VietNamNet Bridge – The Vietnam Post and Telecommunication Group (VNPT) has decided to
merge VinaPhone and MobiFone – the two biggest mobile networks in Vietnam, putting
an end to the long debate about the fate of the two networks.
Local
newspapers on March 20 quoted the managers of VNPT, the management body of the
two networks, as saying that the two networks would be merged into each other.
This
seems to be the best solution for the restructuring of the mobile network in
Vietnam. Under the new law, VNPT, a legal entity, must not hold the controlling
stakes in more than one telecom companies at the same time. Therefore, VNPT
will have to either to withdraw capital from one of the two networks, or merge
the two networks.
Phan
Hoang Duc, Deputy General Director of VNPT, said on Thoi bao Kinh te Vietnam
that once the two networks merge, they would have the same infrastructure
system. This means that MobiFone and VinaPhone would use the same
infrastructure items, the mobile subscription prefix numbers. Meanwhile, the
current subscription numbers will be preserved intact.
Just
one day later, Deputy Minister of Information and Communication, Le Nam Thang
released a statement that the merger plan has not been approved yet. He said
that the ministry has been assigned by the government to draw up and submit the
plan on telco restructuring. However, the plan is still under compilation,
while the ministry has not come to any final decision, and it still has not
found out the solution to be submitted to the government.
Duc
from VNPT, when releasing the news, also said that the plan still needs the
approval from the government.
Prior
to that, at many internal meetings of the Ministry of Information and
Communication, senior officials expressed their disagreement to the merger
plan.
Pham
Hong Hai, Director of the Telecommunication Department, said that if the two
networks merge, there would be only two big mobile networks existing on the
market – the one of Viettel and the other of VNPT. In this case, Vietnam will
not have the matches with equal strength, which means that Vietnam would not
have a healthy competitive market.
Hai
many times affirmed that in order to create a healthy market, there should be
at least three enterprises with similar market shares to compete with each
other.
Meanwhile,
Minister of Information and Communication Nguyen Bac Son said that the value of
the two brands is very big. Especially, the brand MobiFone is estimated to be
valued at billions of dollars. If the two networks merge into each other, one
good brand would disappear.
Son
said he does not think the merger would be the best solution for both VinaPhone
and MobiFone. “We need to find out some way which allows both the networks to
continue developing,” he said.
Analysts
have said it is understandable why VNPT wants to merge the two networks. The
conglomerate’s profit in 2011 was 10 trillion dong, of which 80 percent came
from MobiFone and VinaPhone. Therefore, it’s clear that the decision on the
fates of the two networks would decide the business performance and the income of
thousands of VNPT’s officers, and that the merger would ensure the benefit of
VNPT.
Former
Minister of Information and Communication Le Doan Hop once said on Tien phong
that if equitizing MobiFone, VNPT would lose 40 percent of revenue and more
than 40 percent of profits.
If
MobiFone gets equitized, this means that MobiFone would not have to pay to the
parent group – VNPT – any more. If so, though the society will get benefits,
VNPT will lose money.
The big
profit of MobiFone can explain why VNPT violently protests the idea of having
MobiFone equitized.
C. V
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