Vietnamese technology company FTP and with its subsidiary FPT Telecom are to acquire a majority stake in state-run mobile operator EVN Telecom, according to Viet Nam News.
Following the transaction, the two companies will own more than 50% of EVN…
Vietnamese technology company FTP and with its subsidiary FPT Telecom are to acquire a majority stake in state-run mobile operator EVN Telecom, according to Viet Nam News.
Following the transaction, the two companies will own more than 50% of EVN Telecom, the report explained. EVN is currently owned by the Electricity Telecommunication Company, a subsidiary of government power utility Electricity of Vietnam (EVN).
A few weeks ago, it was reported that EVN Telecom would be part-privatised before the end of the year. Two local companies and two foreign institutional investors from Singapore and Malaysia had already expressed interest in becoming EVN’s strategic partners, reports wrote at the time. Vo Quang Lam, deputy director of EVN, refused to unveil the value of the stake, but said that EVN Telecom had been valued at more than US$500m.
The telco reportedly had to wrap up the privatisation process quickly due to financial difficulties and greater competition from mobile operators. Earlier reports claimed that Singapore Telecom, Axiata or Maxis had thrown their hats into the ring.
If EVN completes the process before the end of the year, it may become the country’s first privatised telecoms company. Rivals Viettel and MobiFone were approved for privatisation as far back as 2005, but they have yet to complete the process.
Instead, the companies have become ‘one-member limited liability companies’ under the Business Law, which came into force on 1 July 2010. The law dictates that state enterprises that have not yet issued shares must transform into one-member limited liability companies until privatisation takes place.
With seven players, the Vietnamese mobile market is highly fragmented and needs consolidation. “But it is hard to see how this is going to happen, with two large operators – MobiFone and VinaPhone – owned by VNPT [a state-owned company], while market leader Viettel is owned by the military,” Nicole McCormick, a senior analyst at Ovum, told TelecomFinance. “These three operators don’t need to pick off the smaller operators for several reasons. And it’s highly unlikely private operators Beeline or Hutchison Vietnam will seek some sort of merge play any time soon. Moreover, all eyes for the moment are focused on the privatisation of EVN Telecom. Similar privatisations of MobiFone and Viettel are on the backburner,” she added.
EVN and FTP could not be reached for comment before going to press.
