Vietnam Military firm to compete in telecoms
HANOI - Vietnam has licensed a military-run firm to
provide domestic voice telephone services as the first competitor to
state-run Vietnam Posts and Telecommunications (VNPT), officials
said on Tuesday.
The license to enter the country's fast-growing and lucrative call
market was granted recently to the Military Electronic Telecommunications Company (Vietel), an
official of the Directorate-General of Posts and Telecommunications (DGPT) told Reuters. The
official, who did not want to be identified, said Vietel and the semi-private Saigon Posts and
Telecommunications were working on separate proposals to start providing international telephone
services, again in competition with VNPT.
VNPT and its affiliates currently have a monopoly in both domestic and international services.
An official from Vietel said it expected to launch its new long-distance domestic calls service this
month and hoped to get permission for an international service early next year.
He said the firm would lease a special line from VNPT to provide the service via the Voice Over
Internet Protocol (VOIP). This would cut domestic and international fees and avoid congestion of the
public Internet service, he said.
Technology would cut call fees
The official said the technology would allow call fees to be cut to 30-50 percent of their current
levels, but added that the government would have the final say. VOIP should allow users to make
international calls at domestic rates via the Internet.
However, the DGPT official said VOIP quality would not be as high as that of the existing VNPT
service.
The Vietnamese military is currently involved in numerous business ventures ranging from
construction to banking. It is eager to cash in now on the booming call market through Vietel, which
is currently an Internet service provider and an importer and exporter of telecoms materials.
Under current regulations, Vietnam's telecommunications market is closed to all but state-owned
firms and joint-stock companies like Saigon Posts and Telecommunications with majority stakes
controlled by the government.
However, under a trade agreement signed with the United States in July, Vietnam has committed to
gradually opening this market, seen as a major growth area, to joint ventures.
Tuesday's official Saigon Times Daily quoted VNPT as saying around 18,000-20,000 new
telephones were being installed in Vietnam each week and the number of international calls grew by
18 percent in the first eight months of this year.
The report said the number of telephone subscribers in the country would reach three million by the
end of the month.
The DGPT official said his organization would have to draw up new policies covering foreign
investment in the industry after the U.S. trade pact.
Under the trade agreement, which still needs to be ratified by the U.S. Congress and Vietnam's
National Assembly, U.S firms would be allowed to enter into joint telecoms ventures in Vietnam in as
little a two years.
Foreign involvement in the telecoms sector is currently limited to business cooperation contracts,
which have proven unpopular with foreign firms.
Such contracts limit foreign partners to financing, technology transfer and some management rights in
return for a share of revenues.
Reuters - September 5, 2000.
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