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VNPT to equitize in 2016-2020

Released at: 08:37, 31/08/2016

VNPT to equitize in 2016-2020

Photo: Duc Anh

Chairman assures PM that restructuring is on track and equitization will follow.

by Ngoc Chi

Telecommunications giant VNPT targets to conduct its equitization in the 2016-2020 period, Chairman Tran Manh Hung told Prime Minister Nguyen Xuan Phuc at a recent meeting.

Though a detailed plan of VNPT's equitization has not yet been available for now, Mr. Hung emphasized that after two years of restructuring the group has seen positive results. After adopting a new management model its revenue, profit, State budget contributions and staff salaries all increased.

VNPT has already divested from 15 businesses for VND602 billion ($27 million), approximately 31 per cent of the total capital of more than VND2 trillion ($90 million) to be divested.

In the first six months of this year its total revenue reached VND61.3 trillion ($2.75 billion) and profits were VND2.2 trillion ($99 million), an increase of 23.5 per cent year-on-year.

Over the next five years it targets profits of over VND24.1 trillion ($1.08 billion), double the figure in the 2011-2015 period. Contributions to the State budget are expected to be VND21.1 trillion ($949.5 million).

VNPT will continue to confirm its leading position in Vietnam’s telecommunications and technology market, Mr. Hung said. “VNPT also targets implementing its equitization plan on schedule, from 2016 to 2020,” he said, adding that the group will use high technology to invest in priority sectors and cancel ineffective projects.

Deputy Minister of Information and Communications Phan Tam said that VNPT’s restructuring is like “major surgery”. Despite the separation of MobiFone in 2014, which took away 40 per cent of revenue and 60 per cent of profits, VNPT has retained its market share and customer benefits.

Mr. Tam, however, stressed that VNPT’s goals are still modest compared to the aim of becoming a powerful group. It must therefore set higher goals to better develop in the years to come, especially in the context of the wide implementation of 4G.

VNPT recently proposed the government allow it to secure a 20 per cent stake in MobiFone. It also asked for permission to make full use of the future amount from re-selling its stake in MobiFone once it has completed an IPO. “This would strengthen VNPT’s capital sources,” Mr. Hung told the Prime Minister in a previous meeting on August 4.

VNPT’s main business lines involve trading in telecommunications and information technology products and services and multimedia, and consulting, designing, installing, operating, and repairing IT facilities. It also researches, develops, manufactures, trades, exports, and imports telecommunications, information and multimedia products.

According to a report from the Ministry of Information and Communications (MIC), Vietnam's telecoms businesses earned total revenue of an estimated VND340 trillion ($15.3 billion) in 2015, with profit estimated at VND56 trillion ($2.52 billion).

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