The issue of unfair competition has reared its ugly head in the dispute between two major State-owned corporations, Viet Nam Post and Telecommunications Group (VNPT) and the fledging mobile phone service provider EVN Telecom, a subsidiary of Electricity of Viet Nam Corporation (EVN).

Pham Chi Lan, a member of the Prime Minister’s Research Council, expressed worries that unfair competition practices would hinder the enterprises’ ability to build on their own strengths at a time when Viet Nam is opening up to the global economy.

Why are connection disputes still arising between mobile phone service providers despite ministry arbitration efforts and clear regulations on the matter?

VNPT has been in an exclusive monopoly position for years so it wasn’t easy for it to give up this privilege and face competition. Government policy now rejects monopoly, but many economic players still attempt to benefit from their formerly privileged monopoly positions.

And it’s not only fledging enterprises like EVN Telecom that are facing difficulties. The same thing is happening to enterprises that have been in business for a long time. What does this mean? Rejecting monopoly is not easy, especially when VNPT itself doesn’t realise that it’s not a monopoly that makes it stronger, it’s competition. It doesn’t realise that monopoly is something it is granted, not something built up by talent.

What do you think about the future of our telecommunications market if unhealthy competition still exists?

I think that all units in the sector as well as the Ministry of Posts and Telematics are fully aware that we are going to join WTO and open our telecommunications market. If the situation cannot be improved, we could be in for serious consequences.

First of all, our telecommunications sector cannot grow stronger if our enterprises are busy undercutting each other. We are opening to the world, so it’s likely that we will be put at a disadvantage when we have to compete with stronger competitors. By rejecting monopoly in some sectors, the Government is striving for healthy competitive environment in which our enterprises can grow stronger together and cope with competition from outside.

Secondly, we are now in the process of integration so foreign telecommunications enterprises will be authorised to operate in Viet Nam in the near future. Disputes would have to be settled at the World Trade Organisation (WTO), and our prestige could suffer seriously.

In relations between mobile service providers, it’s a fact that new enterprises are dependent on VNPT’s network. Are these enterprises forced to grin-and-bear-it in cases of disputes with VNPT?

They shouldn’t have to. It’s no good if there is no order or fairness for all enterprises on the market. If they accept the situation, compromise or make concessions, competition in our telecommunications market could be distorted. That’s no good for VNPT, either.

Is an arbitrator necessary?

The Ministry of Posts and Telematics must issue forceful and clear decisions on matters relating to connections and give more support to new enterprises, not favour their own child, VNPT. If the ministry doesn’t do that, it loses credibility.

n It’s easy to find unhealthy competition in other sectors, isn’t it?

Yes. In the airlines sector, I could mention the dispute between Vietnam Airlines and Pacific Airlines. The electricity sector has also made many difficulties for consumers for a long time due to its monopoly, although EVN Telecom is now having trouble competing with other exclusive units.

Competition is a useful tool for economic development. The Government shouldn’t let some enterprises hold monopolies and become entrenched. In the future, we will need some giants in each sector instead of only one giant like today because our giants are much smaller than those from the outside.

If our giants learn to associate with others in their field, then they will be strong enough to compete with foreign enterprises when Viet Nam joins the WTO.

The Competition Administration Department is one of the units authorised to supervise markets. What is the department’s role as an arbitrator?