Telecom Asia — A number of international telecoms operators have reportedly expressed an interest in participating in the privatization of Vietnamese state-owned operator Mobifone. Companies including Norway’s Telenor, Sweden’s Comviq and Australia’s Telstra have shown interest in acquiring stakes in the company, news agencyVNS reported. Mobifone has an estimated brand value of $539 million. Plans for the privatization of the company have been in consideration since 2005 but the process has been repeatedly delayed.
This was announced in Circular No. 15 issued by the Ministry of Information and Communications on June 15. Earlier, in Circular No. 18 that was issued in 2012, the ministry listed three telecom companies dominating the Vietnamese market, namely Viettel, Viet Nam Posts and Telecommunications Group (VNPT)’s MobiFone, and VinaPhone. According to the country’s Competition Law, an enterprise is considered to have SMP if its market share is higher than 30 per cent, or has the ability to restrict competition in the relevant market. At the moment, Viettel enjoys more than 50 per cent market share.
Suvi Lenden, the ITU Special Envoy for the Broadband Commission for Digital Development, said at a workshop on the future of broadband technology in Vietnam in late May that the broadband service fee in the world was still too high. In theory, the spending on services should not be higher than 5 percent of users’ monthly income. In order to reduce the broadband services fees, she said governments need to apply comprehensive policies on frequency band management and measures to encourage competition among network operators.
Vietnam has five mobile network operators including Viettel, VinaPhone, MobiFone, Vietnamobile and GMobile. The three former ones hold over 90 percent of the market share. After MobiFone’s separation from VNPT, the race in the mobile market is no longer between Viettel and VNPT. It is among Viettel, MobiFone and VinaPhone–a subsidiary of VNPT.
The approval, granted on January 9, means the Mobifone network will now have an additional two million 10-digit numbers with the ‘0901′ and ‘0931′ prefixes serving the domestic market. While mobile phone number prefixes have been diversified in Viet Nam, mobile network operators see ‘090′, ‘091′ and ‘098′ as popular ranges that are also considered strong brands. Following the Ministry’s approval, the company can now expand its subscriber base.
It’s hoped the move will further develop the subscription network, Deputy Minister Le Nam Thang said on January 9. In 2014, the Vietnam Posts and Telecommunications Group (VNPT) submitted a request to the MIC to add the numerals 0 and 1 after the 090 and 093 prefixes for MobiFone and 091 and 094 for Vinaphone. The two mobile operators expect to have additional 8 million subscribers.
Specifically, VNPT earned revenue of about VND101,055 billion ($4.81 billion), profit of VND6,310 billion (over $300 million), up 12% compared with 2013. By the end of 2014, VNPT had total subscribers of 30.5 million, including 26 million mobile subscribers. The number of new mobile subscribers of VinaPhone in 2014 reached 8.8 million and the number of broadband internet and IPTV subscribers were over three million and about one million, respectively.
State-owned MobiFone has a charter capital of VND15 trillion ($715 million) and it operates in the form of a parent-subsidiary in five major business areas: telecom services, information technology, broadcasting, and multimedia communications. Following a decision signed by Minister of Information and Communications Nguyen Bac Son, the corporation will have 12 subsidies operating in all 63 provinces and cities across the country, network, research and design centers.
Nguyen Dang Nguyen, deputy general director of MobiFone, one of the three largest mobile networks in Vietnam, said the network had seen a 50 percent increase in 3G traffic since the end of 2013, and the number of 3G subscribers had increased rapidly. Ngo Manh Hung, deputy general director of Viettel Telecom, said the number of subscribers using data services had reached 9 million by the end of July.
Minister of Information and Communications Nguyen Bac Son has urged MobiFone to complete a new equitization scheme for the ministry to consider and submit it to the Government for approval late this year so that the firm can go public next year. The Government passed an equitization plan for MobiFone in 2006 and many foreign telecom firms have since come to open their representative offices and business arms in Vietnam in preparation for becoming strategic shareholders of MobiFone.
Arne Kjetil Lian, SVP Group Strategy & Portfolio Development at Norway’s Telenor, told leaders at the Ministry of Information and Communication (MoIC) that his company wanted to take a controlling stake and join in the governance of Mobifone to introduce their own services in the Vietnamese market. M.A. Zaman, president and CEO of Comvik International Vietnam AB, also expressed to the ministry his firm’s hope to invest in MobiFone. Zaman said Comvik had supported Mobifone between 1990 and 2005 and was better positioned than other candidates to engage in successful co-operation with the local telecom.