Vietnam’s telecoms market is at the crossroads.
The nation’s telecom market is home to six mobile telecom services companies, all wholly state-owned except Vietnamobile and S-Fone, a number viewed as too many compared to market reality.
Deputy Minister of Information and Communications Le Nam Thang said Vietnam did not restrict the number of firms joining the telecom market as per its commitments with the World Trade Organization (WTO).
“Frequency resources are like land resources. The frequency bands to firms will be divided if too many players join the market. Besides, state firms are taking the upper hand in the telecom market whereas the telecom development planning did not encourage too many state firms to jump into this market,” Thang said.
Thang’s argument was proven by recent facts when poorly-performed EVNTelecom was obliged to merge into Viettel from early 2012, S-Fone struggled to find way to return to its past glory in 2006-2008 and Beeline just said farewell to its foreign partner Vimpelcom.
Former chief of the General Department of Post and Telecommunications Mai Liem Truc assumed Vietnam’s telecom market had exposed shortcomings in some recent years, hurting firms and consumers if these blemishes were not addressed.
The biggest roadblock is that major firms in the telecom field are state-owned and firms from other economic sectors yet to step into this market.
In Truc’s view, there needed to be state firms in the local telecoms market parallel to several private equity businesses to create an equal competition.
“State capital ownership in these state firms may be above 50 per cent only, but not over 95 per cent as currently. Mergers and acquisitions should be viable options to pull down telco number and let firms from other economic sectors to come onto the scene,” Truc said. VIR