Regional Seminar On Costs and Tariffs of Telecommunication services

Transcription

1 Regional Seminar On Costs and Tariffs of Telecommunication services Dr. Nguyen Minh Son,Deputy General Director Planning and Finance Dept - MPT, Viet Nam Tokyo June

2 Part 1: Viet Nam Telecommunications Overview Part 2: Tariff regime in Viet Nam Part 3: IP-Telephone in Viet Nam 2

3 Part I: Viet Nam Telecommunications Overview 3

4 Viet Nam Telecommunications Overview 1. Legal Frame work - Post and Telecoms Ordinance 2002 and Telecoms Decree 160/2004/ND classified Telecoms Operators in two categories: + FBO ( Facility Base Operator ) + SBO ( Service Base Operator ) 4

5 Viet Nam Telecommunications Overview 2. Market history In 1997 : Internet licensing - 1 Internet IXP - 5 ISP In 2000: VoIP licensing - 4 VoIP Operators for both Domestic and International 5

6 Viet Nam Telecommunications Overview 2. Market history ( Cont. ) In 2003: Fully opening market for domestic competition 5/ Nation-wide fixed local operators: VNPT, Vietel,, EVNT - 6 Nation-wide mobile operators: VMS, GPC, Vietel,, SPT, HTC - 3 National and International long-distance operators: VNPT, Vietel,, EVNT - 6 IXPs and over 20 ISPs - 6 VoIP operators: VNPT, Vietel,, SPT, EVNT, HTC, Vishipel 6

7 Indicator Total Telephone Subscribers Mobile phone subscribers Fix Telephone Subscribers Number of Internet Subscribers Number of Internet users Total Internet international bandwidth Telecom service coverage Number 18.1 Mill 10.9 Mil 7.2 Mill 3.37 Mill Mill Mbps Tel Density 21,75% 13.15% 8.6% % 100% 7

8 Part 2: Tariff regime In Viet Nam 8

9 1. Background o o o Before 1998: Monopoly Market Telecoms services in small of scope of service and coverage areas Telecoms service tariffs were strictly under control of The Government 9

10 ! 1. Background (Cont ) :! Market remark with entry of newcomer operators - Tariff Still regulated with mechanism of Monopoly market - Government decide tariffs of under 20 gram postal mail service, PSTN local call - DGPT decides: +. /Tariffs of almost services: International, Long distance, mobile, leased line circuit, Internet etc / Interconnection charge required 10

11 ! 1. Background (Cont ) ! - Competition enhanced in the market - Tariff system still were in back with the development of Market : + Tariff unbalancing +. / Interconnection charge still based on sharing revenue. +. / High leased line tariff +. / Tariff imbalance not base on cost.. Between long-distance and local call.. Between domestic and international services. +. / Cross-subsidized subsidized tariff system +. / High price of long-distance and mobile services - Requirement for change of Tariff Regulation regime to go in line e with market mechanism 11

12 !! 2. Tariff management mechanism from 2003 up to present. Tariff regime under the Decision number 217/2003/QD-TTg of Prime Minister on the tariff management mechanism for Posts and Telecoms service. Principles of the new tariff management mechanism. +. / Government respect the own right of operator in providing telecoms services. +. / Non-Discrimination in providing telecoms services among telecoms operators. +. / To ensure that the operators having significant market power (SMP) does not abuse its dominant position +. / Cost-oriented tariff management. +. / To ensure the telecoms development in remote, rural areas. +. / Develop the Interconnection charge system based on cost, under nondiscrimination terms 12

13 !! - Radical change in the tariff regulation Regime - From the monopoly to the market mechanism - Strong Deregulation system + State only control the retail tariff of SMP + All others operators are deciding their own retail tariff base on market mechanism 13

14 !! SMP : Significal Market Power Operator that are: - Having market share of more than 30% of the market - Giving the influence to the market entry of other operator 14

15 !! - MPT annually issues the list of service and operators under SMP regime Services and operators are belonging to the list of SMP should submit proposal for their change the retail tariff to MPT for approval before they had made decision All operators should register cost of service twice a year and have their own right to issue the tariff decisions in the condition that they must submit the cost calculation to MPT twice a year. 15

16 ! 3.Market effect! -Enhance competitive environment - Retail tariff reduce strongly with services having more competition tion ( such: Mobile, Long distance, VoIP services, International services, Leased line services... - Strong Tariff rebalancing process : + Mobile retail tariff: from 03 regions to only one region fast subscribers grow rate + Long distance call: from 08 distance areas reduce 05 and 03 ones more reasonable price for users traffic volume increasing + Long distance leased line curcuit also restructuring go in line with the change of Long distance call services - With the proper new regulation regime, especially in the retail tariff regulation having great impact to the development of the Telecommunication market In Vietnam. It had observed of 1.5 Mill 16

17 Part 3: 3 " 17

18 !! # $!% & VoIP service was second service open for competition by the end of Licenses were given for 04 operators, in those 03 were newcomers: Viettel, SPT, EVNT - 04 new prefix code appeared in the market: 71;178;177;176 - In 2001: additional two operators were given a licenses: Hanoi Telecoms and Vishipel - Up to now ( 6/2005 ): 06 Operators of VoIP services 18

19 ! I. VoIP ( Cont ): 2. Tariff: - Tariff for the VoIP services offered by VoIP operators at that time less than traditional IDD and STD from 30-40%. - In 2000 tariff of IDD and STD in Viet Nam were very high 2,5-3,0 USD/ Min for IDD service and USD per/min for long distance Call. 19

20 !! # 2. Tariff: - With the competition in the VoIP market, tariff for both traditional services ( IDD, STD ) and VoIP services strongly reduced. Tariff for IDD reduced time ( 5/2006 ) in the comparison with the year 2000, now only USD/Min for the all countries; STD price had been reduced 3 time now with 0.10 USD/Min - Radical change was observed in the traffic volume: Strongly reduce in traffic volume of traditional services ( IDD and STD): In IDD service, after only two years introduction of VoIP service, the volume of IDD only take < 20%. Now IDD is occupy appx 22-24% 24% ( for incoming traffic ) and 30% ( for the outgoing ). 20

21 ! II. Internet telephony - In 2003 MPT opened market for Internet Telephony with restriction only for PC - to - phone ( outgoing call ) and MPT regulated the price: MPT set up a floor for tariff of Internet telephony service not lower 0.10 USD/Min - By early 2004 MPT freely a price for Internet telephony - Foreign operators dominant market ( Mediaring,, Go 2 call, PC call, Net 2 phone etc. ) 21

22 !' IV. Standing issue Set up cost base guide line for tariff set up both in retail tariff and interconnection charge Control of Dumping price issue Measures to ensure the triangle benefit: State enterprise consumer. Interconnection issue Universal Telecommunication service funds Setting up a price for Public utilities services 22

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