Telecom giants to equitise next year

Vietnam to equitise 3 telecom giants

The three biggest Vietnamese telecommunication companies including VinaPhone, MobileFone and Viettel plan to equitise in early 2007, says Tran Duc Lai, Vice Minister of Posts and Telematics.

The Viet Nam Mobile Telecom Services Company (VMS), the owner of MobiFone, would be the first equitiser with the company's equitisation project being completed by the end of this year. This will mark some significant changes, said an official from the Ministry of Post and Telematics.

The official showed that the time of buying shares would be market-based and decided by the shareholders, which meant the strategic investors would obviously no longer be able to obtain the shares as before. The shares can now only be bought when they are listed in the stock market, not at the first time of share issuing.

Currently, there is not any limit to the number of shares owned by strategic foreign investors in telecommunication companies. However, VMS would set this limit in its equitisation project, in which the State would keep a hold of the controlling stakes.

There are many foreign companies planning to buy shares of the domestic telecommunication companies. For example, five companies belonging to foreign telecommunication companies including Comvick (Sweden), Telenor (Norway), France Telecom (France) and two British companies have showed intention to buy MobiFone shares.

General Director of France Telecom Viet Nam, Jean Pier Achouche, said he was certain that his company would make a financial contribution to MobiFone as soon as the relevant conditions made public.

France Telecom, a telecommunication group specialising in GMS technology, was quite interested in all three Vietnamese GMS telecommunication service suppliers: VinaPhone, MobiFone and Viettel, the director added.

The integration of the equitised companies would lower the State's investment burden, sharing the costs amongst the investors, Lai remarked. Then new technologies would be quickly applied, a competitive environment would be developed, and the service quality would be enhanced and be more beneficial to the customers.

He also noted that the equitisation would transform the telecommunication industry into a business with a much higher revenue, thus playing a crucial role in the entire economy.

To date there have been 26 telecommunication units that have completed their equitisation process out of 41 units that are eligible. These enterprises have reached high revenue upon equitisation, with an average of 28 percent. Some of those that have been listed have already attracted a lot of investors.