VietNamNet Bridge – Vietnam Post and Telecommunications Group (VNPT) has plans to look for approval from authorities to own 20% of mobile carrier MobiFone when the latter goes public.

MobiFone used to contribute a lion’s share of VNPT’s profits before it is spun off this month

Mai Van Binh, general director and chairman of MobiFone, said though MobiFone was spun off from VNPT early this month, the State-owned group was seeking to hold a maximum stake of 20% at MobiFone when this network is equitized.

Binh said MobiFone and VNPT that runs another major mobile network, VinaPhone, are partners and could cooperate on a win-win basis.

“VNPT has been a firm fulcrum for MobiFone in the past time and will still be in the future… MobiFone is no longer an affiliate of VNPT but it can grow along with VNPT,” Binh said.

As for competition between the two major carriers, VNPT’s deputy general director Phan Hoang Duc acknowledged this is inevitable but both are aware that they will have to compete with each other and with other providers in Vietnam and from foreign markets.

Competition is a driver for growth, Duc said.

Pham Long Tran, board chairman of VNPT, said the separation had eaten into the group’s profit but experts said VNPT had time to prepare for this by developing VinaPhone in the past years.

Tran said VinaPhone used to be the biggest mobile network in Vietnam in terms of subscribers and network coverage. It now ranks third on the mobile phone services market and looks to secure the second position in the next few years.

Lam Hoang Vinh, director of VinaPhone, said though the economic situation remained difficult in the first half of this year and the restructuring of VNPT affected its employees, VinaPhone posted the best business results in the past 18 years. However, Vinh did not elaborate on the business figures.

Tran said VinaPhone needs to carefully analyze the reasons behind the business results in order to work out appropriate ways to maintain growth in the coming years.

Minister of Information and Communications Nguyen Bac Son said VinaPhone should improve operations and customer services. VinaPhone will become a core business of VNPT, which is not only a good opportunity but also a challenge for this mobile carrier to meet expectations.

In addition to improving business activities of VinaPhone at home, VNPT will have to boost its investments in overseas markets and manage to increase revenues from production of phones and technology equipment as well as the number of broadband Internet subscribers.

The separation of MobiFone from July forced VNPT to revise down its revenue and profit targets to VND86 trillion and VND2.6 trillion respectively. Earlier this year, it expected revenues at VND120 trillion while MobiFone was still with the group.

The group earned revenues of nearly VND60 trillion in the January-June period, up 10% compared to the same period last year.

Binh of MobiFone said among the key tasks towards the year-end are to complete a plan to establish MobiFone Corporation for submission to the Ministry of Information and Communications this month. The company plans to send its equitization plan to the ministry this quarter.

MobiFone will grow into a corporation offering multiple services like voice, value-added and information technology services based on broadband Internet infrastructure.

Source: SGT