PM approves national telecommunications plan
Recently the national telecommunications plan until 2020 has been approved by the prime minister.
Specifically, the plan aims at a sustainable and efficient market with fair and healthy competition. Notably, several major types of telecommunication services such as mobile phone, domestic and international long-distance home phone and broadband internet each have to witness at least three providers for competitiveness. However, prohibitive measures should be executed in order to impede massive participation particularly for state-owned enterprises whose core businesses are anything other than telecommunications.
In addition, the telecommunications market is expected to be restructured in that business will be reorganised via transfer, mergers and acquisition with a view to set up three and four large corporations, which would enhance efficient utilisation of telecommunication infrastructure and resources. Also, tight control over economic concentration as well as proper resource allocation would be available in order to hamper monopolisation.
Furthermore, all economic sectors are encouraged to take part in the industry via licenses and gradual state-owned enterprises capitalisation. The government will keep holding the controlling stake in those of critical telecommunication infrastructure that may exert direct influence on economic and social development and defence security.
Telecommunications services prices will be adjusted to be in line with the average income and ensure business efficiency as well. Enterprises are encouraged to do self-pricing except for overpricing that may hurt customers and the market stability.
Earlier, director of Telecommunications Department, Ministry of Information and Telecommunications Pham Hong Hai assumed a prosperous market would call for at least three firms of similar market shares.
The plan is believed to lay foundation for the restructuring of Vietnam Post and Telecommunications Group (VNPT) and the merger between MobiFone and VinaPhone. Presently, these two mobile service providers together with Viettel account for 95pct of the market share, which would mean two giants, left thus hurting healthy competitiveness as expected.
What is more, an enterprise is prohibited from holding above 20pct stake in two telecommunications firms at the same time, said Law on Telecommunications. As such, VNPT could hardly manage the two mobile networks as currently. Restructuring this giant, therefore, would be much more challenging particularly considering MobiFone’s present contribution of 50pct to this group’s revenue.
Additionally, the plan targets achievements in telecommunication development scheme till 2020 as follows:
- Fixed telephone lines of 20-25 per 100 households; 15-20 broadband internet subscribers per 100 residents; 35-40 mobile subscribers per 100 residents
- 40pct- 45pct of households have home phones; 35pct-40pct of households get access to internet and 55pct-60pct of the population are internet users
- Mobile service coverage reached 95pct of population, major transport routes; national and municipal roads; sites of economic, defense and security importance
- 100pct of communes have sites providing telecommunications services connected to broadband internet
- Telecom growth is projected to be 1.2-1.5 times as much as GDP growth with revenue totalling USD 15-17 billion, making up 6pct-7pct of GDP.
Category: Business
