The local market for pay television services is expected to see fiercer competition and lower fees as major telecom providers FPT Telecom and Viettel join for a piece of the action from April 1 on.

Viettel, a military-run telecom company, has piloted its cable TV services in Hanoi, Ho Chi Minh City, and some other provinces since March 2013.

Though Viettel has yet to announce its official fee rates, sources said that the company will likely charge as little as VND30,000 (US$1.5) a month for its lowest package.

Current fee rates fixed by other cable TV service providers such as HTVC and SCTV are around VND77,000-110,000 a month.

If Viettel’s official fee rates are that low, the pressure on its major competitors including HTVC, SCTV, K+, VTVCab, and VTC will be huge.

One of Viettel’s competitive edges is its availability of some 200,000 km of cables nationwide.

The company said it will cut the average cable coverage distance from its cable connecting points to local households from 350m down to 200m, and even to 100m by 2015.

FPT Telecom, another major provider in cell phone and internet networks, also enjoys several advantages over its pay TV service competitors in having an adequate nationwide network.

The company is also highly experienced in pay TV services; since 2006 it has offered Internet Protocol Television (IPTV) services, a system through which television services are delivered using the Internet protocol suite over a packet-switched network such as a LAN or the Internet, instead of being transmitted through conventional terrestrial, satellite signal, and cable TV formats.

The addition of the cable TV services serves to realize FPT’s goal of offering its clients multiple options including the Internet, interactive TV, High Definition TV (HDTV), and landline and mobile telephone all on a single connection, its representative said.

“We hope to launch our digital pay TV services in Hanoi, HCMC, Da Nang, Can Tho, and some other provinces by the second quarter of this year while making analog pay TV available to the remaining cities and provinces,” said Nguyen Hoang Linh, FPT Telecom’s vice CEO.

Lower fees, higher quality?

According to expert opinions, the local pay TV market will see drastic positive changes in the coming time following the entrance of Viettel and FPT Telecom.

A race to reduce fees among the local service providers is very likely to be in the air, experts predicted.

Some established providers in pay TV services such as K+ and SCTV have recently offered discounts and attractive service packages to keep their current clientele and lure more from their competitors.

The quality of the services will likely improve as competition will be notably fierce, experts added.

However, the leader of a local telecom company asserted that there will not be much competition in monopolizing sports league games, as this would result in unreasonably high prices for the games.

“If local service providers purchase the games’ copyrights together, they will pay lower prices. Then each provider will have their own development of the games’ content in healthy competition among one another,” he noted.

A plan to develop local radio and television services by 2020, which was approved late last year, expects that 60-70 percent of households nationwide will use pay television services by that time.

The plan also highlighted the need for all radio and television services to switch from analog TV to digital terrestrial television by 2020.

According to national statistics announced in 2011, TV viewers nationwide would have to spend a staggering VND9.1 trillion ($433.6 milion) buying new reception devices for digital services.

There are roughly 18.2 million households with television sets in Vietnam. Among them, nearly 12.6 million currently use antennae.