MIC gets tough on slack Telcos

October 9, 2012 | 01:38 pm GMT+7

The Ministry of Information and Communications (MIC) has sent a letter of ultimatum to three companies that have been licensed to provide mobile virtual network services, urging them to commence operations as soon as possible.

Illustration photo (Source: Internet)

The move follows the companies" sluggish implementation of the services, despite receiving the green light in 2009.

A mobile virtual network operator (MVNO) is a wireless communications service that does not own the radio spectrum of wireless network infrastructure over which the MVNO provides services to its customers.

An MVNO enters into a business agreement with a mobile network operator to obtain bulk access to network services at wholesale rates, then sets retail prices independently.

According to the Law of Telecommunications, a company that receives a licence to provide the service must implement it within two years or face having its licence revoked.

The ministry had also instructed the companies to provide a timeframe as to when they expected to go into operation, according to Phan Hong Hai, head of MIC"s department of telecommunications.

Dong Duong Telecom was the first company in Viet Nam to be granted a licence in 2009, followed by the Viet Nam Multimedia Corporation (VTC) and the Corporation for Financing and Promoting Technology (FPT).

Dong Duong Telecom said it would team up with Viettel to open its service, and VTC said it would collaborate with EVN Telecom. However, none of them have shown any sign of making their projects a reality, attributing the fact to the overcrowded mobile market.

Nguyen Hoang Phong, director of VTC Digicom, a telecom affiliate of VTC, admitted that increasing competition in the mobile market had reduced the attractiveness of the once booming trade. FPT"s former general director Truong Dinh Anh said the market was being dominated by the "big three" mobile network operators, Viettel, Vinaphone and MobiFone, which had a combined market share of 95 per cent.

"Coupled with low call charges, we no longer see an opportunity here" he added.

New mobile subscriptions in Viet Nam have skyrocketed in recent years, reaching 19 million in 2006, 25 million in 2007, 74 million in 2008, 98 million in 2009 and 123 million by the end of August 2012.