ĐẠI HỌC UEH

TRƯỜNG KINH DOANH

KHOA KINH DOANH QUỐC TẾ - MARKETING

GROUP ASSIGNMENT
TOPIC
MONOPOLY AND COMPETITION IN THE
VIETNAMESE TELECOMMUNICATIONS INDUSTRY

SUBJECT: MICROECONOMICS
CLASS CODE: 23C1ECO50109705
CLASS: IBF001
GROUP: 02

Ho Chi Minh City - 2023

 LIST OF MEMBERS

Order Full name Student ID Role Distribution

1 Lưu Khánh Linh 31231024493 Leader

2 Nguyễn Hoàng Bảo Châu 31231023123 Member

3 Nguyễn Trà My 31231026567 Member

4 Lê Hoàng Thiên Ngân 31231025053 Member

5 Đào Anh Thư 31231020405 Member

6 Trần Thị Thùy Trang 31231022755 Member

 I

ABSTRACT

Our nation's economic sectors are gradually moving toward international

integration and complete competition. However, monopolistic industries still persist in
a large number of economic domains which require extensive research, and a clear
path for the field's advancement to competitive one. The goal of this paper is to
analyze how monopoly and competitive markets are expressed in the Vietnamese
telecommunications industry in the two time periods 1996–2004 and 2005– now,
based on basic knowledge of the subject Microeconomics. Specifically, the essay
investigates both the benefits that monopoly and competition bring to their firms and
consumers as well as the disadvantages that they have.

To support the argument made in this essay, the monopoly of VNPT and
competition among telecom companies including Viettel, MobiFone, and VinaPhone,
etc. are investigated. The study indicates that monopoly and competition cause both
huge positive and negative impacts on the society and economy. For competition, it
increases productivity, creates economic strength, and encourages research and
implementation of scientific and technical activities to enhance the competitiveness of
products, while having a monopolistic market results in damaging the business
environment as well as consumers’ demand coupled with doing harm on the social
welfare. Thereby, the group is going to suggest some possible measures to deal with
the drawbacks of each market structure.
 II

TABLE OF CONTENTS
ABSTRACT.............................................................................................I
LIST OF TABLES..................................................................................III
LIST OF ABBREVIATIONS................................................................IV
I. INTRODUCTION...............................................................................1
1.1 Reason for research......................................................................1
1.2 Research objectives......................................................................1
1.3 Research methodology.................................................................1
1.4 Research structure........................................................................1
II. CONTENTS........................................................................................1
2.1 Table of previous research............................................................1
2.2 Telecommunications status in Vietnam........................................3
2.2.1 Vietnamese telecommunications market (1996 – 2004)........3
2.2.2 Vietnamese telecommunications market (2005 – now).........8
III. CONCLUSION AND SUGGESTION............................................13
3.1 Conclusion.....................................................................................13
3.2 Suggestion.....................................................................................14
3.3 Limitation......................................................................................15
REFERENCES........................................................................................16
 III

LIST OF TABLES
Figure 1. Table of previous research
Figure 2. Viettel Revenue 2000 - 2012 (trillion VND)
Figure 3. Market share of firms in telecoms
 IV

LIST OF ABBREVIATIONS
GTel Global Telecommunications Corporation
IoT Internet of Things
FPT The Corporation for Financing Promoting Technology
NGN Next Generation Network
SPT Saigon Postel Corporation
VAT Value-added Tax
VNPT Vietnam Post and Telecommunications
 1

I. INTRODUCTION
I.1 Reason for research
Humans always need to connect and exchange information with each other, and
that need is growing exponentially. Thus, telecommunications are considered one of
the most distributed industries to the development of the world in general and Vietnam
in particular, which helps improve social life as well as the economy. Under the impact
of the 4.0 revolution, the telecoms’ opportunity to transform becomes much brighter
when several new concepts relating to technology have appeared such as Big Data,
IoT, Artificial Intelligence, etc. The continuous rise of telecoms industry will be
evidence of the modernity of a country.
Having realized the importance of telecoms in the national innovation process,
the group decided to research the topic “Monopoly and Competition in
Telecommunications industry”. This study will give an insight into the formation and
development of Vietnamese telecoms industry as well as how its market structure has
changed through the period. Thereby, what benefits and drawbacks of each structure
will be known.
I.2 Research objectives
This study aims to understand the characteristics and influence of monopoly
and competition in the telecoms industry as well as others. Then, the solutions can be
suggested to minimize the negative effect of monopoly and competition in the market.
I.3 Research Methodology
- Linking theoretical microeconomics basis with practical knowledge
- Collecting data from the Internet, books, articles and previous research. Data is
mainly from official articles.
I.4 Research structure
- Analyzing monopoly state in telecoms market (1996 – 2004)
- Analyzing competition in telecoms market (2005 – present)
- Suggesting solution for the weakness of monopoly and competition in the
market.
II. CONTENTS
II.1 Table of previous research
 2

Figure 1: Table of previous research

Ordinal Research Method/

Name of research Summary
numbers Scale

The study as a whole seeks to

catalogue many of the
The Impacts and Benefits substantial, tangible benefits for
of Structural Reforms in consumers and for small and
the Transport, Energy and medium businesses arising from
Telecommunications APEC members’ structural
1
Sectors in APEC reform efforts in recent years,
Economies (Professor focusing on the transport, energy
Christopher Findlay, and telecommunications sectors.
2011) One of the case studies of the
research related to the
Vietnamese telecoms industry.

The empirical
evidence for this
study is primarily This paper analyzes the
Learning, Upgrading, and
based on 42 semi- industrial success of the
Innovation in the
structured telecommunications industry in
Telecommunications
interviews with Vietnam using developmental
Industry in Vietnam: A
2 government rent management analysis
Rent Management
officials, firm (DRMA). Moreover, it
Analysis
managers, explained the failure of the
(Christine Ngoc Ngo,
suppliers, workers, VNPT monopoly and the rise of
2014)
and industry Viettel.
experts from 2010
to 2012.

3 Competition review of the The report provides an

Vietnamese Telecom introduction to the current and
 3

previous market structure of the

industry, highlights some events
(VNPT dominant role) and their
impact and reviews key
Sector (Nguyen Thanh Ha,
structural elements –
Pham Quang Thanh,
government, operators and
2005)
consumers. As a point of
reference, where applicable, this
report provides international and
regional comparisons.

II.2 Telecommunications status in Vietnam

II.2.1 Vietnamese telecommunications market (1996 – 2004)
 The establishment and development progress of VNPT
During the 27 years of formation and development, VNPT has always been a
pioneer in the telecommunications revolution with many outstanding achievements. It
can be said that the advent of VNPT contributed to a more promising digital life for
Vietnamese people. On June 26, 1996, VinaPhone (VNPT’s subsidiary) - the first
mobile network of Vietnamese people - was opened. It was not only reflected in the
fact that 100% of this enterprise's capital was from domestic sources but also in human
resources. (VinaPhone: Hành Trình 25 Năm Tiên Phong Về Công Nghệ Và Chuyển
Đổi Số, n.d.). More importantly, VinaPhone was also the first mobile network to
deploy fixed-to-mobile messaging. From 1996 to 1997, mobile phones were unfamiliar
to people; However, VinaPhone has contributed significantly to the telecom revolution
in Vietnam when making mass customers know more about mobile.

Additionally, throughout those 2 years, VinaPhone network only covered 18

provinces and cities, but by 1999, owing to the rapid quality development and the
diversity of services, VinaPhone became the first mobile network to cover 100% of
provinces and cities nationwide. This was a great achievement and also a great effort
that VinaPhone mobile network had after nearly 3 years, making VinaPhone the
number one telecommunications service provider in Vietnam. (Chi Tiết Tin Tức -
 4

VNPT, n.d.). As part of the rapid development of new services to increase the number
of subscribers and the quality of customer service, the prepaid subscription service
launched at the end of 1999 had created a boom in subscriber growth and created new
advantages for the VinaPhone mobile network. With this event, VinaPhone continued
to mark the milestone as the first mobile network to deploy prepaid service packages,
accelerating the roadmap to popularize mobile services in Vietnam. Also in the same
year, VinaPhone was the first operator to launch international roaming services to 4
countries and territories, namely Australia, Singapore, Taiwan and Hong Kong. (Chi
Tiết Tin Tức - VNPT, n.d.). With the above achievements and several more, from the
first time it was launched to the next 8 years, VNPT was a state-owned company and
dominated the telecoms market.
 VNPT was a price maker in telecoms market
As the sole supplier in the market, VNPT was given a right to influence the
price of its output in the telecom industry. The company gained a huge profit from
consumers since they had no other choices except for VinaPhone or MobiFone (both
under VNPT) when making calls and messaging. Some may ask why no telecom
companies entered the market to break the monopoly and be in a price competition
with VNPT; However, constructing a whole new telecom network at that time required
a great cost that was not easy for any firms to handle. Whereas, if they insisted on
launching another telecom service, they had to mutually use the VNPT network which
only brought more money to their rival. In its glorious time, VNPT had adjusted prices
ignoring the government’s regulation. More specifically, in the period 1993-1997,
VNPT made a profit from the disparity between the actual phone installation price and
its list price, which was nearly 1,480 billion VND (Hưng, 2004c). The Supreme
People’s Procuracy of Vietnam appealed to VNPT over this as it violated the price law.
Nevertheless, the government closed its eyes and allowed VNPT to use that money to
invest in its basic infrastructure. The public expected that after this scandal, VNPT
would adjust the installation fee, yet in 1997, the company was brought to light that it
still kept the price 500,000 VND higher per phone. According to the General
Department of Post and Telecommunications, there were 745,000 phones installed in
1997 and 1998, multiplied by the difference in price above (nearly 500,000 VND), the
profit VNPT earned amounted to trillions of VND. But it is unreasonable that in
 5

VNPT’s 1999 plan submission to the Ministry of Planning and Investment, the fee
difference was 0 (Hưng, 2004b). It can be seen that VNPT, relying on the monopoly
state, caused frustration among the public by padding the cost to increase the surplus.
The inspection results published in newspapers showed that the interest rate on
VNPT's freight rates was about 20-30%, even over 40% while the allowed profit rate
was only 5.4% (Hưng, 2004a). As reported by the interdisciplinary working group in
2004, for domestic mobile service, VinaPhone charged consumers 49% higher than
tariff price (2001), 54% and 58% higher in 2002 and 2003 respectively. Similarly,
MobiFone charged consumers 58%, 59% and 57% higher than the tariff price in 2001,
2002 and 2003 respectively (Hưng, 2004c). Thus, users seemed to lose half of the
amount paid for the aforementioned service. In a short period from 1997 to 2004, the
price elasticity of demand of VNPT’s customers seemed to be approximately zero. In
other words, despite dissatisfaction, they were insensitive to changes in price because
of the necessity of digital communication.
 Monopoly state brought a huge profit to VNPT
As VNPT had complete control over the provision of telecommunications
services, it was allowed to reap significant profits. With VNPT's significant
investments in technology and network development, in August 1996, Vietnam had 1
million telephone subscribers and became one of 60 countries with a telephone
network of over 1 million subscribers. (Những Mốc Phát Triển Quan Trọng Của
VNPT, n.d.). Two years later, total revenue of VNPT service increased by 20%. In this
year, Vietnam continues to be ranked second in the world in terms of phone
development speed and over 2000 billion VND were paid to the state budget. (10 Sự
Kiện Nổi Bật Của Bưu Điện Việt Nam Năm 1998, n.d.). Moreover, VNPT had a record-
breaking year in 2003 with nearly 25 trillion VND in total revenue (equivalent to 1.6
billion USD) and over 4 trillion VND in state budget payments. (VnExpress, n.d.).
More importantly, year 2004 witnessed an event that VNPT officially launched the
new generation telecommunications network (NGN) for the first time using packet
switching technology, allowing support for providing a variety of services from
traditional to a series of high- quality broadband services. Thus, VNPT's total revenue
reached 30,662.77 billion VND, surpassing the plan by 2.38% - a 15.65% increase
compared to 2003, which was 25 trillion VND. Also, VNPT developed 2,631,836 new
 6

subscribers, with mobile phone subscribers increasing by 71.36%, while landline

phone subscribers increased by 17.12%. (VNPT Sẽ Là Tập Đoàn Kinh Tế Mạnh, n.d.).
All of the above numbers have proved that the monopoly state not only brought to the
business a potential market power but also made it more embattled in the industry.
 Monopoly market was a safe choice at that time
Though there were some price-related troubles in a monopoly market, it
seemed to be the most suitable market structure to be chosen for Vietnam at that time.
Given the historical context of the time, the government wanted to maintain control
over the telecommunications sector to ensure national security. In the Vietnamese
government’s economic reform agenda, the telecommunications industry was one of
the most important sectors to national defense and development (The
Telecommunications Industry | 4 | a Leap of the Giants | Christine, 2020). Two
longtime government officials working in the industry explained that Vietnam’s
leaders stated the need to retain complete control over the telecommunications industry
in order to sustain the nation’s security and social stability, which was primary to
economic development (interviews, Ha Noi; June–July 2011) (The
Telecommunications Industry | 4 | a Leap of the Giants | Christine, 2020). In other
words, monopoly, at that time, was the most optimal solution to prevent our country
from leaking information and other related issues. Therefore, the industry at that time
consisted of just one state-owned provider: VNPT, a government unit (and later a
state-owned monopoly).
Another advantage that makes countries, including Vietnam, apply monopoly
power in the telecommunications industry is the potential for economies of scale.
Especially in the stage of developing a socialist-oriented market economy, granting
monopolies to businesses helps control the entire market and achieve maximum
operational efficiency by allocating fixed costs to a large number of customers. This
can lead to lower average production costs and increased profits, allowing businesses
to invest in infrastructure and innovation. Moreover, VNPT employed a cross-
subsidization strategy, utilizing the profits from its more lucrative services to subvent
its less profitable services. Traditionally, VNPT has been the only operator to embrace
the obligation to provide universal services in both the cities and rural areas. New
operators have chosen to provide services only in areas that are profitable, such as
 7

Hanoi and Ho Chi Minh City (The Impacts and Benefits of Structural Reforms in
Transport, Energy and Telecommunications Sectors | APEC, n.d.). By applying this
strategy, VNPT not only helped the outback expose itself to telecoms but also gained
more for its own. Hence, the more profitable the business is, the larger the tax it pays
to the government. And in terms of social benefit, the monopoly helps the authority
with some welfare projects as well as maintaining public constructions.
 Monopoly inevitably raised issues
However, it is undeniable that monopoly was believed to bring more
drawbacks to the industry than benefits. It must be the consumers who were negatively
affected the most when the telecommunications market was a monopoly because the
firm can charge unpredictable prices. That is called price-fixing. This is due to the fact
that the monopoly sold essential goods and services that were hardly substituted.
Hence, consumers had no alternatives but to continue buying the product though the
price was high. It would be especially true when the demand for telecommunication is
inelastic, which means consumers are less sensitive to price changes. An example of
this case is the telecommunication industry in Vietnam from 1996-2004, where the
market was dominated by VNPT. In 2001, while the General Department of Post and
Telecommunications had a policy of reducing mobile phone and Internet fees, VNPT
decided to increase Internet access fees via mobile phones which caused frustration
among the public. The average rate that could bring profit to business was only from
600 to 900 VND/minute (including mobile phone and Internet charges). However,
VNPT chose to charge higher fees, for instance, at 1,750 VND/minute (with VAT) for
prepaid subscribers (VnExpress, n.d.). If the network was slow, customers had to pay
more because checks were calculated on an hourly basis. As a consequence, the users
would be negatively affected by the inflated bills, causing chagrin in society.
Moreover, despite the fact that consumers were charged a high fee, the product
quality that they received sometimes did not meet their needs and was incompatible
with the price. This is attributed to the fact that monopolistic companies often focus on
investing in what they want to enhance their revenue considering the absence of
fluctuation in monthly customers. Furthermore, customer service by monopolies is
frequently dreadful as they are not accountable to the same forces as competitive firms.
For example, VNPT’s customers during 1996-2004 bear with many dropped calls and
 8

the Internet network continual breaking, meanwhile, the company handled problems
reluctantly and did not give customers clear explanations, leading to frustration among
society that they did not receive proper service compared to the massive amount spent
on VNPT.
In a monopoly market, a firm can use price discrimination, which may benefit
the business but do harm to customers. Price discrimination works by extracting
consumer surplus and transferring it into producer surplus, thus reducing consumer
benefit. In other words, the more a monopolist differentiates prices, the more surplus it
has. Furthermore, when a business sells products at a wide range of prices, it will
coincidentally create a barrier deterring others from entering the market. As a result,
the market power of the monopoly company can be reinforced. Regarding the telecoms
industry, VNPT used to apply price discrimination offering consumers several
packages with different deals such as the G200 package priced at 260,000 VND, the
G400 package priced at 417,000 VND, the G600 package priced at 570,000 VND, etc.
(VnExpress, n.d.).
Another downside of the monopoly market is that firms adopt the monopolistic
characteristic of facing inelastic markets because they command absolute or nearly
absolute market share, so they can make a profit without much effort. This causes the
establishments to be frequently unaware of the need to innovate their technology in
order to minimize input costs during production. Thus, degeneration of the industry
can be the case, leading to difficulties in catching up with the progression of the world
and making outstanding developments. Also, stagnant technology may lead to inferior
products and a lack of merchandise to meet the market’s demand. Moreover, though
the producer surplus in the monopoly market is quite large, the consumer surplus can
be zero, even receiving negative value. As a result, the total surplus cannot improve,
which consequently slows down the development of the economy.
II.2.2 Vietnamese telecommunications market (2005 – now)
 The competition among three telecoms “big bosses”
The predecessor of Viettel was Sigelco, established in 1989 as an electronic
device company. In 1993, Sigelco became Viettel and step by step planned to enter the
telecoms market. After years of preparation, Viettel officially joined the market in
 9

2000 but did not leave any impression until 2005, when it started to break up the
monopoly of VNPT in the mobile service market.
In 2005, the market witnessed a race to massively reduce service prices with
mass promotions of service providers to attract customers. Viettel focused on
satisfying customers to gain trust and loyalty among them, which can help them
constitute a larger market share and break the monopoly. However, 2005 seemed to be
a hard time for Viettel because it still relied too much on VNPT. Many 098
subscriptions of Viettel, when calling VNPT subscriptions, could not connect. This
was a result of the fact that VNPT did not supply enough connection capacity to
Viettel, just under 50% of the actual needs. In the first half of 2005, Viettel sent 8
official dispatches requesting VNPT to increase connection capacity to make calls
from Viettel's network to VNPT's network run smoothly, but the response was not
given due to the port numbers of the switchboards TOLL/VTN is over and investment
in these switchboards is limited. At that time, if VNPT had insisted on their plan,
Viettel would have been bankrupt (Thanhnien.Vn, 2005). In 2006, service providers
(Viettel, VinaPhone, MobiFone) continued the competition by shifting their attention
from lowering service charges to competing on service quality, which is a crucial
component in attracting and keeping clients (Hà, 2006). Though being believed to be a
decisive element in breaking up VNPT monopoly, Viettel at this time was too “new” to
have any impact on its rival. More clearly, according to a survey conducted among
readers of VietnamNet and e-Chip magazine, only about 16% of mobile phone users
would choose Viettel Mobile network if they had to choose the mobile network again;
while more than 50% of users would choose MobiFone network, 28% for VinaPhone
network (and only 4% choose S-Fone network) (Hà, 2006). It was apparent that Viettel
Mobile applied intense discount campaigns and promotions, but the service quality
was not guaranteed, causing many customers to end up leaving. More than ever,
companies should know that the quality of service determines the choice of customers.
However, the situation has changed since Viettel became the largest firm
providing 3G networks in Vietnam (2009). In 2010, when VNPT set a target of
revenue of 100,000 billion VND to maintain its leading position, there were many
concerns whether VNPT would achieve its goal. This was understandable because, at
this stage, Viettel began to gain revenue and profit of nearly twice as much as the
 10

previous year. Specifically, by the end of 2010, VNPT achieved revenue of about
101,000 billion VND, profit of over 11,000 billion VND, while Viettel achieved
revenue 10,000 billion VND less but profit was roughly 15,500 billion VND higher.
By 2011, for the profit index, Viettel was twice as high as VNPT (Viettel: 20,000
billion VND, VNPT: 10,000 billion VND). The key factor determining a company's
position is profit, and with all the data above, we can see that Viettel began to surpass
VNPT in the race. Ultimately, at the end of 2012, for the first time, Viettel surpassed
VNPT in both revenue and profit, becoming the No. 1 telecommunications enterprise
in the market. In the current situation, Viettel achieved pre-tax profit of VND 27,000
billion (after tax of more than VND 24,000 billion); In contrast, VNPT only gained a
profit of nearly one-third of Viettel when it reached VND 8,500 billion (Nga, 2016).
The bar chart below illustrates the revenue of Viettel in the period 2000 – 2012.
Figure 2: Viettel Revenue 2000 - 2012 (trillion VND) (Ngoc Ngo, 2014)

In 2015, Viettel accounted for more than 50% of the mobile subscriber market
share, corresponding to about 57 million subscribers and keeping a very far distance
from the other two operators in terms of market share as well as number of subscribers
(Thông, n.d.). This network was considered to be more professional in marketing,
 11

sales, and communication. For MobiFone, it was still considered to have the best
professional business style and customer care. In addition, MobiFone had an advantage
in the southern region (accounting for a large market share); but in Hanoi and the
northern provinces, the number of subscribers was not as high as VinaPhone.
Specifically, in Hanoi, MobiFone's market share was just over 10% (Thông, n.d.).
VinaPhone had advantages in network infrastructure in Hanoi and the northern region.
Despite such advantages, compared to Viettel and MobiFone, VinaPhone still had to
stand behind in customer care.
According to the latest data published by Ookla, VinaPhone is still the mobile
carrier with the fastest speed and the best stability in Vietnam, by the end of June
2023. In terms of network latency, VinaPhone is at the top of the rankings with a
latency of only 34 ms, followed by MobiFone with 36 ms and Viettel with 40 ms,
respectively. In terms of consistency, VinaPhone continues to maintain its leading
position with a very high stability level of 94.8%. Viettel and MobiFone continue to
stand in the remaining two positions with stability of 93.6% and 89.5%, respectively
(Nam & Nam, 2023). It can be easily seen that the competition among these three
network operators will continue in the future since each has their own strength in a
particular area.
 Small telecoms firms had troubles in business
According to Minister of Posts and Telecommunications Do Trung Ta, in 2004,
the telecommunications industry was growing at a high rate of approximately 15% and
was initially competitive. The appearance of Viettel in October 2004 truly created a
new dynamic for the domestic mobile information market. 2004 also saw the explosive
growth of numerous new internet and telecommunications companies, including SPT,
FPT, etc. Thus, at that time, the total number of businesses participating in our
country's mobile information market was four businesses. These businesses other than
VNPT brought in roughly two trillion VND in total revenue (Báo Nhân Dân điện tử,
2020).
In fact, VNPT and Viettel still held a large market share (Figure 3). Taking
advantage of the power in their hands, VNPT and Viettel had expanded strongly,
continuously oppressing small network operators and increasing rates. It could be
 12

clearly seen that small network operators had extremely limited survival space. They
did not

have the ability to participate in the “money and power” game with the two “big guys”
in the telecommunications industry at that time.
Figure 3. Market share of firms in telecoms (MIC 2012)
The competition between 2 “giant” firms and others smaller officially began
when VNPT arbitrarily cut Hanoi Telecom's connection channels without any written
agreement between the two parties. This not only violated the Telecommunications law
but also damaged the finances of Hanoi Telecom and Vietnamobile. Additionally, in
previous times, both Vietnamobile and GTel Mobile had accused VNPT and Viettel of
increasing transmission channel rental prices by up to 300%, causing disadvantage to
tiny businesses (VnExpress, n.d.). The core purpose of competition is to ensure that the
buyers and sellers have the right to choose among various products and services with
competitive prices. However, if VinaPhone, Viettel and MobiFone who account for
most of the market share make an agreement secretly, the competitive market will
easily lose its characteristics. In 2013, all three firms simultaneously increased 3G
price and changed charge calculation blocks with the identical charging method and
price as well as the packages (VCCorp.Vn, 2021). It not only caused difficulties to the
customers but also set a barrier for other companies since they lack frequency
 13

resources and policies. This can be considered as unfair competitive behavior which
was against the provisions of Article 11 of the Competition Law on abuse of dominant
market position. (Hoàn, 2013)
 Is competition a good market structure?
Thanks to competition between businesses, consumers have the opportunity to
receive increasingly rich and diverse products with quality and price suitable to their
abilities. Viettel and VNPT with super promotions aimed at offering free calls or
launching sim packs with high promotional accounts to attract more customers. For
instance, prepaid customers of Viettel received information about the arrival of VT200
- Viettel's package to start the race to reduce mobile plan price (2010). On April 20,
2010, Mobifone and Vinaphone launched a postpaid network plan "to celebrate
International Labor Day": new postpaid customers of Vinaphone and Mobifone would
be entitled to free 10 minutes of the first on-network call for one year, and several
promotions to attract customer that these firms have released. (Nhà mạng cạnh tranh,
khách hàng hưởng lợi, 2010, May 19). The main purpose of the in-network call free
promotion was to create a change in consumers' thinking about the incentives of
postpaid services. If a mobile network does not create benefits for customers, it would
be immediately responded to by customers.
Competition is also beneficial for the companies. In fact, the power of
competition is apparent because when a new carrier was born, the old carrier had to
improve its own capacity and had to do better and be more responsible than before.
Competition is the driving force for business development, motivating businesses to
find ways to improve their production and business efficiency. The two leading
telecommunications corporations in Vietnam - Viettel and VNPT have different goals
and aspirations. Yet the common point is that they are trying to surpass themselves and
their rivals to become great Vietnamese enterprises, bringing great benefits to the
country.
III. CONCLUSION AND SUGGESTION
III.1 Conclusion
In summary, from 1996 to 2004, the market, consumers, and the telecoms
economy were all significantly impacted by the VNPT's monopoly. During this time,
VNPT was Vietnam's only telecom provider, hence it had significant control over
 14

terms of cost, level of service, and technological advancement. Due to the absence of
competition, VNPT was able to establish its dominance in the industry, which could
have a detrimental effect on customers. There were less options for consumers, and
they had to deal with more expensive and lower-quality services. The industry's
inability to innovate and grow technologically was another consequence of the lack of
competition.
Conversely, since 2005, the telecommunications industry has seen substantial
improvements as a result of the advent of competition. New competitors have brought
about better service quality, more options for customers, and competitive pricing.
From an economic perspective, the competition has spurred increased investment and
innovation, benefitting the market as a whole. However, the competitive market still
has some drawbacks that need solving.
Overall, the transition from a VNPT monopoly to a competitive market has had
a positive impact on consumers, the market, and the economy. To maintain fair
competition and optimize the advantages for all stakeholders, it is crucial that the
telecommunications sector is continuously monitored and regulated.
III.2 Suggestion

Telecoms market, about a decade ago, was monopolistic, causing many

inadequacies for the public. Therefore, applying a price ceiling is one of the anti-
monopoly measures. The government should apply this method in order to prevent the
business from increasing prices beyond the regulated level to earn huge profits. In this
way, if a firm wants to make a profit, it must reduce prices to increase the quantity
supplied, instead of doing the reverse. However, there is a more extreme solution that
Vietnam has applied, which is to break up the monopoly. At that time, the former
general director of VNPT, PhD Mai Liem Truc, saw through the limitation of the
monopolistic market. He believed that if the market had not been opened, the mobile
price would have been high, causing stagnancy. Additionally, under the pressure of
international integration, it will be forced to open the market to foreign countries,
which increases the danger of losing the Vietnamese telecoms market to foreigners
(Ly, 2023). Therefore, there is no other way but to open the market for other firms to
join. Only then will prices decrease and quality improve thanks to an invisible force of
competition. To eradicate monopoly, the General Department of Post and
 15

Telecommunications has built a 10-year strategy from 2000 to 2010. Specifically, by

2005, newbies had to constitute 30% of the market share, and by 2010, the market
must completely turn into a competitive one (Ly, 2023).
Nevertheless, it cannot be denied that every market has weaknesses. In a
competitive market, many firms still do not “fair play”, they use dirty tricks leading to
unfair competition. With a view to overcoming this problem, it is required that many
parties have to join hands. Regarding the government, it should strictly enact laws on
anti-unfair competition. The authority needs to properly implement sanctions to punish
unfair behavior so that businesses can truly be equal in the market. For the businesses,
they must comply well with regulations as well as build their own smart coupled with
professional competition strategy. Consumers can also contribute by boycotting brands
or companies with bad behavior, putting pressure on violating businesses.
III.3 Limitation
When researching the monopoly market from 1996-2004, there are very few
documents and research about the current market situation, making analysis difficult.
Therefore, some opinions in the article are still subjective.
 16

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