Deputy Minister of Information and Communications Le Nam Thang has reportedly called for state-owned mobile network operator EVN Telecom to combine its operations with that of another operator.
Viet Nam News reported that EVN Telecom, a subsidiary of…
Deputy Minister of Information and Communications Le Nam Thang has reportedly called for state-owned mobile network operator EVN Telecom to combine its operations with that of another operator.
Viet Nam News reported that EVN Telecom, a subsidiary of government power utility Electricity of Vietnam (EVN), has suffered considerable losses and debt linked to connection fees and frequency charges.
Experts in the industry were quoted saying that Viettel, the second-largest telecom operator in the country owned by the Ministry of Defence, could be merged with EVN in order to turn the company around.
Both EVN and the Ministry of Information and Communications were not immediately available for comment before the press deadline. For its part, Viettel told TelecomFinance in an email: “Currently, we don’t have any official decision or information about this issue.”
In early April, media company Vietnam Television Corporation (VTC) was reported to be considering buying a 12% stake in state-run EVN Telecom for VND800bn (US$38m), following technology company FPT’s withdrawal from the process.
No deal has been announced so far. A sale to either FPT or VTC is part of a plan to privatise the company.
Similar privatisations of MobiFone and Viettel, the two largest telcos in the country, were also supposed to take place in the future.
With seven players – Viettel, VinaPhone, MobiFone, S-Fone, Vietnamobile, EVN Telecom and Beeline – the Vietnamese mobile market is highly fragmented and it has been hoped that privatisation plans would drive future mergers.
Indochina Telecom and Multimedia Communications Corporation also have licences but have yet to launch services.
In mid-July, Le Doan Hop, Vietnam’s Information and Communications minister, was already urging telecom companies in the country to merge in order to avoid infrastructure redundancy, according to the Viet Nam News.
But consolidation may soon be on its way. State-owned VNPT recently submitted a reorganisation plan to the government to merge its mobile phone units, VinaPhone and MobiFone.
In separate news, Vietnamese Prime Minister Nguyen Tan Dung has reportedly signed a decision, which will see the government own a majority stake in five telecom companies: Viettel, VNPT, Beeline, Indochina Telecom, and Vietnam Maritime Communications and Electronics Co (Vishipel), a telecom infrastructure company.
The decision will be effective as of 1 December 2011, wrote Vietbiz24.com.
