VietNamNet Bridge – It is highly possible that Vietnam would retain only one state owned enterprise (SOE) in the telecom sector, while others would be equitized in order to ensure the healthy competition in the telecom market.

Monopoly returns?

Vietnamese market is believed to be one of the most competitive markets in the region with the service quality improved everyday and the charges decreased continuously.

However, there still exist problems which explain why Vimpelcom had to leave Vietnam after bargaining away its stakes in GTel network because it could not see any development opportunities in Vietnam. S-Fone, when explaining its bad business performance, said the market is too fierce, while private businesses are inferior to state owned ones.

Deputy Minister of Information and Communication Le Nam Thang has admitted that the Vietnamese telecom market is competitive with the presence of many enterprises, but the enterprises are either state owned or the ones in which the state holds the controlling stakes.

The existing problems in the state management have hindered the development of the market, which has forced EVN Telecom or Vimpelcom leave the market.

Over the last 10 years, the telecom market still cannot mobilize the resources from the society. The only way to mobilize the resources in the society is equitizing state owned enterprises. After the process, the state would only retain the enterprises important to the national defense or the enterprises that serve public interests. Meanwhile, Vietnam would welcome the investments from different sources for the telecom industry.

Agreeing with Thang, Mai Liem Truc, former Deputy Minister of Information and Communication said it is really a problem that 95 percent of the telecom market now is being controlled by the state.

Meanwhile, FPT General Director Truong Gia Binh has expressed his worry about the returning of the monopoly in the telecom sector.

He complained that in the context of economic downturn, some enterprises have raised the channel leasing fees by two or three times.

Binh said he applauds the idea that there must be at least three service providers in every important telecom sector in order to ensure the healthy competition of the market.

What will be the telecom like?

The Ministry of Information and Communication has suggested a lot of solutions to ensure the stabilization of the market and prevent from getting collapsed.

If enterprises operate ineffectively, the ministry would revoke the operation license of the enterprises. Indochina Telecom, for example, has had licensed revoked, but it still has been existing and operating in another business field.

Enterprises would also be restructured through merger and acquisition. EVN Telecom, for example, has been merged into Viettel, which is considered a perfect solution to eliminate the weak enterprises from the market, while avoiding upheavals to the market.

Equitization has also been cited as a “safe solution” for the restructuring, which would create a healthy market with three enterprises at least in every telecom sector.

Truc said he personally thinks that Vietnam should retain one of the two existing big SOEs, either VNPT or Viettel (Viettel is a possibility) and equitize the others.

“Only by doing this, will the telecom market be really competitive,” Truc said.

Regarding the unprofitable enterprises, the State would make intervention, if the enterprises are the big ones. Meanwhile, it would not make intervention, if the enterprises are small, because businesses have to settle their problems themselves.

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