| Abstract | Telecommunication is an industry that develops very fast and has strongest competition in
Vietnam in recent years. With high level of competition, however, telecommunication
market in Vietnam is not open to foreign participants. Participation of strategic investors in
telecommunication sector is still very limited. Market competition mainly on price,
telecommunication products and services are not rich, diverse and consequently the level
of ARPU (average revenue per unit) is lower than other markets in region.
EVN Telecom, a member of Vietnam Electricity (EVN), is valuated as telecom firm has
great strength of telecommunication infrastructure. However, the performance in business
is rank at lower level than the average level of market. EVN Telecom is facing critical
challenges in finance, customers, and investment efficiency. The development of customer
is reducing, churn rates are very high, low ARPU (average revenue per unit), high
investment costs and operating expenditure are factors directly threat to the competition,
viability and development of EVN Telecom.
Equitizing EVN Telecom to improve competitiveness and position of EVN Telecom in the
top of three leading telecom operators in Vietnam are the strategic objectives of EVN.
However, EVN Telecom now has not been equitized, while the above challenges still exist
even with greater impacts.
The legal forms and regulations on equitization is still inadequate and having high level of
administrative procedures. This is key barrier to carry out the equitization of EVN Telecom
effectively. Therefore, an approach of merger and acquisition (M&A) is proposed to
implement equitization of EVN Telecom without initial public offering (IPO). Foreign
strategic partners will involve into M&A transaction and into business governance of EVN
Telecom, thereby, creating a transformation from inside of EVN Telecom after M&A
transaction. The internal and stable transformation will help EVN Telecom to overcome
the current weakness and challenges. |