MobiFone's bright performance before equitisation

MobiFone has been earmarked for equitisation in 2020

Prime Minister Nguyen Xuan Phuc on August 15 officially approved the decision on equitising 93 state-owned companies until 2020. The name drawing the most attention is MobiFone, which is put on the table after dozens of failed equitisation attempts.

As of the end of June 30, 2019, MobiFone’s total assets reached VND29.181 trillion ($1.27 billion), down 4 per cent against earlier this year. The value of state-owned capital was VND15 trillion ($652.17 million), investment fundsfor development also contributed VND5.08 trillion ($220.87 million), and undistributed profit was VND150 billion ($6.52 million).

In addition, its revenue hit VND15.168 trillion ($659.48 million), down 12 per cent on-year. Pre-tax profit also reached VND2.644 trillion ($114.96 million), up 8.6 per cent on-year, and after-tax profit was VND2.115 trillion ($91.96 million), up 8.4 per cent on-year.

At the time, MobiFone had VND11.678 trillion ($507.74 million) and VND1.745 trillion ($75.87 million) in bank deposits and cash. Bank deposits include VND8.445 trillion ($367.17 million) in capital and VND329 billion ($14.3 million) in interest. MobiFone gained VND418 billion ($18.17 million) from bank interest during the first half, five times as much as last year.

2018 was a tough year for MobiFone because many former leaders and key executives were prosecuted for purchasing 95 per cent of Audio Visual Global JSC’s (AVG) shares. Accordingly, MobiFone forked out VND16.565 trillion ($720.22 million), while AVG’s real valuation was VND1.983 trillion ($86.22 million).

The upheaval in personnel made MobiFone only able to achieve 50-70 per cent of its targets on signing contracts and revenue in 2018. Despite, the telco also got VND38.883 trillion ($1.69 billion) in integrated revenue, down 12 per cent on-year, and VND5.919 trillion ($257.35 million) in pre-tax profit, up 27.5 per cent on-year.

The large local interest in services like Zalo, Viber, and Skype have been impacting MobiFone’s telecommunications business. Therefore, the company has shifted to invest more in 3G, 4G, and even 5G several years ago. The growth of data in Vietnam remains at 22.5 per cent annually – a great opportunity for telcos.

Its plan in 2019 is to ensure full 4G coverage across the country and begin testing 5G. In addition, the company will also boost investment in technology projects to serve its data business like Internet of Things (IoT), M2M, Big Data, cybersecurity, and others.

The Ministry of Information and Communication also granted a license for MobiFone to test 5G in Hanoi, Danang, Haiphong, and Ho Chi Minh City between April 23, 2019 and April 22, 2020).