still hindering the market, particularly in the area of foreign investment, the VNPT monopoly ended in October 2001, when the government approved a plan to open up 50% of the market to new businesses by 2010.
By 2005, new enterprises are expected to account for 25% to 30% of the telecoms market. There are now five main telecoms providers, including VNPT.
By Lachlan Colquhoun - Telecom Asia - January 01, 2004
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