MobiFone expansion plans heat up the market

General director Le Nam Tra said at a meeting in late July that mobile phones, internet TV, retail and multi-media would be the group's major business areas.

However, MobiFone is by no means a pioneer in this area: it is following the footsteps of many leading telecom groups, such as Viettel, VNPT and FPT, which made investments in the promising pay TV market landscape.

Industry insiders forecast that the penetration of MobiFone is expected to heat up competition in the retail and the pay TV markets in the coming months.

Currently, SCTV is the market leader holding 40 per cent of the cable television market, covering more than two million out of the total 4.4 million subscribers. Vietnam Cable Television (VTVcab) ranks second with 30 per cent and Ho Chi Minh City Television (HTVC) claims 15 per cent, meaning that the market is divided by only a few providers. The addition of a strong competitor might well cause significant turmoil.

Meanwhile, the retail market, which is worth $125 billion a year, has become a magnet to domestic and foreign retailers. Many groups are expanding their operations in Vietnam, while other leading global retail firms are also studying investment opportunities in the country.

Tra hoped that the two new business areas would help his group fulfil its targets of earning VND100 trillion ($4.58 billion) in revenue by 2020, while increasing its pre-tax profit by 3-5 per cent and its state budget contribution by 5 per cent a year on average in the 2015-2020 period. The company also expected to increase its productivity by an annual 6 per cent and conduct its equitisation under the guidance of the government.

MobiFone told VIR that it would also expand its operations abroad when favourable conditions arise. It would also invest to expand and improve its distribution channels to increase market share. The group has, however, kept their cards close to their chest and has not disclosed specific details about these plans yet.

In 2014, MobiFone fetched $1.87 billion in revenue and $328 million in profit. MobiFone, now a one member limited liability company with the state holding 100 per cent of its charter capital, is operating as a holding company. Its charter capital stands at over $703 million.