Foreign telecom giants gear up for MobiFone IPO

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Arne Kjetil Lian, SVP Group Strategy & Portfolio Development at Norway’s Telenor, told leaders at the Ministry of Information and Communication (MoIC) that his company wanted to take a controlling stake and join in the governance of Mobifone to introduce their own services in the Vietnamese market.

M.A. Zaman, president and CEO of Comvik International Vietnam AB, also expressed to the ministry his firm’s hope to invest in MobiFone. Zaman said Comvik had supported Mobifone between 1990 and 2005 and was better positioned than other candidates to engage in successful co-operation with the local telecom.

At the end of 2006, when the government first announced MobiFone’s IPO, a number of foreign operators flocked to Vietnam, hoping to become strategic partners of the firm. France’s Orange France Telecom, Singapore’s SingTel, Norway’s Telenor, Sweden’s Comvik, Germany’s T-Mobile, and the UK’s Vodafone all made attractive proposals about joining as strategic investors.

Due to some reasons, MobiFone didn’t go public in 2006, but some foreign investors’ enthusiasm did not subside, with Orange France Telecom hanging in for the long haul.

Le Nam Tra, MobiFone’s general director, said that when choosing a foreign partner MobiFone must consider financial capacity, technology, skill and governance experience. “Our co-operation with Comvik was a valuable experience,” he said.

Tra refused however to reveal which investors MobiFone is leaning towards “because negotiations are ongoing.”

MobiFone was separated from the Vietnam Post and Telecommunications Group (VNPT) and put under the control of the Ministry of Information and Communications on June 10. The government has required the company to submit its IPO plan by the end of the year.

Ho Chi Minh City Securities Corporation (HSC) recently valued MobiFone at $3.4 billion. The telecom reported profits of VND6 trillion ($284.3 million) and revenues of VND41 trillion ($1.95 billion) in 2013.

According to the annual Vietnam ICT White Book 2013, the total revenue of Vietnam’s mobile services market was $8.47 billion in 2012 and the three biggest mobile network operators held a combined 85 per cent market share. Viettel held 44.05 per cent, MobiFone 21.4 per cent, and Vinaphone 19.88 per cent.

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