VNPT sets 2019 target for IPO

Vietnam’s leading state-owned telco is set to make its initial public offering and complete its equitisation in 2019.

One of Vietnam’s leading telcos will soon be joining the public market

This was confirmed by Vietnam Posts and Telecommunications Group (VNPT) chairman Tran Manh Hung in a talk with VIR.

The telco company has founded a specialised committee to work on the group’s equitisation plan, and required member units to make necessary preparations towards realising the move. The group just submitted its equitisation plan to the Ministry of Information and Communications (MIC), which will then report to the prime minister.

VNPT will engage in conducting initial public offering (IPO) procedures after getting the government’s approval. A highlight of its shakeup plan is the proposal to establish a new corporation to work on technological aspects.

The new unit is designated to not only produce hardware, but also software to handle important tasks. It would be the fourth member of VNPT, with its three existing corporations – VNPT VinaPhone, VNPT Net, and VNPT Media – established following the group’s restructuring two years ago.

VNPT’s ICT capacity has developed by leaps and bounds in the past two years. The group has developed and supplied diverse software applications to the government and its ministries and sectors, provided smart city software for many localities, and even created solutions and applications for healthcare and education.

The telco giant currently holds 50 per cent market shares in many ICT services.

Apart from ICT services, VNPT has spent big on research and development, striving to roll out products carrying its brand, such as handsets, the set-top box MyTV, modern internet services, and high-speed Wifi.

These products have helped reduce VNPT’s reliance on foreign partners, and given the firm ICT products to roll out under a Vietnamese brand for export to global markets.

The proposal on establishing the new corporation has received an in-principle approval from the MIC.

In addition, the equitisation plan proposes restructuring the current VNPT global unit (VNPT-I). Its trading segment will be transferred to its member firm VinaPhone, while VNPT-I will focus on global operations.

“Much work remains to be done on the path to equitisation, such as hiring consultants, fixing the enterprise value, and selecting strategic partners. In respect to consultants, our top choice is well-respected foreign units,” said Hung. “Though impediments persist with our equitisation plan, like waiting for a guiding decree on the land issue and handling costs related to hiring foreign consultants, we still commit to completing all necessary procedures in 2018 and making our IPO in 2019.”

In its equitisation plan, VNPT also asks for permission to retain 20 per cent of MobiFone’s chartered capital when MobiFone– a former chief member firm of VNPT and one of the top players in the local telco business – makes its IPO next year.

Hung said that when MobiFone split from VNPT in August 2014, this made a dent in the latter’s chartered capital which has yet to be filled.

In a working session with French bank BNP Paribas this May, Deputy Minister of Information and Communications Pham Hong Hai said that when equitising VNPT and MobiFone, the Vietnamese government doesn’t take optimising revenue as the top target. The ultimate target instead is sustainable operation in the post-equitisation period.

By Huu Tuan