Mobifone Sale Would Boost Market Development
Government-owned Vietnam Posts and Telecommunications (VNPT) will separate mobile unit Mobifone with a view to enticing outside investment. VNPT and military-backed Viettel own mobile operations that account for 92.7% of the mobile market's subscriptions. BMI believes the sell-off would boost competition and increase investment in the market.
The concentration of the mobile market in the hands of two government-owned players is a key factor in BMI's weak assessment of the country's industry risks scores as part of our Risk/Reward ratings. Although there are five operators in the market, competition is heavily skewed towards the government-owned operators. VNPT also controls third-ranked Vinaphone and would hold onto this operation under the new plans for the market.
Bringing in new investment to the market will be a turnaround for the market. There had been seven players in the market although the Ministry of Information and Communication continued to grant new licences. However, the lack of opportunities saw EVN Telecom absorbed by Viettel and Gmobile's Russian investor VimpelCom sell its entire stake to its local partner, a strategy also followed by South Korea's SK Telecom, which owned S-Fone, an operator with less than 1,000 subscribers, according to regulatory data.
|Reducing Government Involvement|
|Market Shares, Dec 2013|