Nguyen Kim Anh, Deputy Governor of the State Bank of Vietnam, last week said Viettel, VNPT, and MobiFone have officially sent documents seeking for permission to pilot mobile money solutions, enabling payments for small-value goods and services with telecom accounts. All three providers are now completing the necessary procedures.
According to managing director of ASL Law Pham Duy Khuong, fintech is a special field in Vietnam where legal barriers remain a special issue of concern among foreign-invested enterprises, leaving the playground open for domestic players. “Telecom operators can take advantage of their technology expertise to venture afield into financial services for both corporate and individual clients,” he told VIR.
Khuong added, “These three network operators make the move in anticipation of growing non-cash transactions. Mobile payments are now a trend in Vietnam. Also, the country is promoting non-cash payments and develops a cashless economy.”
Payment intermediaries are acceptable in some countries, including Vietnam, China, and Singapore, making the Southeast Asian country more attractive to telcos.
Financial activities have been a focus among large telcos like Viettel and VNPT as they see it a profitable channel. For instance, FPT Telecom, a unit of FPT Group, reported a total after-tax profit of VND461 billion ($20 million) in the first quarter, up 29 per cent on-year. Revenue from financial activities contributed nearly VND108 billion ($4.7 million) to the result.
By the end of Q1, FPT Telecom’s assets hit nearly VND16.03 trillion ($700 million), with short-term financial investments, cash, and equivalents accounting for over 45 per cent, or about VND7.25 trillion ($315 million).
Other giants like Viettel Post and VNPT have also been gaining amid this trend thanks to efficient financial activities like banking deposits, lending, and interests from exchange rate differences.
Viettel Post, a member of the military-run industry and telecoms group Viettel, saw its short-term financial investment, cash, and money equivalents reaching nearly VND1.76 trillion ($76.5 million) in the first quarter, an increase by VND102 billion ($4.4 million) compared to the beginning of this year.
Moreover, Viettel Post cashed in after-tax profit of VND108.5 billion ($4.7 million) during that quarter, up 12 per cent on-year. The financial segment contributed over VND23 billion ($1 million) to its revenue.
With these positive results, Viettel Post set the target of obtaining revenue of VND21 trillion ($913 million), and after-tax profit of VND496 billion ($21.5 million) in 2021, both up 29 per cent on-year.
Good performance of units greatly contributed to Viettel Group’s total revenue of over VND264 trillion ($11.5 billion), and before-tax profit of VND39.8 trillion ($1.7 billion) in 2020, both up over 4 per cent from 2019. With this, Viettel became the telecom group with the highest brand value in Southeast Asia at $5.8 billion.
According to its 2020 financial statement, VNPT’s total assets reached over VND99.24 trillion ($4.3 billion), slightly rising from early 2020. The short-term financial investment, cash, and money equivalents alone increased to VND43.94 trillion ($1.9 billion), making up 44 per cent of its total assets.
Also last year, this group recorded net revenue from sales and services at VND50.51 trillion ($2.19 billion). Revenue from financial services rose to VND2.68 trillion ($116.5 million), thus contributing to the group’s after-tax profit of over VND5.7 trillion ($247.8 million).
This year, VNPT aims for a revenue of nearly VND45.2 trillion ($2 billion), up 5 per cent on-year. The group also plans to launch its initial public offering in 2021, expecting to gain proceeds of VND30.7 trillion ($1.35 billion), with the state holding 51 per cent of its charter capital.
Financial experts forecast that financial services will continue to be a focus among telecom titans in the months to come.
