MobiFone’s date with destiny

MobiFone has lost ground to more aggressive telcos such as Viettel

Minister of Information and Communications (MIC) Le Doan Hop was quoted by local press as saying it would be essential for MobiFone to undergo privatisation this year to attract foreign investors and improve its competitiveness.

“The MIC, MobiFone and related agencies will have meetings from March on equitisation this year,” said Hop

However, there is no further information or plans from MobiFone nor its parent VNPT Group to undertake the duty.

“At all our meetings projecting for this year’s plan, there is no such equitisation plan being mentioned,” said a VNPT Group source.

Le Ngoc Minh, director of Vietnam Mobile Telecom Services (VMS) - MobiFone’s operator, said the company had an organisation structuring duty this year which was focusing on completing a corporate governance model to adapt with new requirement of new company’s form of one member limited liability company.

“VMS was shifted to one member company entity in 2010 and we will soon complete corporate governance and management to adapt with the new form this year, that is organisation duty along with business duties,” said Minh.

MobiFone set a modest target for this year with five million new mobile subscribers generating revenue of VND39 trillion ($1.95 billion) and pre-tax profit of VND6.1 trillion ($305 million).

Mobifone reportedly earned revenue valued at VND36 trillion ($1.8 billion), making up around 35 per cent of its parent VNPT Group’s total revenue last year.

MobiFone signed in 5.95 million new mobile subscribers. The operator reportedly earned pre-tax profits of VND5.8 trillion ($290 million), a year-on-year increase of 6 per cent against figures in 2009. The profit accounted for 52.3 per cent of its parent VNPT Group’s pre-tax profit in 2010.

Since 2005, equitisation figured highly on the government’s agenda. The four leading mobile operators plan to privatise over the next few years, with MobiFone, the likeliest to debut.

MobiFone’s equitisation was delayed after the company’s corporate value was defined at around $2 billion by Credit Suisse in 2009. In the former schedule, proposed date of equitisation for MobiFone is April last year with 30 per cent of stake selling to investors including 15 per cent for strategic partner. Around 10 international telecom groups from Europe, Asia and Russia interested in being strategic partners of MobiFone.