According to VNPT, the Electricity of Vietnam has exploited its monopoly to set up exorbitant fees for electricity pole leasing, which has put big difficulties for telcos in providing services.

The telecom big guy suffers headache because of pole leasing fees

Vu Tien Duong, Deputy Head of the Business Division of VNPT, said EVN is charging very high in leasing poles for hanging telecom cables. Meanwhile, telcos themselves cannot install poles in many cities, because this may spoil the beautiful looking of the cities.

Duong said that the State needs to intervene in this case in order to ensure the benefit of involved parties. As there are many buyers, while there is only one seller – EVN, the seller has the right to set up the fees, while the buyers do not have the right to haggle.

Telecom companies and cable TV stations all have to lease poles. Under the current pricing mechanism, enterprises have to pay 20,000 at minimum for a cable per pole a month. Duong said that with the exorbitant prices, telecom companies would not be able to make profits.

The director of a telco has revealed that in order to avoid paying such exorbitant fees, his enterprise has to pay money to local electricity branches to get their support, or hang cables of illicit still. If accepting the high prices set up by EVN, no telco would be able to exist.

Duong from VNPT said on Buu dien that it is very difficult to develop fixed line services now. At some moments, the number of new subscribers and the number of left subscribers was equal.

While the demand for fixed line services has been decreasing dramatically, the costs have been staying firmly high. As a result, the more fixed line subscriptions develop, the bigger losses the telcos would incur.

Statistics show that the average revenue of a fixed line service subscription has decreased to 40,000 dong a month. It is estimated that there are 25 poles for every one kilometer of distance, and it costs 20,000 dong to hang a cable a month at minimum, enterprises would have to pay 500,000 dong at least for the pole leasing fee.

And if there are only 10 subscribers in the area, which bring the revenue of 400,000 dong, the revenue is not high enough to pay the pole leasing fee.

Amid the high pole leasing fee, since 2010, VNPT has kicked off a program on installing new poles for hanging telecom cables instead of hanging talecom cables on electricity poles. VNPT’s managers have also reached agreements with Viettel on sharing the same infrastructure items. This would help the two companies minimize the investment costs.

MOF to define pole leasing fees

Deputy Minister of Information and Communication Le Nam Thang has said that the Ministry of Construction has submitted to the government the draft decree on sharing infrastructure items of enterprises in different business fields. Under the decree, the Ministry of Finance (MOF) would set up the leasing fees to be applied throughout the country. The enterprises like EVN would not be able to set up the leasing fees as currently.

The intervention of the MOF would help basically settle the problems with pole leasing fees which have always been the headache for telcos.

In principle, the State encourages the sharing of infrastructure items. Meanwhile, EVN says the pole leasing fee is not the service named in the list of goods and services of which the State needs to control the prices.