Telecommunication investment in Vietnam – VNPT’S restructuring plan

Share the info

Telecommunication investment in Vietnam has been a heated subject recently as when the Prime Minister visited US.  ANT Consulting’s business consultants in Vietnam have been following the news and changes in the telecom area as such we could provide our clients the up to date movement for their investment decision.

Telecommunication in Vietnam is an attractive field however it is not easy to turn investment opportunity into profit.  Previously, there has been some small telecommunication networks established on the cooperation basis of foreign enterprises such as S-Fone – between SPT and SK Telecom, Beeline – between Gtel and Vimpelcom, Vietnamoblie – between Hanoi Telecom and Hutchison Telecom. Until now, only Hutchison Telecom remains in Vietnam while SK Telecom and Vimpelcom have withdrawn.  Vinpelcom lost more than $400 million in the investment.

Engaging in invest indirectly from purchasing shares of high-profit enterprises such as VNPT or Viettel is not easy. Viettel has stated that they would not equitized, while VNPT’s equitization plan has been delayed for years

The story has been heated recently by talk on re-starting the restructure process of VNPT in which the issue taking most attention is that one telecommunication’s separation from VNPT.

According to Minister of Ministry of Information and Telecommunication, Mr. Nguyen Bac Son, the restructure process of VNPT would be carried out officially in September, 2013.  He also referred to a “separated telecommunication network”. Many specialists stated that it could be Mobifone.  In a recent interview of Bloomberg, Prime Minister, Mr.Nguyen Tan Dung implied to the equitization of telecommunication enterprises once.  He said that the Government was considering increasing foreigner-owned capital at banks and telecommunication enterprises as well.

It can be said that Mobifone is the most valuable asset of VNPT.  Last year, the VNPT’s total profit of VND 8.500 billion, out of which Mobifone contributed VND 6.600 billion, nearly 80%. Despite the high tax rate, the cost for advertisement and marketing could be beyond the tax deduction ceiling, it is assumed that net profit of Mobiphone is about VND 5.000 billion.  As such, it is expected that the Mobifone’s value may be exceed VND 100.000 billion.

Also note that the figure of VND 100.000 billion or $ 5 billion above is not high, compared with those businesses in area. Advanced Info Service – the largest telecommunication enterprise in Thailand – is currently worthy of $ 24 billion or PLDT – the largest one in Philippines – values approximately $27 billion.

If you need further information on the telecommunication in Vietnam, we could assist with research and investigation.  ANT Consulting, your business consultants in Vietnam.

Contact us to schedule your complimentary consultation.

We are available at offices in central of Hanoi, Ho Chi Minh City and Da Nang that help cover through out Vietnam.