Logo of Phnom Penh Post newspaper Phnom Penh Post - Viettel scraps roaming charges

Viettel scraps roaming charges

People crowd beneath a Metfone logo in the company’s Phnom Penh office in October.
People crowd beneath a Metfone logo in the company’s Phnom Penh office in October. Heng Chivoan

Viettel scraps roaming charges

The decision by Vietnamese telecom operator Viettel Group to eliminate roaming charges on cross-border calls made between its networks in Vietnam, Cambodia and Laos could cost the company over $1 million a day in lost revenue. However, it could also result in more subscribers using roaming, generating additional revenue.

Viettel announced last Thursday that on January 1 subscribers of Viettel-owned telecom networks in Vietnam, Cambodia and Laos will be able to phone each other at domestic call rates.

“Users of Metfone in Cambodia, Unitel in Laos and Viettel in Vietnam will be charged at the local mobile fee when they make cross-border calls to each other,” Viettel managing director Nguyen Manh Hung said, according to Vietnamese media sources.

Vietnamese daily newspaper Vietnam News cited Hung as saying the decision to drop roaming charges, which run as high as $2 per minute, could cost Viettel’s networks in the three countries about two percent of turnover.

“At first, Viettel will suffer a loss of $1 million each day. However, we hope our customers will increase their calling time and internet access,” it said.

“Regardless, the policy will definitely promote trade and business among the three nations.”

Military-run Viettel operates in Vietnam and nine overseas markets with a total subscriber base of 90 million customers. The company posted revenue of $10.8 billion in 2015 with 20.8 percent year-on-year growth.

Metfone, Viettel’s Cambodian subsidiary launched in 2009, generated $256 million in revenue last year and remains the company’s most profitable overseas operation.

Im Vutha, spokesman of the Telecommunication Regulator of Cambodia (TRC), said yesterday that Metfone did not require the TRC’s permission to drop roaming fees, however, the strategy would likely result in lower revenues for both the company and the government as Metfone pays an annual licence fee as well as a tax on net profit.

Vutha suggested Viettel’s decision to drop roaming charges was likely a response to fierce competition from over-the-top (OTT) communications services such as Line and WhatsApp that bypass the traditional voice and messaging business of telecom operators.

“It is a new strategy of the company to attract more customers and to compete with OTT,” he said. “They could be facing a loss of revenue now and are trying balance the quality and service with the aim of gaining profit in the future.”

Marc Einstein, director of mobile and wireless communications Asia Pacific at Frost & Sullivan, said the rise of OTT communications platforms has been the “nail in the coffin” for international roaming. As Viettel could not stop its subscribers from using these platforms, by dropping roaming charges it could hope to encourage them to increase their usage of its standard voice and data services while abroad.

“Roaming is going down to zero anyways, so it makes sense for Viettel to try to skim some revenue from it,” he said.

Einstein said while international roaming has never been a big contributor to the revenue of mobile network operators, it is a highly profitable service as the physical costs of roaming are “minute”.

He said in the case of Viettel, connecting a subscriber on its network in one country with one of its networks in another has almost no actual cost. It is only when a mobile operator does not have a network partner in another country that it must pay charges.

Viettel stands to be among the first mobile network operators to scrap roaming fees for subscribers of its networks abroad.

In 2007, the European Union enacted legislation that forced European mobile service providers to lower their roaming charges for across the 27-member bloc. After considerable debate, members of the European parliament finally voted in October 2015 to eliminate mobile roaming charges altogether effective mid-2017.

ASEAN information and telecommunications ministers have also discussed abolishing roaming fees within the 10-member bloc. The issue was raised last month at the Cambodia, Laos, Vietnam (CLV) regional summit in Siem Reap, though no timeline was set.

Viettel and Metfone representatives did not respond to inquiries yesterday.

Additional reporting by Cheng Sokhorng

MOST VIEWED

  • NY sisters inspired by Khmer heritage

    Growing up in Brooklyn, New York, Cambodian-American sisters Edo and Eyen Chorm have always felt a deep affinity for their Cambodian heritage and roots. When the pair launched their own EdoEyen namesake jewellery brand in June, 2020, they leaned heavily into designs inspired by ancient Khmer

  • Omicron patients can stay home: PM

    Prime Minister Hun Sen has given the green light for anyone who contracts the SARS-CoV-2 Omicron mutation or any other variant to convalesce or receive treatment at home or in any other reasonable non-healthcare setting. The new decision supersedes a restriction on home care for

  • Cambodia records first Omicron community case

    The Ministry of Health on January 9 reported 30 new Covid-19 cases, 29 of which were imported and all were confirmed to be the Omicron variant. The ministry also reported 11 recoveries and no new deaths. Earlier on January 9, the ministry also announced that it had detected the Kingdom's

  • The effects of the USD interest rate hike on Cambodian economy

    Experts weigh in on the effect of a potential interest rate expansion by the US Federal Reserve on a highly dollarised Cambodia Anticipation of the US Federal Reserve’s interest rate hike in March is putting developing economies on edge, a recent blog post by

  • Cambodia’s first ever anime festival kicks off Jan 22 at capital’s F3 centre

    Phnom Penh's first ever Anime Festival will bring together fans, artists, shops and other local businesses with ties to the Japanese animation style for cosplay competitions, online games, pop-up shops and more on January 22, with Friends Futures Factory (F3) hosting. F3 is a project that

  • PM eyes Myanmar peace troika

    Prime Minister Hun Sen has suggested that ASEAN member states establish a tripartite committee or diplomatic troika consisting of representatives from Cambodia, Brunei and Indonesia that would be tasked with mediating a ceasefire in Myanmar. The premier also requested that Nippon Foundation chairman Yohei Sasakawa