Three major mobile service providers, Viettel, VinaPhone, and MobiFone, are seeking approval from the Ministry of Information and Communication to cut call tariffs by 15-20 percent.
The average cost of calling now is 1,200 VND per minute, and if a 20 percent reduction is approved, it will fall to 960 VND.
Viettel said it incurs a cost of around 800 VND for a one-minute call.
According to a forecast by UK-based emerging markets analyst Business Monitor International Ltd (BMI), average revenue per user earned by Vietnamese service providers will fall by 13.7 percent annually to 4.11 USD this year, and 3.8 USD in 2011.
Ahman Eddie, general manager of Ericsson Vietnam , said Vietnam 's telecom market has grown faster than that of other countries in the area but service providers are locked in a fierce battle over tariffs.
"Price competition will not bring stable development to service providers,” he said.
But BMI forecasts growth in Viet Nam's telecom market to surge thanks to the ongoing price war.
The service providers are aware of the consequence of the ongoing price war: falling profits and inability to make long-term investments, but they state several reasons to justify cutting charges.
A Viettel executive said it is done to reduce "fat." "A telecom corporation is fat if profits exceed 20 percent of turnover. It needs to reduce service charges to grow thin," he said.
Earlier this year telecom operators launched a series of promotions after the ministry rejected their demand to reduce mobile charges.
The ministry has responded by tightening promotion norms by issuing a circularin early July to clarify certain clauses of the Commercial Law on promotions by mobile service providers.
To make the circle complete, the mobile operators have again asked to cut call charges.
Last year Viettel had sparked off industry-wide tariff cuts by cutting its charges by 15-20 percent./.
The average cost of calling now is 1,200 VND per minute, and if a 20 percent reduction is approved, it will fall to 960 VND.
Viettel said it incurs a cost of around 800 VND for a one-minute call.
According to a forecast by UK-based emerging markets analyst Business Monitor International Ltd (BMI), average revenue per user earned by Vietnamese service providers will fall by 13.7 percent annually to 4.11 USD this year, and 3.8 USD in 2011.
Ahman Eddie, general manager of Ericsson Vietnam , said Vietnam 's telecom market has grown faster than that of other countries in the area but service providers are locked in a fierce battle over tariffs.
"Price competition will not bring stable development to service providers,” he said.
But BMI forecasts growth in Viet Nam's telecom market to surge thanks to the ongoing price war.
The service providers are aware of the consequence of the ongoing price war: falling profits and inability to make long-term investments, but they state several reasons to justify cutting charges.
A Viettel executive said it is done to reduce "fat." "A telecom corporation is fat if profits exceed 20 percent of turnover. It needs to reduce service charges to grow thin," he said.
Earlier this year telecom operators launched a series of promotions after the ministry rejected their demand to reduce mobile charges.
The ministry has responded by tightening promotion norms by issuing a circularin early July to clarify certain clauses of the Commercial Law on promotions by mobile service providers.
To make the circle complete, the mobile operators have again asked to cut call charges.
Last year Viettel had sparked off industry-wide tariff cuts by cutting its charges by 15-20 percent./.
