VNPT's Post, telco arms to branch out as two enterprises
Vietnam Post and Telecommunication Corp (VNPT) is rolling with the punches as it gears up for competitive pressure and a bold restructure.
The State-owned giant will operate as two entirely separate corporations by 2003.
The historic split will kick off at the district-level post network.
Trials began in 11 cities and provinces last year, and will be completed in the rest of the country by mid-August this year.
The corporation has finished 40 per cent of its full-year plan, contributing more than VND1.4 trillion (US$90 million) to the State budget, an increase of 6 per cent compared to the first half of last year.
A fee reduction plan for mobile phones, Internet services and international communications came into effect early this month.
But shortcomings still exist, particularly in management, the rate of return on investment, and flexibility in providing services.
The split is designed to create two independent organisations which combine the responsibilities of public service with the rigour of a corporate environment.
The unclear relationship between the post and telecommunications arms has caused VNPT to perform poorly over the years. Management tended to focus on the lucrative telecommunications business while neglecting the postal services.
As a result, the under-developed postal business accounts for just 5 per cent of VNPT’s revenue, although it employs 50 per cent of its personnel.
This imbalance will create major problems for the postal service after the split.
Management has decided not to reduce staffing levels, but will no longer have the telecommunications cash cow to prop up its payroll.
Plans are being developed to pour more money into advanced equipment and a training programme for staff.
Staff who are no longer needed on the production line will be diverted into new services.
Nguyen Quoc Thinh, chief of VNPT’s human resources department, said the corporation will always be responsible for ensuring the workers’ average income. All staffing concerns will be dealt with before the split.
The district post will take charge of cultural-postal centres, postal delivery, and newspaper distribution. Currently, the district post collects commission from its role as a general agent for telecommunication services.
Postal revenue is currently between VND600-700 billion per year. VNPT management anticipate that this could increase to VND1 trillion after separation.
Government officials and VNPT management have high hopes that the split will revolutionise both the post and telecommunications divisions. In particular, they said the split will allow both sectors to specialise and operate more efficiently.
However, analysts caution that VNPT must focus on narrowing the gap between rural and urban areas if it is to achieve its development targets. This will help to expand the network and also ensure workers are being effectively employed.
