COMPETITION – AN EFFECTIVE TOOL PROMOTING ECONOMIC EFFICIENCIES Mr. Trịnh Anh Tuấn Deputy Director General Vietnam Competition Authority Hanoi, August 2014

CONTENT I/ COMPETITION – A DRIVING FORCE FOR THE ECONOMIC DEVELOPMENT II/ ANALYSIS ON THE EFFECTIVENESS OF COMPETITION IN 3 PARTICULAR MARKETS MOBILE COMMUNICATIONS PAY TV AVIATION FUEL III/ CONCLUSION AND RECOMMENDATIONS

I. COMPETITION – A DRIVING FORCE FOR THE ECONOMIC DEVELOPMENT Enterprises growth Consumer welfare Economic effectiveness increased Creation of a competition environment “There is no growth without competition policy” - Kazuhiko Takeshima – Former JFTC Chairman “The heart of our national economy long has been faith in the value of competition” – US Supreme Court

MOBILE COMMUNICATIONS Communications industry has its own market entry barriers, including the legal barrier and natural barrier The market concentration level is relatively high

MOBILE COMMUNICATIONS In 1993, there was only one company providing the mobile communication services (Mobiphone) at the rate of 0,15USD/minute in Vietnam After Vinaphone entering the market in 1996, and Viettel in 2003, the rate was 0,065USD/minute, the method to calculate the rate also changed (block 6s+1)… Up to now, quality and price for the mobile communications services are more competitive, hence creating more choices for consumers (more new mobile applications: viber, zalo, …)

Market share of enterprises providing mobile communications in December 2013 Source: Communications Department of Vietnam

PAY TV Appeared in Vietnam 20 years ago Initially, there were several services providers (VTV, SCTV,…) of television cable with limited channels, broadcasting quality was not stable June 2014: - 34 enterprises provided Pay TV services - 4 main types: cable, satellite, landline and mobile. - 105 local and international registered channels - Private sector participation: K+ and AVG

Source: Authority of broadcasting and electronic information Market share of enterprises providing Pay TV services in the first 6 months in 2014 Source: Authority of broadcasting and electronic information

Viettel, VNPT and FPT entering the market in 2014 Since 1/3/2014, Viettel provided the pilot HD package in several regions with the charge of 85.000 VND/month, which is equivalent to 2/3 of VTVCab rate and half of HD services supplied by VTVCab In 2011, VTVCab increased the charge from 65.000 VND/month to 110.000 VND/month. However, VTVCab at the moment is struggling to compete for more customers by promotion programs.

AVIATION FUEL Prior to 2008: Vinapco is the only enterprise in the market providing aviation fuel => Vinapco unilaterally stopped supplying fuel for Jetstar Pacific in April 2008 Petrolimex entered the market Currently Petrolimex has 10% market share and Vinapco accounts for 80% market share in the aviation fuel market

III. CONCLUSION + Role of Competition Consumers Enterprises Government Have more consumption choices; Buy products of better price and quality Increase benefits for the community Enterprises Technology innovation; Increase quality of product/services; Decrease manufacture costs Government Enhance the transparency to attract investment Optimize the usage of resources Promote economic growth + Role of Competition

III. RECOMMENDATIONS The promulgation of new policies must ensure the competition principles The creation and maintenance of a competition environment must go in line with effective enforcement of competition law A strong competition authority

THANK YOU VERY MUCH Contact: Vietnam Competition Authority Address: 25 Ngô Quyền, Hoàn Kiếm, Hà Nội Tel: 04-22205002 / Fax: 04-22205003