Vietnam Government Approves Plans to Privatise State-Owned Mobile Network
Published on: 3rd Apr 2014
By: Ian Mansfield
Vietnam's Vietnam Post and Telecommunication Group (VNPT) has secured approval for plans to split off one of the two mobile networks that it owns.
The Prime Minister has approved plans that will see VNPT split off MobiFone to the ICT Ministry ahead of a stock market listing, while it retains ownership of Vinaphone.
VNPT's ownership of two competing mobile networks has been a problem for several years follwoing the passing of a law blocking any company owning more than 20% of a telecoms company also owning more than 20% stake in any other phone company.
There had been talks of merging the two networks, or selling one of them, but the company has finally secured approval to split off one mobile network, while keeping the other.
The two networks collectively control around half the subscriber base, but rampant competition between the country's six mobile networks is hurting margins and led the government to impose restrictions on marketing campaigns and churn rates.
Although the intent is now to privatise MobiFone, it's still not clear how long that process will take.
Advocating the restructuring proposal, former Deputy Minister of Posts and Communications, now the Ministry of Information and Communication, Mai Liem Truc said that the separation of MobiFone from VNPT would be good for the telecom market and facilitate healthy competition, as currently, the three biggest mobile service providers, including Viettel, MobiFone and VinaPhone were all state-owned.