Investors impatient for telecom equitisation

10:40' 02/07/2007 (GMT+7)

VietNamNet Bridge – The equitisation of some telecom firms in Vietnam was announced by state agencies in 2005, but so far none of the telecom firms have been equitised. In the eyes of investors, the equitisation process of Vietnamese telecom companies is going at a snail’s pace. MobiFone gets ready According to sources from MobiFone, this company is completing formalities for equitisation this year, and in early 2008 it will perform IPO (initial public offering). Around five partners have expressed their desire to buy MobiFone stocks to become the firm’s strategic investors. However, as it is currently selecting a consultant only, MobiFone isn’t considering this issue yet. Le Ngoc Minh, MobiFone’s director, said that he didn’t know what the value of MobiFone was at this moment. Once MobiFone finds its consultant, tasks related to equitisation will be quickly fulfilled within 2007 to prepare for the IPO early next year. Also a subsidiary of the Vietnam Post and Telecommunications Group (VNPT), VinaPhone can’t immediately conduct equitisation like MobiFone. VinaPhone director Hoang Trung Hai said that there was no detailed plan about VinaPhone’s equitisation yet. VNPT is focusing on the equitisation of MobiFone and VinaPhone will be equitised after MobiFone’s equitisation is completed. Other mobile information companies that will be equitised after MobiFone and VinaPhone are Viettel Telecom and EVN Telecom. However, they have made any moves for this task. Perhaps they want to learn something from MobiFone and VinaPhone. Deputy Minister of Post and Telematics Tran Duc Lai doesn’t agree with the idea that mobile information firms are doing business well so they don’t want to equitisate, which is responsible for the tardiness in equitisation. “Implementation of equitisation is different for each company and this task will be conducted suitably to their ability. Viettel Telecom and EVN Telecom are new businesses and they are designing equitisation plans that are appropriate to their actual situations,” Mr. Lai said. While MobiFone is urgently promoting its equitisation process, equitisation seems to be not a priority of Viettel Telecom. Perhaps this company is afraid that its equitisation will attract small shareholders who will focus on short-term benefits and this will influence its strategy to build a big corporation in the long run. Viettel Telecom’s plan in the near future is developing strongly in rural and remote areas, where benefit doesn’t come in immediately, so shareholders will not like this. The firm, thus, will equitise its subsidies firstly. Viettel Deputy General Director Nguyen Manh Hung said that Viettel had established a joint stock company on value added services for mobile phones and this company would be equitised first. EVN Telecom has also chosen the same path of equitisation as Viettel. Impatient investors The Vietnam Association of Financial Investors (VAFI) has sent many documents urging telecom companies to quickly perform equitisation, which shows how impatient investors are and how great their interest is in shares of mobile information service companies. At the Vietnam Enterprise Forum, under the framework of the mid-term Consultative Group Meeting 2007, held on May 30 in Hanoi, Alain Cany, Chairman of the European Chamber of Commerce (Eurocham), said that foreign investors were anxious to take part in the equitisation process of a significant field like telecom. “To help foreign investors have the best preparation for their participation into the telecom sector, Eurocham and its members hope that the Vietnamese Government will introduce an itinerary for the participation of foreign investors soon,” he said. The Financial manager of Norway’s Telenor group said that when Telenor conducted equitisation the group faced a lot of problems. This group was afraid that it would lose control over the firm. Some said that as Telenor was known in many countries and it was a strong brand equitisation was unnecessary. However, with his experience, the Telenor official said that Vietnamese telecom firms should speed up the equitisation process and bring their stocks to the stock market as soon as possible. However, he agreed that appraising the value of shares of telecom firms is often very complicated. Mark Shuper, Morgan Stanley Bank’s Managing Director, said that value appraisal for telecom companies is best when they are in the development phase, so they should choose the best time for doing this task. However, he commented that Vietnamese telecom companies would not be equitised this year. “This process will take place strongly next year or the following years and of course, we are always ready to participate in this process,” he said. (Source: Viet Nam Net)