Competition watchdog finds no abnormality in 3G price hike

The VCA, under management of the Ministry of Industry and Trade, has probed the case in which Viettel, MobiFone and Vinaphone, the country’s largest mobile operators, simultaneously increased the prices for their 3G data package from VND50,000 to VND70,000 a month on October 16.

Subscribers have complained that the increases are unacceptable as the 3G quality remain unchanged, with some even calling for a boycott against the service.

One of the abnormal details about the price hike, according to complaints, is that the service providers increased prices by the same amount at the same time.

But VCA said in its conclusion for the case that the mobile operators have appropriately abided to the government policies.

The mobile businesses have lodged their price hike applications and asked for permission to apply the new prices at different times, it said.

VCA also said October 16 was chosen by all three major companies as the day to increase prices simply because network operators usually make their 3G fee calculation in the beginning or the middle of a month.

Strangely enough, the competition watchdog said the 40 percent price hike of the 3G service providers is reasonable, even though it is stipulated in the law on competition that businesses are not allowed to increase prices by more than 5 percent unless input costs or demands soar unexpectedly.

VCA said while input costs have not risen, the number of subscribers has soared dramatically, thus the network operators are allowed to hike prices.

Nguyen Ngoc Son, PhD, who teaches competition law at the Ho Chi Minh City University of Law and Economics, said the VCA conclusion failed to balance the interest of businesses and consumers.

“It was just an excuse for the price increases to appease consumers,” Son said.

Son said the conclusion only sought to testify the validity and legality of the price hikes, while failing to take into account how the high 3G prices affect subscribers.

The network operators said the price hikes are to help them upgrade infrastructure and improve quality to serve consumers.

“Provided that it is the real reason for the price hikes, the network operators have also failed to keep their promise as we can all see that the 3G quality remains unchanged,” he said.