Telcos face stern ultimatum

More than three years ago the first two MVNO licences were honoured on Dong Duong Telecom (August 2009) and Vietnam Multimedia Corporation VTC (June 2010) by the Ministry of Information and Communications (MIC).

However, at this time both firms are yet to roll out registered services despite solid promises about exact times for the service launching.

When getting its MVNO licence in 2009, Dong Duong Telecom leadership unveiled it got an in principle agreement with military-owned Viettel Group on sharing the latter’s 3G network and confirmed to roll out the service from quarter 1, 2010.

As with VTC, deputy director Chu Tien Dat at VTC Digicom which directly deploys VTC’s virtual network said VTC had reached a detailed agreement with Electricity of Vietnam (EVN) on using EVNTelecom’s 3G network and would provide the service in late 2010. Dat even said VTC would recoup capital within at most three years of service provision.

In respect to how the MIC deals with delayed service provision of these two companies, head of MIC’s Telecom Department Pham Hong Hai said the department had forwarded documents requiring these firms to report on their delay in launching virtual network services.

“Last year, the department got the order to recall MVNO licences of these firms but did not do so since these firms delivered reasonable explanations,” said Hai, adding that taking back the licences would be inevitable if these firms could not report any progress in their cases.

Hai had attributed these firms’ delay to problems in their agreements on sharing networks with existing operators having network infrastructure.

In fact, Dong Duong Telecom has yet to reach a detailed agreement with Viettel on sharing 3G infrastructure whereas with VTC its partner EVNTelecom was merged into Viettel from early year so that former agreements would need to be reconsidered.

Industry insiders assumed parallel to technical infrastructure difficulties, delays in virtual network services provision of Dong Duong Telecom and VTC also related to these firms’ market entry perspective. Several existing service providers with infrastructure such as S-Fone, Gmobile and Vietnamobile are struggling to get a toehold in domestic telecom market due to facing great pressures from big players like VinaPhone, MobiFone or Viettel, so that the opportunity for fresh virtual network operators would be fragile.