Across the region, telcos are in a quandary as to how to deal with chat apps like Line, Whatsapp, and KakaoTalk. These messaging apps offer a free and fast alternative to SMS and have the potential to obliterate SMS returns for telcos. Especially with smartphones on the rise, this trend is inevitable. And telcos are feeling the burn.
Effective on April 1st, Vietnamese telcos Mobifone and Vinafone hiked up the prices of mobile 3G internet for their customers. Data packages went from VND 10,000 ($0.50) per month to VND 40,000 ($1.90), and student packages went from VND 15,000 ($.72) per month to VND 35,000 ($1.67). They also cut their data plan speeds from 7.3 Mbps for users back to 256 Kbps after they’ve exceeded their data plan by 100MB.
Vietnam had one of the cheapest 3G rates in the world, but these new price hikes will be a blow to that record.
All of this makes a lot of sense from a business perspective as most Vietnamese telcos are either owned by the government or closely associated with it. So they have a strong agenda to get as many users on board as they can since that’s the government’s vision. But such low prices can’t be sustainable – telcos can’t offer such rates and still grow, and chat apps have especially underlined this.
With the number of smartphones in Vietnam set to go over 30 million by the end of this year, it’s a real concern. The more people buy smartphones, the more likely they’ll use messaging apps, and the more likely SMS profits will plummet. So of course, the telcos are panicking and hiking prices. On the other hand, I think this is a much better response than Indonesian or Chinese telcos, who decided to build their own chat app competitors.
(Source: VNExpress)
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