Mobile phone price war in southern Vietnam market

Despite its sizeable market share elsewhere, Viettel mobile phone company is struggling against a general perception in Ho Chi Minh City that its transmissions are not as stable as those of MobiFone or VinaPhone.
Indeed, according to a report released recently by HCMC’s Department of Posts and Telematics, MobiFone and VinaPhone have been outstripping Viettel in terms of subscription growth.
Viettel is pushing hard to change these statistics under a bold new discount plan launched last Thursday called Happy Zone which will target prepaid customers in Vietnam’s most populous city.
Under the plan, calls within the Viettel network in HCMC will be charged at VND990 (6 US cents) per minute, or 40 percent off regular Viettel prices.
Calls outside the network will attract a VND1,490 (9 cents) per minute fee, 20 percent off regular prices.
Viettel’s various discount plans,some of which were launched two weeks ago, offer specials such as lower fees countrywide for calls made from 11 p.m. to 7 a.m. daily.
Viettel posted sales of VND16.3 trillion (US$1 billion) last year, up from VND7.1 trillion in 2006.
Last year, the operator recorded 8.1 million active mobile phone subscribers.
The number of fixed-line and asymmetric digital subscriber line, or ADSL, subscribers doubled to 287,000 last year compared with 2006.
Viettel plans to expand its telecommunications services overseas, making revenue from this area account for 10 percent of total revenue by the end of the year.
The company will open representative offices in Hong Kong and the US in 2008, it added.
Viettel’s special plans for HCMC are being studied with interest by its competitors.
Since 2004, when S-Fone pioneered removing fee differences between regions, all major local operators began to offer standard pricing countrywide.
Occasionally, though, there have been small-scale discount plans to target specific areas.
For instance, MobiFone recently offered a Homezone service in which prepaid subscribers enjoyed discount fees for every call made from locations they registered as their “home zones.”
Many expect new discount initiatives from MobiFone in response to Viettel’s latest move in HCMC.
For its part, VinaPhone also began a Talk 24 discount plan last week to attract customers in the city.
With Talk 24, a prepaid subscriber can make a call of up to 10 minutes to another VinaPhone number and only be charged for the first minute.
While other mobile operators are busy with longer-term plans – HT Mobile is starting from scratch with GSM technology, GTel is developing infrastructure and human resources, and CDMA operators like S-Fone and EVN Telecom are struggling to gain a foothold in the market – MobiFone, VinaPhone and Viettel continue to fight for the biggest share in HCMC