VNPT won’t be allowed to possess two mobile networks

Published: 13/04/2011 05:00



The Vietnam Post and Telecommunication Group (VNPT), the owner of the two most powerful mobile networks, VinaPhone and MobiFone, will have to equitize one of the two networks, or merge the two networks into one, due to the new regulations.

The Decree No 25 that guides the implementation of the telecommunication law stipulates that an institution or individual, who owns more than 20 percent of the chartered capital or stakes of a company, will not be allowed to own more than 20 percent of the chartered capital or stakes of another telecom company which operates in the same telecom market.

With the new law, VNPT will have to restructure its ownership ratios at VinaPhone and MobiFone.

Currently, VNPT holds 100 percent of capital of the both networks. Meanwhile, under the new law, it must not own more than 20 percent of the chartered capital of one of the two networks. As such, there are two choices for VNPT, either VNPT equitizes one of the two mobile networks and after the equitization only hold a maximum of 20 percent of stakes of the equitized network; or VNPT will have to merge VinaPhone and MobiFone to form up a single network.

What to do with VinaPhone and MobiFone is a difficult question for VNPT’s leaders now. In fact, VNPT has been preparing to equitize MobiFone for a long time. However, even if MobiFone is equitized, the VNPT’s ownership ratio at MobiFone will not be higher than 20 percent of the chartered capital. If so, this will seriously affect the “health” of VNPT.

The number of employees working for MobiFone now just accounts for four percent of the total number of employees of VNPT, but the mobile network brings 50 percent of the total profit of the group.

Therefore, analysts believe that equitizing MobiFone and holding 20 percent of stakes of network would not be the choice of VNPT, because MobiFone remains the “bread winner” for the group.

Analysts think that VNPT would choose to merge its two mobile networks, which is really not a difficult work. However, the problem is that both MobiFone and VinaPhone are the strong brands on the telecom market, and VNPT does not want to lose any of the two brands. It is clear that the telecommunication law has put VNPT into a dilemma.

Before the new decree guiding the implementation of the telecommunication law was issued, leaders of the Ministry of Information and Communication had a working session with the General Director and Chair of the Member Board of VNPT on the issue. The ministry explained that the provision of the law aims to prevent enterprises from colluding with each other to block other rivals and attempt to dominate the market, which will cause unhealthy competition. The ministry has asked VNPT to restructure the two mobile networks to obey the telecommunication law.

MobiFone obtained an impressive growth rate of 30 percent in 2010 with the number of subscribers reached 5.95 million by the end of 2010. The total turnover of the mobile network operator was 36,034 billion dong, an increase of 31.5 percent over 2009.

2010 was a very successful year for MobiFone, when it was recognized as the most favorite mobile network at Vietnam ICT Awards.

Meanwhile, VinaPhone obtained a turnover of 28.172 trillion dong in 2010, fulfilling 106 percent of the yearly business plan.

The Decree 25 stipulates that the enterprises, which want to set up ground mobile networks using radio frequency channel, must have a legal capital of 20 billion dong and must commit to invest at least 60 billion dong in the first three years of operation to develop telecom networks. The mobile virtual network operators must have a legal capital of 300 billion dong.

Buu Dien

Provide by Vietnam Travel

VNPT won’t be allowed to possess two mobile networks - Sci-Tech - News |  vietnam travel company

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