VNPT’s digital renaissance: Vietnam’s telecom titan reinvents for modern age

VNPT has moved through the years from traditional telecoms to a premier digital service provider

From the bustling streets of Hanoi to the digital arteries of Vietnam’s economic framework, the group (VNPT) has redefined its role. No longer just a traditional telecommunication powerhouse, it is now Vietnam’s premier digital service provider, echoing a global shift in focus from cables and calls to bits and bytes.

This is illustrated in recent performance results, with consolidated revenues for the first half of this year estimated at $1.11 billion, with an anticipated pre-tax consolidated profit of $92.7 million.

In an assessment by the Vietnamese government, VNPT’s restructuring and overhaul has “essentially achieved its set objectives and expectations”. Its strategy for 2021-2025 has been to transform and develop the firm into a dynamic, effective, modern state economic group that can compete both domestically and internationally.

Last year witnessed the group’s total revenue touch $2.33 billion, a 2 per cent increase on-year, achieving 97.5 per cent of their annual target. Profits came in at $279.7 million, or 104.6 per cent of their goal.

The previous year saw VNPT achieve total revenues of $2.39 billion, equating to over 103 per cent of its target. Of this, the parent company’s revenue stood at $1.93 billion, attaining 101 per cent of the goal, even after accounting for the financial setbacks induced by the pandemic.

Also in 2021, profit reached $299.7 million, while the state budget contribution hit $228.27 million, both surpassing annual targets.

From 2016 to 2020, the group reported revenues of approximately $11.58 billion, with profits nearing $1.27 billion - a solid 118 per cent of its forecasted targets. Furthermore, its average return on equity for the period was an impressive 9.4 per cent, hitting 119.1 per cent of its set objective.

Throughout the restructuring process, VNPT has consistently maintained an impressive average profit growth rate of over 20 per cent annually. This has not only fortified both the VNPT and Vinaphone brands but also ensured a consistent average wage increase of about 15 per cent annually for its workforce.

Between 2018 and 2020, VNPT executed capital divestments from nine enterprises, raking in $36.2 million and yielding a profit of $12.77 million. “Our IT revenue continually grew at a high pace, ranging from 20 to 30 per cent,” stated a senior executive.

This phase also saw the company restructure its international business operations via the restructuring of its International Telecommunication Company.

It has been almost 10 years since a sweeping transformation began to encompass everything from strategic realignments and human capital recalibrations to business mechanics. The direction heralded a comprehensive overhaul spanning areas from strategic approach, organisational structure, human resources, and business operations to customer services and internal management mechanisms.

In 2017, the company forged the VNPT4.0 strategy and proposed further restructuring for towards 2020 to align with it. At the heart of this transformation was a tri-pillar organisational approach - business, infrastructure, and services.

A 2018 pivot encapsulated the group’s vision. With the introduction of the VNPT IT Company, the telecom giant was no longer just about calls and connectivity. It was about crafting a digital future for Vietnam, the senior executive explained.

“As global enterprises rush to embrace digital transformation, VNPT stands as a testament to Vietnam’s own ambitions,” he said. “A preferred partner for the Vietnamese government’s national digital initiatives, VNPT’s journey has not just been about technological overhaul. It is about aligning with global standards, about a proactive investment in tomorrow’s technologies, and, crucially, about ensuring the business remains future-ready.”

Through research and development (R&D) and infrastructure upgrades, VNPT has enhanced operations, protected revenues, and significantly supported both state finances and welfare programmes in recent years.

By proactively investing in novel technologies, R&D, and effectively constructing network infrastructure, VNPT has bolstered its operational efficacy, stemmed potential revenue declines, ensured employee welfare, made significant contributions to state coffers, and supported the government’s social welfare programmes.

“Our aim is to become a technology group operating and managing in a digital environment, focusing on digital infrastructure, technology, and services, while owning and operating the core infrastructure of the national digital landscape,” the executive added.

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