The telecommunication market is the site of a new race between VNPT and Viettel, expected to reach 100 trillion dong (nearly $5.3 billion) in revenue for 2010.
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Up to 60 percent of Viettel’s turnover comes from mobile services and the remainder results from real estate, phone distribution plus postal and Internet service. |
Last year, VNPT earned 78.6 trillion dong, up 30 percent, and around 13.5 trillion dong of profit. With 2010 predicted as a difficult year, VNPT initially aimed to reach 94 trillion dong of revenue in 2010, 20 percent over that of 2009, and set profit goals at a 10 percent increase.
Viettel initially set a goal for 96 trillion dong of revenue in 2010, 60 percent over 2009. This group received 60 trillion dong of turnover and 10 trillion dong in profit for 2009.
If Viettel fulfills its goal for 2010, VNPT will lose its number-one position in the telecom market, which it has held for many years.
After Viettel announced its 2010 goal, VNPT adjusted its annual plan by increasing targeted turnovers by 6 trillion dong, to 100 trillion dong ($5.3 billion), aiming to profit 15 to 16 trillion dong ($790 million) and paying taxes of 8.5 to 8.7 trillion dong.
In the immediate aftermath, Viettel raised its yearly goal to 100 trillion dong, according to VNExpress.
Economic experts note that the race between the two largest telecom groups is not new, but the question is, what will result and what sources of revenue will emerge for VNPT and Viettel?
An economist from the Central Institute for Economic Management commented that the major source of revenue for both companies comes from their mobile services.
VNPT currently has two mobile networks, VinaPhone and MobiFone. Both aim to earn 61 trillion dong of revenue in 2010. VNPT’s revenue from postal services, broadband Internet and fixed telephone service is much higher than Viettel’s but very small compared to the turnover from mobile services.
Up to 60 percent of Viettel’s turnover comes from mobile services and the remainder results from real estate, phone distribution plus postal and Internet service. Viettel is also a pioneer investor in the foreign telecom market, building fixed phone, mobile phone and Internet networks in Laos, Cambodia and Bangladesh. However, Viettel has not earned profits from these projects yet.
Analysts speculate that the local telecom market is nearly saturated, both for fixed and mobile services. The lucrative mobile market is now in a race for charge reductions. Both VNPT and Viettel have proposed to slash charges by 20-25 percent in 2010. These plans are now being considered by the Ministry of Information and Communications.
If so, the two groups’ revenue will undoubtedly fall, so how they will earn 100 trillion dong this year is still an unanswered question.
PV
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