VietNamNet Bridge – The merger of VinaPhone and MobiFone, if it occurs, is believed to create a new power which could be a threat to any rivals, especially Viettel, a member of the trio VinaPhone – MobiFone – Viettel.

VinaPhone and MobiFone merger not the best solution

Though the Ministry of Information and Communication has denied the information about the merger of the two biggest mobile networks VinaPhone and MobiFone, the plan is considered by experts as the only solution which would take place, sooner or later.

Viettel seems to be the telco which is most interested in the fates of VinaPhone and MobiFone. If the two powerful networks merge into each other, this would create a new legal entity which is even more powerful than they are now.

However, Giao duc Vietnam quoted an executive of Viettel as saying “that there is no need to worry too much about the merger.”

Statistics show that 90 percent of the telecom market is being controlled by the trio of MobiFone, VinaPhone and Viettel. The merger of VinaPhone and MobiFone would create a network with larger market share and bigger network than Viettel. By that time, the competition on the market would be the one between the two main rivals – Viettel and Vina&Mobi.

However, the executive said that the telecom market in Vietnam has become saturated with the development of new subscribers slowing down. All the three big mobile networks now do not focus on developing new subscribers, while their priority task is to retain the existing clients.

He went on to say that in fact, the merger of VinaPhone and MobiFone was anticipated by Viettel when the military telecom group considered the possible solutions for the two networks. Therefore, Viettel has been well preparing for the scenario.

“You should look into the real profit instead of the turnover when assessing the business performance of an enterprise. Meanwhile, Viettel has got ahead of VinaPhone and MobiFone with its strategy to make outward investment.

Vu Dinh Anh, an economist, said that he does not oppose the merger of VinaPhone and MobiFone. In fact, though there are three big mobile networks, the telecom market is being controlled by two biggest rivals – the Vietnam Post and Telecommunication Group (VNPT) which now owns VinaPhone and MobiFone, and the military telecom Viettel. If VinaPhone and MobiFone merge into each other, this would be just a move to legalize the thing which has existed for a long time on the market.

Amid the worry that if the two networks merge into each other, Vietnam would not have a healthy competitive market, Anh said that he does not think that the competition will occur when there are many players.

“I heard that a “tripodal position” has been existing on the market, and the merger would break the position. However, in fact, the tripodal position has never existed. There have been only two main rivals – VNPT and Viettel,” Anh said.

The above said executive of Veittel also said that it would not be a surprise if the State agrees to the merger of the two networks. “This would be a move of restructuring state owned enterprises in accordance with the government’s Decree 25,” he said. “In fact, VNPT would still have the same turnover, same networks and same number of clients.”

Meanwhile, Dr Nguyen Minh Phong has his own reason to advocate the decision to merge the two networks. He said that the merger would create a big power which helps improve the competitiveness of Vietnam in the rivalry with foreign telecom powers.

Besides, Phong said that the merger would also bring economical benefits. Since the two networks can use the same infrastructure items, they would be able to save money for necessary investments.

Source: Giao duc VN