Large telecoms businesses in Vietnam continue to face setbacks in their performance, prompting them to venture further into the new digital space.
State-owned MobiFone Corporation saw its parent company’s revenue of VND6.63 trillion ($288.26 million) in the first quarter, meeting 23.1 per cent of the yearly target and down 5.4 per cent on-year. Its pre-tax profit reached nearly was $36.7 million, meeting 38.9 per cent of the yearly target and down 27.2 per cent on-year.
According to Minister of Information and Communications Nguyen Manh Hung, MobiFone is in a deadlock in terms of growth and new development space.
“There are two major problems occurred with MobiFone. The first is within the internal organisation and the second issue comes from external industry challenges,” he said. “Overcoming these two challenges, MobiFone will innovate both from the inside and from the outside. It should consider these two major problems as two important nudges to innovate, and to reinvent themselves.”
The minister made the statement when attending the corporation’s meeting to celebrate its 30-year anniversary on April 14.
The issues have driven back the company’s growth for a year. In 2022, the mobile network operator failed to meet the yearly targets, although it set lower targets than 2021.
The difficulties continue in the first months of 2023 with the poor performance. According to the Commission for the Management of State Capital at Enterprises (CMSC), MobiFone cut its pre-tax profit target for this year by half.
In a move to change the situation and tap into the digital transformation trend in 2023, MobiFone will implement a strategy to promote business in new fields such as digital finance, health, and education.
Strengthening cooperation at home and abroad is key to MobiFone’s strategy. For example, it attended the Mobile World Congress in Spain, signed a cooperation agreement with Nokia, and joined the China visit by the delegation of the CMSC.
Other big telecommunications businesses in Vietnam are in similar situations, growing below the country’s GDP growth.
Vietnam Posts and Telecommunications Group (VNPT) made consolidated revenue of $590.43 million in the first three months of the year, of which the parent company’s revenue reached $413.47 million, or 22.6 per cent of the yearly plan.
The group’s before-tax consolidated profit was estimated at $70 million during the period, of which the parent company’s pre-tax profit was $52.6 million, or 22.9 per cent of the plan, up 3.2 per cent on-year.
VNPT has embraced the digital age. It signed comprehensive cooperation agreements with a number of cities and provinces and cities, and promoting strategic cooperation with a number of private economic groups and local banks such as Vietinbank, Vietnam Airlines, and others.
The group has been deploying the digital government ecosystem for all provinces and cities as well as a digital health ecosystem for nearly 2,000 hospitals, and accessing and providing services via online channels for more than 50,000 small- and medium-sized enterprises.
VNPT also has a policy of converting invoices to electronic invoice from cash registers to meet the requirements of the Ministry of Finance and General Department of Taxation. It standardises mobile subscribers’ information in line with the National Population Database, according to the regulations of the Ministry of Information and Communications.
Similarly, Vietnamobile Telecommunications JSC saw first-quarter revenue of $6.57 million, down 69 per cent on the same period last year.