MobiFone, Vinaphone to merge

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MobiFone, Vinaphone to merge

Vietnam mobile giants MobiFone and Vinaphone will merge as scheduled as part of the Government's restructuring plan for State-owned enterprises, the Ministry of Information and Communications said.

Vietnam mobile giants MobiFone and Vinaphone will merge as scheduled as part of the Government's restructuring plan for State-owned enterprises, the Ministry of Information and Communications said.

The statement, which ended the long debate and speculation on the fate of the two mobile operators, was made by Minister Nguyen Bac Son during an online conversations with citizens via government web-portal in Hanoi .

Son said the merge of the two companies was inevitable as it was the best solution for the restructuring of the telecom industry in Vietnam .

"The ministry will submit the plan for final approval from the Government," he said.

Son pointed out that the 88 million population now have some 130 million mobile phone subscribers of which 122 million were prepaid and only 8 million were post-paid.

"This is contrast to the rest of the world where most countries apply strict regulations on prepaid subscription" Son said.

Son said the mobile market competition in Vietnam was not healthy as most mobile operators here have just developed prepaid segments by reducing service prices and applying loose subscription requirements.

After merging, the two mobile service operators would mutually exploit VNPT's network infrastructure, while the mobile phone numbers of their subscribers would be maintained.

The merger decision came after the Government last year issued a new regulation on telecom ownership, which came into effect on June 1, 2011, stipulating that an investor with more than a 20 percent stake in one telecom firm cannot own more than 20 percent in another.

The new rule has forced VNPT, which owns 100 percent of both VinaPhone and MobiFone, to choose between divesting itself of one operator or merging them. -VNA

It is a dilemma because VinaPhone and MobiFone are too lucrative to give up, with the latter contributing half of VNPT's total profits, market analysts said.

It was understandable that VNPT wants to merge the two networks. The conglomerate's profit in 2011 was 10 trillion VND (470 million USD), of which 80 percent came from MobiFone and VinaPhone.

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