The statement, which ended the long debate and speculation on the fate of the two mobile operators, was made by Minister Nguyen Bac Son during an online conversations with citizens via government web-portal in Ha Noi.

Son said the merge of the two companies was inevitable as it was the best solution for the restructuring of the telecom industry in Viet Nam.

"The ministry will submit the plan for final approval from the Government," he said.
Son point out that the 88 million population now had some 130 million mobile phone subscribers of which 122 million were prepaid and only 8 million were post-paid.

"This is contrast to the rest of the world where most countries apply strict regulations on prepaid subscription" Son said.

Son said the mobile market competition in Viet Nam was not healthy as most mobile operators here just developed prepaid segments by reducing service prices and applying loose subscription requirements.

After merging, the two mobile service operators would mutually exploit VNPT's network infrastructure, while the mobile phone numbers of their subscribers would be maintained.

The merger decision came after the Government last year issued a new regulation on telecom ownership, which came into effect on June 1, 2011, stipulating that an investor with more than a 20 per cent stake in one telecom firm cannot own more than 20 per cent in another.
The new rule has forced VNPT, which owns 100 per cent of both VinaPhone and MobiFone, to choose between divesting itself of one operator or merging them.

It is a dilemma because VinaPhone and MobiFone are too lucrative to give up, with the latter contributing half of VNPT's total profits, market analysts said.

It was understandable that VNPT wanted to merge the two networks. The conglomerate's profit in 2011 was VND10 trillion (US$470 million), of which 80 per cent came from MobiFone and VinaPhone.

Source: VNS