Most of big telcos are state owned ones. More than 95 percent of the assets of the telecom networks belong to the state. This shows that the Vietnamese telecom market remains uncompetitive.

This is the viewpoint of Dr Mai Liem Truc, former Deputy Minister of Information and Communication.

Truc, speaking at the workshop on the prospect of Vietnam’s telecom industry in 2012 held by the ICT Press Club on December 28, 2011, said that the industry has undergone three phases of development.

In 1980s, Vietnam made great efforts to digitalize telecom services. In 1990s, the market could see the clear signs of the “monopoly”, when there were only two state owned mobile networks operating in the market. In 2000s, Vietnam began shifting to operate as a competitive market with the market joining of Viettel, the Military Telecom Company.

However, in the two recent years, 2010 and 2011, the telecom market has shown the risks of unsustainable development which may cause disadvantages to both consumers and the State. The investment of telcos has show limitations due to the economic crisis, which affects the network quality and services. Newly established businesses have been facing a lot of difficulties and some of them are on the verge of bankruptcy.
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“A lot of problems still exist, when big enterprises are all state owned, and more than 90 percent of telecom networks in Vietnam belong to the State,” Truc said.

“The current picture of the telecom market can be imagined as follows: a father asks his children to live independently and they compete with each other to earn their living. In this case, there still could not a real competition,” he explained.

Truc has urged the State to re-arrange telecom companies, and even revoke some investment licenses. According to him, Vietnam should only let four big enterprises exist on the market instead of too many enterprises as currently.

Agreeing with Truc, Deputy Minister of Information and Communication Nguyen Thanh Hung thinks that the competition in the true sense of the word has not existed in the Vietnamese market. The key enterprises are state owned ones, while the majority of the assets still belong to the State.

Hung has informed that in the time to come, merger and acquisition, and the dissolution will take place in the telecom industry in order to create a real competitive market.

Especially, the process of merger and acquisition will show the will of the State. For example, the merger of EVN Telecom into Viettel is a decision by the State. Once the market remains not really competitive, it is unreasonable to make comments that the decisions of the State need to come in line with the market mechanism.

The Government has promulgated the Decree No 25 that guides the implementation of the Telecom Law, stipulating that an individual or institution, who has holds more than 20 percent of the chartered capital or stakes in a telecom company already, must not hold more than 20 percent of the chartered capital or stakes in another company operating in the same market.

Hung, mentioning the decree, emphasized that the decree shows the determination of the State to create a market with healthy competition, and not to let the corporate monopoly

Meanwhile, the equitization process of MobiFone, a big mobile network, which began several years ago, has not completed yet. Local newspapers have reported that Laurent Zylberberg, who has become the manager of Orange France Telecom OFT in Vietnam, has confirmed the determination to become a strategic partner of MobiFone.

Source: VNN