Vietnam’s Ministry of Public Security plans to take a majority stake in FPT Telecom, one of the country’s largest internet providers, as part of its efforts to boost national cybersecurity, according to a document seen by Reuters.
The ministry, which oversees the police, has become increasingly involved in Vietnam’s internet and telecoms sector. It took control of the country’s third-largest telecoms operator, MobiFone, last year and also spearheaded a tightening of data protection rules that caused concerns among foreign tech firms.
Under the plan, Vietnam’s State Capital Investment Corporation (SCIC), a holding company for assets controlled by the state, will transfer its stake in FPT Telecom to the ministry, the document showed.
SCIC owns 50.17% of FPT Telecom, while FPT Corp, Vietnam’s largest private tech company, has a 45.66% stake but retains control of the unit, according to FPT Telecom’s financial statements for last year.
Reuters was not able to ascertain whether the transfer would lead to the ministry taking effective control of FPT Telecom.
The public security ministry did not reply to a request for comment. FPT Corp said it currently had no information to share on the matter. The finance ministry, to which the plans have been submitted, also did not reply to a request for comment.
Shares in FPT Corp tumbled nearly 7% on Wednesday, the day after the document was submitted. An investor in FPT Corp and a broker said the slide was caused by uncertainty over the future of FPT Telecom which is an important source of revenue for the group.
The shares have pared some of those losses since then and are now down 2.8% compared to Tuesday’s close.
In addition to providing internet services, FPT Telecom is involved in the development of undersea fibre-optic cables, which Communist-run Vietnam considers a national priority as most of its existing cables are ageing and prone to accidents.
The transfer “will contribute to the good performance of the functions and tasks of the Ministry of Public Security“, the document dated April 14 said. It listed the protection of data and the monitoring and prevention of cyber risks as core functions of the ministry.
The document urges the finance ministry to seek the prime minister’s approval for the plan.
Vietnam’s largest telecoms operator, Viettel, is owned by the defence ministry, while the second-largest, Vietnam Posts and Telecommunications Group (VNPT), is controlled by the SCIC, which is overseen by the finance ministry.
Reuters
