Telecom merger can be allowed despite contravention of competition law: official

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A plan to merge Vinaphone and MobiFone, which together hold more than 55 percent of Vietnam's mobile phone market, may violate competitition rules, but an official says an exception can be made in this case.

Vu Ba Phu, deputy head of the Vietnam Competition Authority under the Ministry of Industry and Trade, was cited by VnExpress as saying that Vietnam's Competition Law bans any merger that creates a business with a market share of more than 50 percent. However, if the merger is deemed necessary, it can be approved by the government, he said.

According to local media, the merger has been approved by the Ministry of Information and Communications. It still requires the approval of Prime Minister Nguyen Tan Dung.

Phu said market share is not the only issue that needs to be taken into consideration, adding that the share may change every year. Whether the company can become more competitive and grow after the merger is also important, he said.

State-owned Vietnam Post and Telecommunications group, also known as VNPT, runs both Vinaphone and MobiFone. The merger plan comes as the group, together with other state-owned enterprises, are being restructured.

Dang Quoc Tien, a corporate finance official at the Ministry of Finance, said it is a waste to have both MobiFone and Vinaphone under the same group operating independently, using infrastructure of their own.

"A group shouldn't have two networks operating in two different ways like that," he said.

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