Telecoms firms remain buoyant

Viet Nam Posts and Telecommunications Group (VNPT) and military-run Viettel said they were still confident they would meet this year’s earnings’ target, despite fierce competition that has resulted in diminished returns.

In 2009, Viettel’s revenue was VND18 trillion ($932 million) and net profit VND3.5 trillion ($181 million).

At the start of the year, Viettel announced ambitious plans to overtake VNPT.

The lion’s share of the two service providers’ profit comes from mobile services. Mobifone’s revenue target in 2010 was VND40 trillion ($2 billion), while Vinaphone set itself the goal of VND30 trillion ($1.5 billion) – which would account for about 70 per cent of the VNPT group’s total earnings.

“This year we will try our best to earn VND100 trillion ($5.1 billion). Based on the business results for the first six months of this year, we have achieved about 42 per cent of that target, which is up 29 per cent compared to the same period last year. If we maintain our present sales, it is quite possible for us to achieve VND100 trillion this year,” said Phan Hoang Duc, VNPT’s deputy general director.

Viettel has yet to reveale its figures. In a bid to attract subscribers, both firms have cut tariffs by 10-15 per cent this month. Also eating into profits are tightened regulations on pre-paid promotions. In addtion, it is estimated that the market is reaching saturation point, which has forced both companies to target low-income earners.

Unlike VNPT, Viettel has a diversified portfolio, which includes interests in Vinaconex, the Military Bank, investment operations abroad, import-export activities and real estate. However, these commitments are not expected to adversely affect its telecoms activities. — VNS

Tags: Vietnam Telecom, Vietnam telecom maket, Vietnam Telecoms firms