Vinaphone, MobiFone likely to merge following new ownership rule: report

TN News

Email Print

State-run Vietnam Posts and Telecommunications Group (VNPT) is likely to merge its wireless carriers MobiFone and Vinaphone, following a new rule that aims to reduce unfair competition on the domestic market.

The Ministry of Information and Communication said it will officially ban a company from holding more than 20 percent stakes at two mobile service providers at the same time, starting August 1.

This means that VNPT, which is now the sole owner of both Vinaphone and MobiFone, will have to either pull back from one of the companies or merge them. News website VnEconomy on Wednesday cited analysts as saying the merger option is more likely to be chosen.

Vietnam's government last year already introduced a regulation stipulating that an investor holding more than a 20 percent stake in one telecom firm cannot own more than a 20 percent stake in another.

The new rule has taken a step further to restrict concurrent ownership in the mobile service segment in particular.

RELATED CONTENT

VNPT announced a plan to merge MobiFone and Vinaphone earlier this year, with analysts saying that both of the networks are too lucrative for the group to divest from. Together, the carriers hold more than half of Vietnam's mobile phone market.

Vu Ba Phu, deputy head of the Vietnam Competition Authority under the Ministry of Industry and Trade, was cited by VnExpress as saying in March 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.

Like us on Facebook and scroll down to share your comment

More Business News