Telecom providers in race to slash service charges

An S-Fone subscriber makes a phone call. Mobile phone users of the network will enjoy lower charges from on Wednesday - Photo: Courtesy of S-Fone

HCMC – S-Fone and Vietnamobile have announced to slash their mobile service charges by 10-15% after other major players, including Viettel, MobiFone and VinaPhone, had kicked off the race since early August.

Ho Hong Son, CEO of S-Fone, said in a statement that the charge reduction aims to sharpen S-Fone’s edge in competing with other players and ensure their clients’ rights. According to Son, it is an obvious fact when S-Fone is put under a serious competition from other players.

S-Fone currently has nearly seven million subscribers, which is just a fraction in comparison with the biggest player Viettel with over 45 million subscribers. Under S-Fone’s new charge policy, its clients will enjoy charge reduction of between 10% and 15% for internal and external calls.

Subscribers who use four main packages, comprising Standard, Economy, 4M and Smile, will enjoy fee reduction since on Wednesday.

For example, for Standard package, the internal calling fee is VND15.3 per second compared with the previous charge of VND18 per second.

The move by S-Fone was also reciprocated by Vietnamobile, which declared to cut external and internal charges by nearly 10% effective from Wednesday.

With the fee reduction, Vietnamobile subscribers will pay only VND1,380 per minute of external and internal calling.

According to Vietnamobile, subscribers of service packages like Maxi Talks, Max Circle, VM Text and Flexi Data will enjoy the benefit. To participate in the charge reduction, subscribers should send the text DK_Eco to the call center number 123 for registration.

Since early August, giant telcos Viettel, MobiFone and VinaPhone had cut down charges by 10% to 15%. Industry insiders say the race to slash charges only focuses on basic services like SMS and calling, while charges for added value services on the third generation networks like mobile internet, video call, news and music searching has remained unchanged to date.

Recently, the UK-based market researcher Business Monitor International said that the Average Revenue per Unit (ARPU) has been falling year on year and could harm the turnover of mobile carriers.

The researcher, citing official figures publicized by the Ministry of Information and Communications, calculated that the mobile ARPU rate for Vietnam fell by 8% in 2008 to reach US$6, having fallen in the previous year from US$7 in 2006 to US$6.5 in 2007.

Thus, the market researcher suggested the index continued falling in 2009 and in the coming years.

Meanwhile, a senior telecom official who asked not to be named said that the ARPU now is only US$4.

The fall resulted from poor customer service and customer management. In addition, the ARPU decrease is also blamed on the undercutting race among telecom providers.

In related news, Yahoo! Vietnam and Viettel last week shook hands to provide Yahoo! Messenger in mobile version to Viettel’s subscribers. The U.S giant also co-worked with S-Fone to provide Yahoo! Chat service to its subscribers.

The General Statistic Office reported that the first eight months of the year saw an additional 32.5 million mobile subscribers, increasing 17.6% over the same period of last year.