Industry leadership incentives proposed for three state-owned giants

The three firms, representing the defense (Viettel is military-owned), telecom and energy sectors, have been selected to lead the establishment and expansion of supply chains domestically and internationally as part of the country’s plan to develop state-owned companies, the ministry said in a proposal to Prime Minister Nguyen Xuan Phuc.

The ministry said these were important sectors in the nation’s security and development as they developed the needed infrastructure for Industry 4.0 (Fourth Industrial Revolution) and the era of digital transformation.

MobiFone was chosen to be the leader in the telecom industry because it has shown good business results and has picked up management experience from its Swedish telecom partner Comviq.

The company is focusing on building an ecosystem of digital transformation products for private companies which will help it become a leader in the sectors of information and data technology.

Even as the government hastens the equitization of MobiFone, it should remain the controlling shareholder and prevent any foreign firm from becoming a strategic shareholder, the ministry said.

National utility Vietnam Electricity (EVN) has a network of power plants that make up nearly half of total electricity production nationwide and it also has experience in energy development, especially in clean energy.

As such, the government should fund EVN in implementing renewable projects, especially offshore wind power plants, and equitize the company soon to increase its financial resources, the proposal said.

Military-run Viettel is a leading company that develops, manufactures and imports military and defense products. It aims to be among the top 80 companies in the world having the highest revenue from national defense operations by 2050.

The government should establish a national defense development fund using the company’s post-tax profits, the ministry said.

Some of the criteria applied in shortlisting the three companies include a charter capital of over VND1.8 trillion ($78.2 million) and the ability to expand domestic market share to at least 30 percent.