EVN Telecom faces judgment day

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>> FPT set for buying into EVN

>> FPT pulls the plug on EVN Telecom deal

Prime Minister Nguyen Tan Dung recently called on the ministries of Industry and Trade and Finance to examine Electricity of Vietnam’s (EVN) investments in other sectors, including EVN Telecom.

Shortly after articulating the financial inspection requirement, the premier made public a list of five telecom networking infrastructure businesses in which the state holds a 50 per cent stake or chartered capital via Decision 55/2011/QD-TTg of October 14, 2011  which will take effect from December 1, 2011 and the list did not contain EVNTelecom.

This means the EVN will have to divest from EVNTelecom or sell its subsidiary to another entity.

At this point, EVNTelecom could be merged with military-run Viettel Group.

Another telco Hanoi Telecom, operator of Vietnamobile, just forwarded a document to the prime minister asking to purchase EVNTelecom’s 3G broadband licence.

In its proposal, Hanoi Telecom said it  would willingly pay up the sum EVNTelecom pumped into its 3G network equipment and network infrastructure and suggested handing over the latter’s strategic optic cable and other telecom infrastructure to other telecom operators to boost usage efficiency.

Hanoi Telecom’s general director Trinh Thi Minh Chau said the firm would pay EVNTelecom in cash and the latter would then have a round sum to pay its debts.  

Industry insiders, however, said merging with EVNTelecom was not simple as apart from taking over the faltering telco’s telecom resources Viettel, Hanoi Telecom or any other network operators would have to tackle EVNTelecom’s financial problems.

In fact, EVNTelecom’s telecom resources, including transmission infrastructure is relatively relevant to its parent company EVN. EVNTelecom is using the north-south axle system which runs parallel to EVN’s 500kV and 220kV power transmission lines, its OPGW cable system running parallel to EVN’s high voltage 500kV, 220kV and 110kV power networks and its ADSS hanging cables running parallel to EVN’s medium and low voltage power networks.

In the financial aspect, any entity taking over EVNTelecom would have to repay VND708 billion ($34.2 million) to local technology giant FPT which gave in deposit in its later dropped deal in seizing EVNTelecom’s 60 per cent stake. Besides, EVNTelecom has been reported to be incurring debts and losses related to connection fees and frequency charges.

According to an EVNTelecom financial record, in 2010 the firm reaped over VND2.260 trillion ($109 million) in revenue against a projected VND4.7 trillion ($227 million).