VietNamNet Bridge – EVN on the watch of President Dao Van Hung once rushed headlong into the investments in non-core business fields, including telecom and finance.
However, the investments have disillusioned EVN, because they have become burdens on the power group.
EVN’s officers suffered from telecom dream
EVN’s investments in non-core business fields have not brought the desired effects. EVN Telecom deal proves to be the most painful defeat.
EVN Telecom was granted the license to provide public telecommunication services in 2001, becoming the sixth mobile network in Vietnam, which developed the mobile phone subscribers with prefix “096” and the 450 MHZ frequency band.
EVN once believed that developing telecom network was a right strategic move, which would surely bring successes, because EVN has competitive advantages, especially in infrastructure development.
EVN had the technology of transmitting signals on power transmission lines. Besides the 40,000 kilometers of optic fiber throughout the 63 provinces and cities, EVN has another big advantage that it can take full advantage of the power networks, all the low, medium and high voltage ones, to provide mobile phone services.
EVN Telecom once introduced itself as the network with the highest transmission speed. In the report reviewing the operation in the five years from 2006 to 2010, EVN stated that the EVN Telecom’s service quality was getting better every day, while the number of clients had reached 4.6 million.
However, as for many people, the report did not show the real situation, because they knew that a lot of EVN Telecom’s subscribers were “virtual” subscribers. In fact, most of the subscribers who use the network with the prefix 096 are the officers of the EVN system. Meanwhile, with the low waveband, most of the subscribers complained about the low quality of services.
In order to develop EVN Telecom, the leaders of EVN group asked EVN’s officers to undertake the task of developing telecom subscribers. EVN’s officers were assigned the duties which had no relation to their career. For example, they were asked to deal with the bad debts from subscribers, and asked to develop mobile subscribers.
An EVN’s officer admitted that it was really difficult to develop subscribers. Therefore, they had to use the identity cards of other people and reported new subscribers. If they could not develop the number of subscribers as requested, they would see their salaries or bonuses to be cut.
A lot of officers complained that as they could not collect debts from clients, they had to pay with their money.
Experts commented that President Dao Van Hung made a blunder when he thought that he could use the labor force of EVN to develop telecom services. Such an unprofessional marketing and business strategy, plus the bad service quality both have led to the big loss of 1057 billion dong of EVN Telecom in 2010.
The securities scandal
Besides the telecom sector, EVN also jumped into the finance investment sector. EVN and its subsidiaries – Khanh Hoa Electricity, Power Company No 3 and Da Nang Electricity contributed 16.5 percent of capital into the Ha Thanh Securities Company HASC.
After four years of operation, HASC has become one of the worst securities companies which were on the verge of bankruptcy. Prior to that, in April 2011, President of HASC Truong Duy Son disappeared, leaving the deficit of 100 billion dong in the company’s account. This forced HASC to distrain personal assets of Son. In June 2011, the Hanoi police prosecuted Son for his committing frauds to appropriate assets of people.
EVN also injected its money in EVN Land, a real estate firm, and an insurance company.
Of the EVN’s non-core investment affairs, the investments in An Binh Bank (EVN holds 30 percent of chartered capital of the bank) and EVN Finance (40 percent) are the two that have brought profits. However, EVN will have to withdraw capital from the bank and the finance company soon as per request by the government.
Pham Huyen
EVN’s investments in non-core business fields have not brought the desired effects. EVN Telecom deal proves to be the most painful defeat.
EVN Telecom was granted the license to provide public telecommunication services in 2001, becoming the sixth mobile network in Vietnam, which developed the mobile phone subscribers with prefix “096” and the 450 MHZ frequency band.
EVN once believed that developing telecom network was a right strategic move, which would surely bring successes, because EVN has competitive advantages, especially in infrastructure development.
EVN had the technology of transmitting signals on power transmission lines. Besides the 40,000 kilometers of optic fiber throughout the 63 provinces and cities, EVN has another big advantage that it can take full advantage of the power networks, all the low, medium and high voltage ones, to provide mobile phone services.
EVN Telecom once introduced itself as the network with the highest transmission speed. In the report reviewing the operation in the five years from 2006 to 2010, EVN stated that the EVN Telecom’s service quality was getting better every day, while the number of clients had reached 4.6 million.
However, as for many people, the report did not show the real situation, because they knew that a lot of EVN Telecom’s subscribers were “virtual” subscribers. In fact, most of the subscribers who use the network with the prefix 096 are the officers of the EVN system. Meanwhile, with the low waveband, most of the subscribers complained about the low quality of services.
In order to develop EVN Telecom, the leaders of EVN group asked EVN’s officers to undertake the task of developing telecom subscribers. EVN’s officers were assigned the duties which had no relation to their career. For example, they were asked to deal with the bad debts from subscribers, and asked to develop mobile subscribers.
An EVN’s officer admitted that it was really difficult to develop subscribers. Therefore, they had to use the identity cards of other people and reported new subscribers. If they could not develop the number of subscribers as requested, they would see their salaries or bonuses to be cut.
A lot of officers complained that as they could not collect debts from clients, they had to pay with their money.
Experts commented that President Dao Van Hung made a blunder when he thought that he could use the labor force of EVN to develop telecom services. Such an unprofessional marketing and business strategy, plus the bad service quality both have led to the big loss of 1057 billion dong of EVN Telecom in 2010.
The securities scandal
Besides the telecom sector, EVN also jumped into the finance investment sector. EVN and its subsidiaries – Khanh Hoa Electricity, Power Company No 3 and Da Nang Electricity contributed 16.5 percent of capital into the Ha Thanh Securities Company HASC.
After four years of operation, HASC has become one of the worst securities companies which were on the verge of bankruptcy. Prior to that, in April 2011, President of HASC Truong Duy Son disappeared, leaving the deficit of 100 billion dong in the company’s account. This forced HASC to distrain personal assets of Son. In June 2011, the Hanoi police prosecuted Son for his committing frauds to appropriate assets of people.
EVN also injected its money in EVN Land, a real estate firm, and an insurance company.
Of the EVN’s non-core investment affairs, the investments in An Binh Bank (EVN holds 30 percent of chartered capital of the bank) and EVN Finance (40 percent) are the two that have brought profits. However, EVN will have to withdraw capital from the bank and the finance company soon as per request by the government.
Pham Huyen
Business & Investment Opportunities
YourVietnamExpert is a division of Saigon Business Corporation Pte Ltd, Incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Consulting, Investment and Management, focusing three main economic sectors: International PR; Healthcare & Wellness;and Tourism & Hospitality. We also propose Higher Education, as a bridge between educational structures and industries, by supporting international programs. Sign up with twitter to get news updates with @SaigonBusinessC. Thanks.
No comments:
Post a Comment