The Vietnamese telecom ministry has revealed that state-owned mobile operators Vinaphone and MobiFone will merge, putting an end to speculation about the fate of the two companies.
The minister for information and communications, Nguyen Bac Son, has revealed the plan through a government web portal, VietnamNet Bridgereported.
Under the plan, which still requires government approval, the merged companies would then share state-owned parent VNPT's network infrastructure.
The merger is a result of government legislation introduced last year preventing investors with at least a 20% stake in one telecom provider from owning more than 20% of another. This will require VNPT to either merge Vinaphone and MobiFone, or divest one or the other.
With the two operators accounting for a reported 80% of VNPT's profits, a merger was the most likely outcome.
Son said the merger was seen as the best way of restructuring the mobile industry, which he described as unhealthy due to local operators' reliance on the pre-paid market and the proliferation of pre-paid SIMs.
He said that Vietnam had a population of 88 million, but 122 million pre-paid subscriptions and just 8 million post-paid users.
The ministry has been attempting to crack down on the amount of pre-paid SIM cards sold, and is considering laws limiting the amount one person can register with a single provider to three.