Telco market looks to rate

After more than two years study, regulations on how telecom service fees are calculated are still in the drafting process.

The latest draft circular regulating methods of calculating telephone services rates of ground-based fixed and mobile telecom services reportedly being posted to gather inputs from relevant businesses and state agencies.

Each year, all businesses with ground-based fixed and mobile phone services are obliged to report on actual service rates in the latest fiscal year and register proposed service rates in the following year to the Ministry of Information and Communications’ (MIC) Telecom Department no later than 90 days from the date of finalising annual financial reports.

Telephone services rates will be set by taking the service overhead expenses and dividing the respective traffic volumes. For instance, the mobile phone service rate will be set by taking its overhead expenses to divide its traffic volume.

This method will be applied to all telcos and the MIC will consider whether firms sell services at dumping rates or not.

A Telecom Department representative said once in place, the circular would be a worthwhile tool to place telecom fees under control.

In fact, the MIC governs telecom fees based on firms’ reports and registration. In which firms holding dominant market shares must register their service rates with the MIC whereas other telcos only have to report to the MIC.

Most recently, through spot checks, the Telecom Department proposed the MIC Inspectorate impose penalties on leading players Viettel and MobiFone for violating state regulations on promotions, whereas smaller Beeline was told to stop providing its Billionaire Package 1 due to dumping rates.

Telecom Department chief Pham Hong Hai suggested these violators incur severe punishments to ensure market order.

Industry players assumed these practices stemmed from the lack of relevant regulations on a common service rate calculation method equally applied to telecom firms.