VietNamNet Bridge - New investment plans have been prepared by foreign investors for Vietnamobile and Gmobile with hopes of remapping the telecom market, which has been dominated by big Vietnamese players.


Both Ha Noi Telecom and Hutchison Asia Telecommunications, the two partners that run Vietnamobile, have sent dossiers to the Hanoi People’s Committee to ask for permission to change Vietnamobile’s business mode. If this is approved, Vietnamobile would operate as a joint stock company instead of under the current business cooperation contract (BCC).

This is part of a plan on restructuring Vietnamobile network that Ha Noi Telecom and Hutchison have designed.

Hutchison Asia’s financial report released earlier last year showed that it would focus on improving the business by reducing investment cost and shifting to a joint stock bank if conditions are favorable.

Vietnamese state-owned telcos have advantages over foreign ones in infrastructure conditions, which help to provide better services and larger coverage in the country

It seems that it can see favorable conditions now.

The two partners have also asked for permission to invest $210 million in Vietnamobile’s infrastructure system, a move that aims to improve the competitiveness of the mobile network.

However, the amount of money is just equal to 1/10 of the capital that Global Telecom, the owner of Gmobile network, plans to additionally pour into the network in the time to come. 

A source from the Hanoi People’s Committee said Gmobile has proposed a plan to change the domestic company into a foreign invested enterprise with total investment capital of $2 billion. 

This means that Gmobile would sell stakes to foreign investors in the time to come.

It is still unclear about the details of Gmobile’s and Vietnamobile’s capital increase plans. However, analysts say the plans show the network operators’ ambitious plans to expand their market shares which have been modest in recent years.

The Vietnamese telecom market has been described as very ‘fertile’. However, foreign investors cannot earn big money from it, because the market has been dominated by three Vietnamese big players – Viettel, MobiFone and VinaPhone.

The three players now hold more than 90 percent of the telecom market with revenue reaching $15 billion in 2015. Viettel alone earned approximately $10 billion in revenue.

Most foreign firms have failed when investing in the Vietnamese telecom market. Hutchison Asia Telecommunications is the only foreign company which is still in Vietnam. However, its business result is unsatisfactory.

Gmobile was also initially developed by a foreign investor – VimpelCom. However, the Russian investors left Vietnam after a short time of investment because of big losses. 

An analyst noted that Vietnamese state-owned telcos have advantages over foreign ones in infrastructure conditions, which help to provide better services and larger coverage in the country.


DDDN