VNPT may be forced to offload stake in MobiFone or Vinaphone

13 Apr 2011

Vietnam Posts and Telecommunications Group (VNPT) could be forced to sell its shares in one of its two wholly owned mobile network operators under new government guidelines due to be implemented later this year, Viet Nam Business News reports. Decree No. 25/2011/ND-CP, which will become effective on 1 June 2011, states that an institution or individual that owns more than 20% of the charter capital or stake in one telecoms operator, may not hold more than 20% of another firm operating in the same market. Currently, VNPT owns 100% equity of MobiFone and Vinaphone, the country’s second and third largest wireless operators by subscribers, respectively. The state-owned company will therefore be forced to sell the majority of its shares in one cellco, or could opt to merge the two network operators into one company.

Meanwhile, the new decree also requires companies seeking to apply for a licence to set up a mobile network using wireless frequencies to have authorised capital of VND500 billion (USD23.8 million) and commit investment of VND2.5 trillion in the first three years and at least VND7.5 trillion within 15 years. Companies wishing to provide mobile virtual network operator (MVNO) services must have an authorised capital of at least VND300 billion. Operators hoping to set up a fixed telecom network in one province or city must have an authorised capital of VND5 billion and a minimum investment commitment of VND15 billion in the first three years, while those applying to roll out fixed line infrastructure in between two and 30 provinces or cities must have capital of at least VND30 billion and pledge investment of over VND100 billion in the first three years. In more than 30 provinces or cities, the minimum capital and investment required to deploy fixed telephony services are VND100 billion and VND300 billion, respectively. In a further development, Clause 4 of the decree permits direct and indirect foreign investment in the telecoms sector, subject to certain conditions.

Vietnam, MobiFone Telecommunications Corporation, Vinaphone, VNPT-Vinaphone