Fears of monopoly over VinaPhone, MobiFone merger

Fears of monopoly over VinaPhone, MobiFone merger

Fears of monopoly over VinaPhone, MobiFone mergerThe Ministry of Information and Communications (MIC) has yet to make any official decision on the merger of VinaPhone and MobiFone, one official said.

Despite confirmation of merger plans by the Vietnam Posts and Communications Group (VNPT), Le Nam Thang, Deputy Minister of MIC, said on March 20 that careful consideration should be taken before coming to a final decision on restructuring in order to prevent any possible negative impacts to operations and staff interests.
“The merger is clearly VNPT’s will, but it has not yet been approved by the ministry, ” Thang emphasised.
According to Thang, VNPT’s restructuring must meet some major requirements: efficient operation of the company, enhancement of competition in the industry, the sustainable development of both VNPT and the telecom industry in general as well as protect consumer interests.
Voicing concerns over the telecom market, Dr. Nguyen Quang A said that there are dangers that the merger could create an unhealthy environment for competition, making it harder for smaller firms to penetrate into the industry and survive. This, he said, would not be beneficial for customers.
“If this merger goes through, VNPT would hold around a 60% share of the Vietnamese mobile market. Combined, VNPT and Viettel would hold a combined market share of 95%,” he said.
Pham Hong Hai, Director of the MIC’s Department of Telecommunications, weighed in on the issue, commenting that a telecom market should have at least three providers with comparable market shares so as to foster healthy competition.
Some other economists have warned about possible devaluation of the brands MobiFone and VinaPhone that could be a result of the merger.



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