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VNPT may be pushed into Mobifone IPO
The VNPT Group, which is the sole owner of both Mobifone and Vinaphone, is criticising a new decree that would ostensibly ban it from continuing to own two major mobile service providers.
Government Decree No.25/2011ND-CP, issued to guide implementation of the Law on Telecommunications, takes effect on June 1, and stipulates that an institution or individual which holds over 20 per cent of the charter capital or shares in one telecommunications company will not be allowed to hold over 20 per cent in another company operating in the same market.
Under the decree, therefore, VNPT would be required to either divest itself of holdings in either Mobifone or Vinaphone, or merge the two companies.
Another option would be for one or both of the companies to be equitised, allowing shares to be sold to other investors, said Pham Hong Hai, director of the Telecommunications Department of the Ministry of Information and Communications.
Bui Quoc Viet, Director of VNPT's public relations centre, yesterday told Viet Nam News that VNPT intended to obey the regulations, although equitisation remained problematic.
Mobifone has been discussing equitisation for the past four years but has yet to make an initial public offering (IPO), according to Viet.
Viet also argued that Vinaphone remained directly controlled by VNPT under a charter of organisation approved by the Prime Minister in January of this year. Vinaphone does not have charter capital and should therefore not be subject to the new regulation, he said.
The Government approved plans back in 2005 for the equitisation of both Vinaphone and MobiFone. Under the initial roadmap, Mobifone was to have made its IPO in 2006 and to have listed shares on the stock exchange by 2008.
However, a prolonged stock market slump following the 2008 financial crisis seemed to bring everything to a standstill. Credit Suisse estimated the value of Mobifone's potential IPO in 2009 at US$2 billion, but no action has taken place since.
Mobifone Chairman Le Ngoc Minh, who is also a deputy director of VNPT, told reporters on the sidelines of 2010 Viet Nam Mobile Awards that MobiFone was ready for equitisation but was still waiting for guidance from the Government and concerned ministries.
Minh said MobiFone had completed all equitisation plans by late 2009 and would proceed immediately upon receiving guidelines from the Goverment. The plan had been in place for a long time, Minh said, but was just waiting for a decision from a higher level.
Minister of Information and Communications Le Doan Hop said that giving Mobifone the go-ahead to equitise this year would enhance its competitiveness and help attract foreign investors eager to invest in the telecommunications and IT sectors in Viet Nam.
In its recently-published White Book 2011, the European Chamber of Commerce (EuroCham) proposed the Government continue to accelerate the process of equitisation of telecommunications enterprises by announcing a definite roadmap.
The three leading mobile service providers – Mobifone and Vinaphone, along with military-run market leader Viettel – account for nearly 90 per cent of the domestic market, but none have released a specific time frame for their IPOs, the White Book said.
The participation of foreign investors with high skills and advanced technology would help enhance the competitiveness of domestic telecommunications enterprises, said the Central Institute for Economic Management deputy director Vo Tri Thanh.
VNPT earned VND101.5 trillion ($4.8 billion) in 2010, with revenues from Mobifone and Vinaphone accounting for 63 per cent of that figure. VNPT's profit reached VND11.2 trillion ($534 million), of which the profits of Mobifone alone accounted for 52 per cent.
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