Telco line fees short circuit

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From early 2012, military-run Viettel Group and state-owned VNPT sharply hiked telecom circuit leasing charges, which alarmed smaller telecom operators.

“Viettel and VNPT sharply hiked leasing charges, which reflects signs of a monopoly,” said Ministry of Information and Communications (MIC) Telecom Department head Pham Hong Hai.

Hai said the Telecom Department asked Viettel and VNPT to temporarily delay price hikes, even with channel leasing contracts that firms and the two telcos were earlier inked and required Viettel and VNPT to discuss leasing rates with firms.

By the end of July 31, 2012 if relevant parties failed to reach a common voice, the Telecom Department would step into the case and set Viettel and VNPT’s leasing rates factoring on the rates these two telcos formerly reported to MIC, which will be recalculated using these service provider vouchers.

“Albeit the leasing service cost is high, the MIC will not green-light any firms to ramp up their service rates abruptly as in recent case. Price hikes should follow a rational roadmap,” said Hai.

Small players like Vietnamobile and GTel claimed in the past months that Viettel and VNPT unexpectedly hiked circuit line and associated infrastructure leasing rates by 207 and 276 per cent over previous rates.

For instance, with Gtel Mobile many circuit lines were previously leased out from VNPT at VND130 million ($6,200)/line, now rising to VND280 million ($13,300)/line and from Viettel at VND130 million now increasing to VND249 million ($11,800)/line.

With Vietnamobile, at the previous rate each month the company had to pay VND2.6 billion ($123,000) leasing charges to a VNPT subsidiary, now the bill reaches VND5.8 billion ($276,000) monthly.

In response to these claims, Viettel and VNPT insisted that the previous rates were rather low and did not bring them profits. A VNPT representative said VNPT did not hike channel leasing fees, but had just removed strong price discount policies which took place in the past months.