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Impact of promotional forms on the business activities of Mobifone mobile telecommunications services of VNPT Posts and Telecommunications Group - 17


11. Cost of giving money, value of card recharge program "New colors"

(Unit: VND)


Target

Amount

New colors

New development prepaid subscribers

1. Cost of giving money to account upon activation


- Pre-loaded set 50,000 VND

85,743,510,130

- Pre-loaded set of 100,000 VND

302,200,040

- Pre-loaded set 200,000 VND

254,000,015

- Pre-loaded set 300,000 VND

25,832,400,000

2. Subscribers recharge cards 2,3,4


- Face value 50,000 VND

20,399,827,195

- Face value 100,000 VND

24,300,600,200

- Face value 300,000 VND

8,596,349,800

- Face value 500,000 VND

13,449,817,880

Active prepaid subscription

Cost of giving money when recharging card


- Face value 50,000 VND

34,556,535,965

- Face value 100,000 VND

32,951,735,615

- Face value 200,000 VND

7,915,058,425

- Face value 300,000 VND

6,750,835,920

- Face value 500,000 VND

16,465,061,060

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Impact of promotional forms on the business activities of Mobifone mobile telecommunications services of VNPT Posts and Telecommunications Group - 17

(Source: Mobifone Planning - Sales & Marketing Department)

12. Total advertising and communication costs of Mobifone in 2009

(Unit: VND)


STT

CRITERIA

EXPENSE

I

Advertising costs

150,676,236,364

1

Media

20,600,000,000

2

Big billboard

25,460,781,818

3

Neonsign Advertising

2,454,545,400

4

PR and event organization

30,800,000,000

4.1

As per company directive

28,300,000,000

4.2

Join another program

2,500,000,000


6

Sponsorship

6,480,000,000

7

Other types

5,881,909,091

II

Publications

32,561,000,000

TOTAL COST

183,273,236,364

(Source: Mobifone's Planning - Sales & Marketing Department)


II. Factors regulating promotional activities in the mobile telecommunications sector

3.5. Commercial Law and related documents

1.1. Law on Commerce of Vietnam 2005, 11th National Assembly, 7th session, No. 36/2005-QH11

This is the first legal document that can be mentioned that clearly states the concepts and regulates a number of related issues. First, the Commercial Law clearly states the concept of promotion in Article 88, the forms of promotion in Article 92, the concepts of goods and services being promoted, and goods and services used for promotion in Articles 93 and 94. These concepts have been mentioned in Chapter I of the thesis.

In this Law, the State also clearly stipulates the rights and obligations of traders conducting promotions in Articles 95 and 96. Accordingly, traders have the right to “(1). Choose the form, time and location of promotional goods and services used for promotion; (2). Specify specific benefits that customers enjoy in accordance with regulations on promotional value limits, maximum discount levels for promotional goods and services...; (3). Hire traders providing promotional services to conduct promotions for them; (4). Organize the implementation of promotional forms prescribed in Article 92 of the 2005 Commercial Law”.

Traders also have obligations such as following the correct procedures and formalities prescribed by law to carry out promotional forms, publicly announcing information about promotional activities to customers according to regulations as well as properly implementing the committed promotional program. Particularly for promotional forms


In addition to lucky programs, traders must deduct 50% of the announced prize value into the state budget in case there is no winner, each specific case is regulated more clearly by the Ministry of Trade. In addition, traders are also obliged to comply with the agreements in the promotional service contract if the trader conducting the promotion is a trader in the promotional service business . (Articles 95, 96 of the 2005 Vietnam Commercial Law)

In Article 100, the Commercial Law clearly states 10 prohibited acts in promotional activities, which are acts such as:

Promotions for goods and services that are prohibited from trading, restricted from trading, or not yet permitted for circulation or supply.

Using goods and services for promotion that are prohibited from trading, restricted from trading, or not yet permitted for circulation or supply.

Promotion or use of alcohol for promotion to people under 18 years old.

Promotion or use of tobacco or alcohol with an alcohol content of 30 degrees or more for promotion in any form.

Dishonest or misleading promotions of goods and services to deceive customers.

Promotion to sell poor quality goods, harmful to the environment, human health and other public interests.

Promotions at schools, hospitals, government offices, socio-political organizations, and people's armed forces.

Promise to give or reward but do not do it or do it incorrectly.

Promotions aimed at unfair competition, promotional activities in this group are clearly regulated in Article 46 of the Competition Law 2004 including

- Organizing fraudulent promotions about prizes.

- Dishonest or misleading promotions of goods and services to deceive customers.


- Discrimination against the same customers in different promotional locations within the same promotional program.

- Giving away goods to customers to try but asking customers to exchange the same type of goods produced by another business that the customer is using for their own goods.

- Other promotional activities prohibited by law.

Conducting promotions in which the value of goods and services used for promotion exceeds the maximum limit or the discount on goods and services being promoted exceeds the maximum limit as prescribed.

(Article 100 of the Commercial Law 2005)

In addition, the Commercial Law also regulates a number of other issues such as information that must be publicly declared (Article 97), notification methods (Article 98) or regulations on ensuring confidentiality of information about promotional programs, according to which the agency with a promotional program that needs to be approved by a state agency must keep the promotional content confidential (Article 99).

1.2. Decree No. 37/2006/ND-CP dated April 4, 2006 of the Government detailing the Law on Commerce on trade promotion activities

In this document, the Government specifies more clearly other factors in promotional activities to ensure that businesses not only choose legal forms of promotion but also deploy and implement them in accordance with the provisions of law. In Chapter II, Section 1, Article 4, the Decree specifies 7 principles for implementing promotions.

Promotional programs must be carried out legally, honestly, publicly, transparently and must not infringe upon the legitimate interests of consumers, traders, organizations or other individuals.

Do not discriminate between customers participating in the same promotion within the same promotion program.


The merchant implementing the promotion program must ensure favorable conditions for winning customers to receive the prize and is obliged to clearly and promptly resolve complaints related to the promotion program (if any).

The merchant conducting the promotion is responsible for ensuring the quality of the goods and services being promoted and the goods and services used for promotion.

Do not take advantage of customers' trust, lack of knowledge and experience to conduct promotions for the personal purposes of any trader, organization or individual.

The organization conducting the promotion must not create direct comparisons of its goods and services with those of other traders, organizations or individuals for the purpose of unfair competition.

Do not use human medicine (including medicine that has been circulated) for promotion.

(Article 4, Decree 37/2006)

Regarding the maximum value of goods and services used for promotion, Article 5 of this Decree stipulates that the material value used for promotion for a unit of goods and services being promoted must not exceed 50% of the price of a unit of such goods and services before the promotion period. Forms of giving away samples, giving away goods and services without collecting money, forms attached to contest entry forms or participating in prize games, and frequent customer programs are more clearly defined in Articles 7, 8, 11, 12, and 13 of Decree 37. In addition, the maximum discount for goods and services being promoted must not exceed 50% of the price of such goods and services immediately before the promotion period. (Article 6, Decree 37/2006)

In this Decree, the Government clearly stipulates the procedures for registering to conduct promotions for traders in Section 3, Chapter II. Accordingly, for the form of selling goods and providing services accompanied by participation in lucky programs, and


For other forms not included in the forms prescribed in Article 92 of the 2005 Law on Commerce, the Government shall prescribe separate procedures and formalities for enterprises in Articles 16 and 17. For the remaining forms, traders wishing to implement them only need to send a notice to the Department of Commerce where the promotion is organized at least 7 working days before implementing the promotion (Clause 1, Article 15 of Decree 37). The specific content of the notice is prescribed in Clause 2, Article 15 of the Decree.

Supplementing Decree 37 ND-CP of the Government, the Ministry of Trade also issued Joint Circular No. 07/2007-BTM-BTC dated July 6, 2007 guiding the implementation of a number of articles in Decree 37 ND-CP. The Circular further clarifies the responsibilities of state management agencies in the process of receiving and processing registration dossiers for promotional activities. In addition, there are a number of regulations on terminating and suspending the implementation of promotional programs, as well as handling of prizes without winners of lucky promotional programs.

2. Law on Telecommunications 2009 of the 12th National Assembly, 6th session, No. 41/2009/QH12 dated January 23, 2009

The new Telecommunications Law was issued in early 2009 to regulate business activities in the telecommunications sector, including mobile telecommunications. This Law also stipulates a number of factors that affect mobile telecommunications business activities in general and mobile information promotion activities in particular. Regarding the participating subjects, the Law clearly stipulates the rights and obligations of telecommunications service businesses in Article 14. Unhealthy practices in telecommunications service business are clearly stated in Article 19. In addition, from Article 53 to Article 56, the regulations, principles, bases for determining telecommunications rates, and the management responsibilities of relevant agencies also need to be noted to ensure that promotional activities, especially price promotions, are carried out legally and in accordance with State regulations. The Telecommunications Law was enacted not only to regulate telecommunications service business activities but also to stabilize and regulate the overheating development of telecommunications services.


Mobile in our country today, ensuring balanced and reasonable development for this young telecommunications sector in Vietnam.

3. Official dispatch No. 966/XTTM-QLXTTM dated September 7, 2009 of the Department of Trade Promotion

In 2008 and the first half of 2009, the Vietnamese mobile telecommunications market witnessed an overheated development, with the successive appearance of new mobile networks, the dizzying growth of subscribers and the seemingly never-ending promotion race to compete for customers of mobile networks. The peak was in mid-2009, when the promotional value of mobile network top-up cards reached 130-150%, causing the mobile service promotion market to truly fall into a state of loss of control, distortion and unsustainability. In that context, the Trade Promotion Department - Ministry of Industry and Trade issued Official Letter No. 966 warning about the situation of some promotional programs for prepaid mobile subscribers in the form of giving extra money into the accounts of subscribers when topping up with the value of the extra money for each top-up card exceeding 50% of the value of the top-up card. This is clearly contrary to the provisions of Clause 1, Article 5 of Decree No. 37/2006/ND-CP dated April 4, 2006 of the Government detailing the Law on Commerce on trade promotion activities, as mentioned above. Accordingly, the Official Dispatch requires enterprises to carefully review the promotional programs that are being implemented or planned to be implemented in the coming time, to ensure that they absolutely do not implement promotional programs in which the value used for promotion exceeds 50% of the price of the goods and services being promoted, especially for promotional forms for prepaid mobile subscribers.

The document also clearly states that if any violations of the law are detected in promotional programs, the Department of Trade Promotion will coordinate with competent authorities to conduct inspections and handle them in accordance with current laws.


4. Circular No. 22/2009/TT-BTTTT dated June 24, 2009 of the Ministry of Information and Communications regulating the management of prepaid subscribers .

The Circular is issued to manage prepaid subscribers, the most difficult to manage among mobile service users. Accordingly, the Circular specifies the principles of registration, storage and use of prepaid subscriber information, and prohibited acts when registering, storing and using this subscription. The procedures and order of information registration as well as the responsibilities of competent authorities and related units in registering and managing prepaid mobile subscribers are also fully listed. In general, the most important provision of the Circular is that subscribers are only allowed to use their ID cards or passports to register a maximum of 3 prepaid mobile subscriber numbers of each mobile information network (Clause 9, Article 7, Circular 22) . This regulation aims to limit the rapid increase in junk SIM cards and virtual subscribers due to widespread promotions by mobile information companies, causing waste of digital resources and especially making it difficult for "network operators" and authorities to manage all virtual subscribers.

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