Vietnam’s net phone revolution

CIOL Bureau
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HANOI: Ask foreign companies what they find daunting about doing business in communist Vietnam, and chances are they will list high telecommunications costs as a big factor.

A 38-year-old engineer who used to run a toilet-plunger business aims to change that.

Meet Tran Huynh Duy Thuc, founder of EIS or Electronics and Information System Inc. He says he will offer rates of five U.S. cents a minute to the United States and Australia - about one-twentieth of the $1.1 a minute consumers pay currently.

His company is poised to become on of the first Internet phone services, which were not allowed in Vietnam until July 1, but Thuc, has already tested the concept in high-tech hub Singapore, which hosted his flagship enterprise, One Connection.

"Vietnam needs to show the world the other face of it, the more advanced one" said Thuc, a native of southern commercial hub, Ho Chi Minh City.

The country of 80 million, which has had a history of war and colonialism, is still mostly agricultural. Access to the Internet was made available only six years ago and the country has just 7.5 phone subscriptions per 100 people.

One Connection's service would allow users to receive and make phone calls with regular phones from anywhere in the world with a single Internet account number.

Thuc said he had franchised the technology to U.S.-based Voice Net, Russia's RusComNet and Malaysia's biggest Internet service provider, Jaring, to launch the One-Connection service.

Franchisees had to pay up front $100,000 a year for the franchise licence and hand over between 20 and 25 percent of the total revenue they generated.

If all goes as planned, Thuc said, One Connection could also be the first Vietnamese-owned firm to list on the U.S.'s tech-laden exchange Nasdaq in two years.

Though One Connection was the inventor of the technology and one of the first ones to apply for state permission to launch the service in Vietnam, the request is still, being considered by the government.

Several other state-owned telecom firms have introduced low cost Internet-based phone calls to the public in July, stripping Thuc's company of its first-mover status.

But Thuc isn't flinching. He said once One Connection gets its license, it will strike back with aggressive pricing policies, offering competitive rates.

"Competition is no concern for us as our product quality is superior," Thuc said. The only obstacle remaining is the license to sell his service, he said.

© Reuters