MobiFone is being splited out of VNPT to equitize, an opportunity for foreign investors ?

Author: Hoa Nguyen, MBA.,MA.

After the approval of the Prime Minister on the project named ""Restructuring of State Owned Enterprises, focusing on the State Owned Economic Groups in the period of 2011-2015" in the Decision No 929/QĐ-TTg,17/7/2012, the discussion on restructuring Vietnam Post and Telecommunication Group (VNPT),  has raised. A Proposal with detailed options from this Group has been proposed to the Government and has gotten high attention of the whole society because of the important role of this Group in Vietnamese economy.

In the meantime for the final decision on restructuring's options, VNPT got lower gross profit than Viettel's in 2013 with only 9.265 Billion VND, compared with 35.086 Billion VND of Viettel although Viettel accessed this market later than VNPT. The revenue race between VNPT and Viettel is  a fierce day by day.

Recently, it is said that Mobifone, which is contributing of 60 - 70% of VNPT's Gross Profit, is splitting out of VNPT and becoming an independent corporation. Mobifone is being equitized  soon and being expanded its business scale after its equitization, as well.

The decision of splitting Mobifone out of VNPT implies a strong determination of Vietnamese Government in restructuring State Owned Enterprises towards an effective operation and the long term development in the market economy.

Mr. Le Ngoc Minh, Chairman of Mobifone, Deputy General Manager of VNPT, stated that MobineFone would have a great opportunity to develop if it was splited out of VNPT. MobiFone would face no problems in organization, finance and management, as well. Moreover, with more than 6000 Billion VND profit, MobiFone has a large amount of capital depreciation because its divestment is only 1.600 Billion VND. MobiFone shall diversify its business instead of focusing on mobile communication as it has operated.

Is there an increscent chance for foreign investors when MobiFone is equitized since it is one of three famous brand names in Mobile Communication Industry in Vietnam ? You know the answer, as well!!!