Telcos to hook up in landmark deal

Vietnam’s first telecoms merger and acquisition deal will incur between FPT and EVN Telecom this year.

The Financing and Promoting Technology Corporation (FPT) management board agreed on October 30 for the corporation to issue corporate bonds no higher than VND2 trillion ($105.2 million) for the deal this year.

Of which, the capital will acquire 44 per cent of EVN Telecom excluding the remaining 16 per cent stake held by its affiliate FPT Telecom.

A source from EVN Telecom said taking into account the 30 per cent state stake held by EVN Telecom’s parent Electricity of Vietnam (EVN), the state stake in EVN Telecom still met the required 51 per cent for a facility-based operator.

“EVN still represents the state stake in its affiliate. However, FPT will take a management position in EVN Telecom after the deal,” said an EVN Telecom source.

FPT Corporation did not disclose a timeline for corporate bond issuance. EVN Telecom is the country’s third largest facility-based operator and planned to complete its equitisation this year. The operator, however, had the smallest mobile market share in Vietnam with 1.1 per cent by May this year. EVN Telecom is now expanding its 3G network.

EVN Telecom invested VND3 trillion ($157.8 million) for 3G infrastructure by March this year in the first phase with 2,500 base transceiver stations node B for catering services in five cities of Hanoi, Ho Chi Minh City, Haiphong, Danang and Can Tho. The partnership committed to install 2,421 node B stations in the first year of licencing. EVN Telecom plans to triple the number of node B stations by the end of this year.

By the end of September this year, FPT Corporation reportedly earned VND1.5 trillion ($81.4 million) in profit and VND16.7 trillion ($880 million) in revenue, posting year-on-year growth rate of 22 per cent and 30 per cent, respectively. Of this, FPT Telecom earned a profit of VND443 billion ($23.3 million) and VND1.7 trillion ($93 million) of revenue, posting a 2 per cent lower year-on-year growth rate against the figure in September last year. – VIR

Tags: EVN Telecom, FPT