Vietnam Posts & Telecommunications (VNPT)

Vietnam Posts & Telecommunications (VNPT)

SWOT Analysis


  • Country's leading telecoms operator with presence in fixed-line, mobile and internet sectors.

  • Dominant player in the fixed-line sector and also serves 48% of mobile subscribers through subsidiaries MobiFone and VinaPhone at the end 2011.

  • A clear investment strategy to invest heavily in mobile and broadband services.


  • Service in rural areas is poor or non-existent.

  • Lack of competition in fixed-line sector has contributed to a limited array of services on offer.

  • New mobile price structure under pressure from competitors.


  • 3G, and eventually 4G, mobile services will provide substantial source of value-added mobile revenue.

  • Deployment of broadband and fixed-wireless networks in short and medium term.

  • Expansion of GPhone fixed-wireless service will help presence in rural areas.


  • Currently engaged in strong competition with major rival Viettel; this is understood to be putting downward pressure on ARPU levels.

  • Viettel has acquired EVN Telecom.

  • Low cost mobile services from competitors could result in migration away from fixed services.

  • Timescale for restructuring plan currently uncertain and could be delayed.

Company Overview

Wholly owned by the government, Vietnam Posts and Telecommunications (VNPT) is the country's main post and telecommunications service provider. VNPT operates the national backbone network that connects the provincial operating companies in 63 cities and provincial areas and - indirectly - controls the country's two leading mobile operators, VinaPhone and MobiFone operate GSM networks.


The immediate outlook for VNPT is unclear given that it is pressured by the government to undergo restructuring. Both VinaPhone and MobiFone are key revenue generators, and the group would be reluctant to divest either one of the mobile operations. If VNPT's plan to merge VinaPhone and MobiFone receives government approval, its long-term outlook would be significantly boosted given that the two mobile operators account for almost 50% of the market. However, if VNPT is forced to relinquish its control on either of the two operators, we expect the group to seek alternative revenue streams, domestically and internationally. We envisage 3G services to play a part in transitioning subscribers to more profitable data services, and continued network expansion should fuel consumer demand.

Corporate Structure

VNPT owns eight state-affiliated companies, eight joint ventures - with other state-owned enterprises as well as with private entities - and 13 other subsidiaries. In addition to VinaPhone and MobiFone, the state companies include Vietnam Telecom National (domestic services), Vietnam Telecom International (international long-distance services) and Vietnam Data Communication Company (data services).

In September 2004, a formal proposal was put forward by VNPT and the Ministry of Post & Telematics to separate the postal and telecommunications activities of the VNPT group. The plan decreed that the national network would be run directly by VNPT, instead of through subsidiaries such as Vietnam Telecom International and Vietnam Telecom National; these were subsequently absorbed into the parent company.

In April 2011, VNPT completed plans to divest its stakes in MobiFone and VinaPhone, which would be submitted to the Ministry of Information and Communications for approval, according to state media Nguoi Lao Dong. The sudden acceleration in VNPT's plans to divest its stake in the two mobile operators is due to the Vietnamese government's new regulation (Decree No. 25/2011/ND-CP that became effective on June 1 2011), which prevents an institution or individual holding more than a 20% stake in one telecoms operator from holding more than a 20% stake in another company operating in the same sector. In June 2011, the MIC announced that it has given the state-owned entity a two-year extension to divest its stakes in the two mobile operators due to the complex structure of VNPT.

In November 2011, the Vietnamese Prime Minister signed a decision that gave the state a dominant stake in five telecoms firms including VNPT. The decision took effect from December 1 2011.

In April 2012, local media reported that VNPT submitted its restructuring proposal to the Ministry of Information and Communications. VNPT has proposed that it will merge MobiFone and VinaPhone into a financially independent unit under the group while offering mobile services under the two brands. The plan will allow network sharing and lower investment costs. If approved, VNPT could start implementing the restructuring process in Q312. There was a lack of updates at the time of writing.

Financial Performance

In January 2012, local media citing data from the Ministry of Information and Communications (MIC) reported that VNPT's 2011 total revenue is estimated to be VND120.8trn, up by 18% y-o-y. This would mean that the group exceeded its initial target of VND120trn, but fell short of its revised target of VND130trn. The MIC also reported that the bulk of VNPT's revenue came from telecoms and IT services, which contributed VND103.864trn, making up 86% of the total. Net profit declined to VND10trn, down by VND1.2trn from the previous year. For 2012, VNPT has set a profit target of VND10.3trn.

Operational Developments


VNPT awarded Alcatel-Lucent a contract to supply end-to-end IP Multimedia Subsystem (IMS) solution in September 2010. According to the vendor, its IMS solution facilitates the migration of the existing PSTN services in VNPT/VTN to provide improved network performance, security and workforce productivity, as well as new revenue streams and future advanced mobile services.

VNPT selected ZTE's high-end cluster router ZXR10 T8000 in November 2010 to upgrade its internet egress gateway in order to meet the increasing demand for high-speed broadband mobile connections. VNPT was using ZTE's ZXR10 10G platform but the system is facing problems meeting VNPT's growing subscriber base.

In May 2010, Vietnam granted a second telecoms satellite contract to Lockheed Martin Corp, according to VNPT. The satellite would help VINASAT to be less reliant on foreign satellites and enable the operator to cater to the ever growing telecoms market. The total cost of the product was US$260-280mn.

In May 2012, the Vinasat-2 was launched from Kourou, French Guiana. Vinasat-2 is outfitted with Ku band transmission beams to blanket South East Asia and adjacent areas. The satellite weighs approximately 3 tonnes and has a lifespan of 15 years. The satellite will offer direct television broadcasting, telecoms and Internet services. Together with Vinasat-1, Vinasat-2 will help ensure the safe and stable provision of services, intensify the safety of the national telecoms network, and expand the provision of telecoms, audio-visual and internet services across the country. It aims to support national socio-economic development, natural disaster mitigation and national defence and security.

VNPT's Vietnam Telecom International (VTI) inaugurated a Cambodia-Vietnam high-speed transmission line, a 260km cable linking Phnom Penh and Ho Chi Minh city in April 2012. Via this transmission line, VTI and Telecom Cambodia can provide services such as international private leased circuit (IPLC), IPLC transit and virtual private network (IP/VPN) in Vietnam, Cambodia and other countries in the region.

Over the last five years ended 2011, VNPT has spent a total of US$5bn to expand its fibre optic cable throughout the country. Fibre-optic cable services are offered under the brand name of FiberVNN and from May 2011 offer a maximum speed of 100Mbps while the minimum speed had increased from 512Kbps to 2Mbps, depending on the package. The operator also has an ADSL service called MegaVNN, which saw speeds rise from 2.56Kbps to 10Mbps.

In September 2012, VNPT and China Mobile l aunched a cross-border optical cable network to connect Vietnam with China . The first stage of the project allows for a maximum data transfer rate of 10 Gbps with an upgraded second stage using multiplexing technology permitting a data transfer rate up to a maximum of 40 Gbps .

Financial Data

  • Annual Revenue (2009): VND83.253trn

  • Annual Revenue (2010): VND101.569trn

  • Annual Revenue (2011): VND120.8trn

Operational Data

  • No. of Fixed-Line Subscribers (2010): 10.485m n

  • No. of Fixed-Line Subscribers (2011): 10.538mn

  • No. of Internet Subscribers (2010): 19.285mn

  • No. of Internet Subscribers (2011): 19.312mn

  • No. of Mobile Subscribers (2009): 53.375mn

  • No. of Mobile Subscribers (2010): 64.510mn

  • No. of Mobile Subscribers (2011): 56.413mn

Company Details

  • Vietnam Posts and Telecommunications Corporation (VNPT)

  • 18 Nguyen Du Street



    Tel: +84 (49) 434 936

  • Fax: +84 (48) 255 851


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