In keeping with Vietnam Post and Telecom Group (VNPT)' June-approved grandscale restructuring plan, a recent proposal to establish three new firms was submitted to the Ministry of Information and Communications (MIC) and the Prime Minister.

The three firms, VNPT- Net, specialising in network infrastructure; VNPT- Vinaphone, operating in telecommunications; and VNPT- Media, operating in multi-media services, will divide VNPT's core businesses into specialised firms, similar to a split-up.

The restructuring of VNPT will need to reallocate human and financial resources to avoid overlap, said the group's general director, Tran Manh Hung.

The three new firms will operate independently and will be vigorously evaluated for efficiency by the VNPT group.

According to Hung, restructuring will help tighten the budget, simplify organisation, and reduce corporate red-tape. Siphoning off the group's core businesses into specialised firms is a move to enhance competitiveness and efficiency, he added.

Deputy director of VNPT, Pham Duc Long, said the division of operations would not create difficulties for the reallocation of VNPT's profits, nor the group's capacity to oversee the management of day-to-day operations.

He said that new accounting departments would be set up to monitor the allocation of profits and a new management model would be put in place.

The Government's decision 888/QD-TTg, made back in June, approved VNPT's restructuring plan which promised to divest capital from 63 non-core companies.

The group has successfully divested 400 billion VND (18.8 million USD) from Sacom Investment and Development Corporation (SAM) and will continue withdrawing its 700 billion VND (32.9 million USD) from Maritime Bank.

The divestment strategy takes on its largest investments first before rounding up the process with smaller ones. Divestment from the 63 companies will be completed next year, said a VNPT representative.

So far the communications and media group has maintained stable growth despite the restructuring process started this summer. The group's revenue in the first nine months of this year has remained healthy at 77 trillion VND (3.6 billion USD).

Hung said that the group set a growth target of 10 percent for the 2014 year. However, for the next year the target growth rate was set at 25 percent as things hopefully become more stable and restructuring is well under way.

VNA/VNN