VietNamNet Bridge – Telcos scored a spectacular goal when they got the operation licenses for pay-TV services, despite the strong protest from existing televisions. However, they are meeting a new barrier in the market.
On August 6, 2013, the Ministry of Information and Communication (MIC) granted a license to FPT Televom to provide pay-TV services. Under the license, FPT Televom is allowed to provide digital cable pay-TV services throughout the country, and provide analog TV services in some localities, except Hanoi, HCM City, Hai Phong, Da Nang, Can Tho, Khanh Hoa, Lam Dong and Dak Lak.
Prior to that, in May 2013, the military telecom group Viettel also got the license to operate in the pay-TV market.
As such, just within a short time, two telecom groups were allowed to jump into the TV market, though the Vietnam pay-TV Association (VnPayTV) tried to block the way to the market by repeatedly requesting competent agencies not to allow telcos to provide TV services.
However, the telcos still cannot start providing services so far because they have not found suitable partners.
Viettel, which keeps high ambitions when joining the pay-TV market, has admitted that it still cannot connect with televisions to broadcast, while it cannot produce content itself.
Nguyen Manh Hung, Deputy General Director of Viettel, admitted that telcos are inferior to televisions in the market.
Televisions can produce TV programs itself, while they have existing infrastructure systems already, therefore, they don’t have the demand for cooperating with telcos.
Meanwhile, telcos cannot produce content and broadcast themselves.
The only solution for now is that telcos have to produce TV programs themselves for the broadcasting. However, according to Hung, this would be a great waste of resources, while making content is not the advantage of telcos.
Hung, while affirming that this is the biggest difficulty for telcos when joining the TV market, said Viettel has asked the Ministry of Information and Communication (MIC) to lay down the policy on the cooperation between cable TV service providers and televisions on the basis of commercial contracts.
“The cooperation would bring mutual benefits. Televisions would still make profits, while network operators have contents to provide services,” Hung said.
He went on to say that such a policy would help avoid the great waste of resources, while this would allow broadcasting TV contents to bigger audience community, especially to the subscribers in rural areas.
Viettel has also suggested the floor price mechanism which it believes is very necessary to prevent unhealthy competitions in the market.
Meanwhile, Le Dinh Cuong, Deputy Chair and Secretary General of VNPayTV, has denied the opinion that televisions have put difficulties for Viettel or any other telcos in order to block their way to the TV market.
Cuong said televisions have expressed their concern about Viettel’s competition behavior of offering the service fees lower than the current average level.
Viettel is reportedly offering the subscription fee at VND30,000-40,000 for rural subscribers.
At a meeting in September 2013, Vu Van Hien, former General Director of the Vietnam National Television (VTV), who is now Chair of VNPayTV, also expressed his worry that telecom groups, with powerful financial capability, may dump their services on the market to attract more customers.