Telco to speed up restructuring process

Saturday, Aug 10, 2013 10:52

VNPT is expected to develop business for better growth but had still failed to achieve positive results. Photo
HA NOI (Biz Hub)— Prime Minister Nguyen Tan Dung has asked Viet Nam Posts and Telecommunications Group (VNPT) and its newly-appointed general director Tran Manh Hung to accelerate the outfit's restructuring process.

PM Dung made the request at a working session with the group on Thursday in Ha Noi, just days after Hung replaced Vu Tuan Hung.

The restructuring process is essential to comply with measures outlined in Viet Nam's comprehensive plan to restructure State-run enterprises (SOEs), focusing on economic groups and corporations between 2011–15 with a view to turning the group into one of the country's strongest telecoms giants.

In the first half of 2013, the group posted total revenues of VND54.2 trillion (US$2.5 billion), a year-on-year increase of 2.6 per cent, bringing a total profit of VND4.418 trillion ($210 million). The profit equates to nearly 48 per cent of the group's 2013 target.

In 2011, VNPT earned a profit of VND10 trillion ($476 million), marking a surge of 6.15 per cent on the previous year's results. Last year, profits dropped by VND1.5 trillion to VND8.5 trillion, said VNPT chairman Pham Long Tran.

Tran stated his group had outlined business plans for better growth but had still failed to achieve positive results.

He attributed the group's low growth to global and domestic economic difficulties, adding that the group also incurred large losses due to decreasing demand for its fixed-line telephone services.

He said being a State-owned business, VNPT had to be involved in many public telecoms services for fields such as national security and defence, as well as natural disaster prevention.

In addition, many of the businesses subscribed to VNPT had suffered losses amidst the global economic turmoil or went bankrupt, causing a huge decrease in the group's revenue.

Tran said another factor was that being a State-run business, VNPT was burdened with cumbersome apparatus and had been slow to renovate itself across a number of areas.

This year, the group set a growth target of 10 per cent compared to 2012, said the chairman. He hoped with the new business model submitted to the Government and the Ministry of Information and Communications, VNPT would have more opportunities to renew its business and develop further. — VNS

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