production and business, reducing costs, on the other hand, shows that the selling price of joint venture products is high (compared to the selling price on the world market).
Joint ventures VKX, VINA - GSC, ANSV: The above two indicators are not stable.
fixed (five holes, five hits) and low scores.
Table 2.27 Some economic indicators of the joint venture (USD unit)
VINADEASUNG | ALCATEL | VKX | GSC | |||||||||
Ratio profit margin | Profit/Revenue | Submit NS (USD) | Ratio profit margin | Profit/Revenue | Submit NS (USD) | Ratio profit margin | Profit/Revenue | Submit NS (USD) | Ratio profit margin | Profit/Revenue | Submit NS (USD) | |
1993 | 1.85 | 6.52 | 45291 | |||||||||
1994 | 7.72 | 5.20 | 126835 | -3.52 | -19.74 | 21700 | ||||||
1995 | 31.65 | 8.33 | 534805 | 14.23 | 4.03 | 84000 | 10.60 | 5.03 | 119389 | -2.55 | -27.60 | 24601 |
1996 | 102.25 | 24.98 | 1266757 | 14.68 | 4.71 | 260000 | 3.27 | 2.12 | 112058 | 1.64 | 3.27 | 49400 |
1997 | 24.96 | 16.16 | 946779 | 0.48 | 0.27 | 84000 | 2.25 | 1.17 | 251231 | -1.98 | -6.88 | 39462 |
1998 | 26.09 | 17.66 | 992765 | 0.42 | 0.19 | 698210 | 5.63 | 3.89 | 232662 | 9.93 | 14.37 | 156978 |
1999 | 18.84 | 18.89 | 1695176 | 6.78 | 2.44 | 1751740 | -6.42 | -14.44 | 84561 | 1.38 | 5.07 | 122068 |
2000 | 10.07 | 12.61 | 728286 | 0.96 | 0.44 | 960430 | -1.64 | -1.92 | 123541 | 12:30 | 21.57 | 339261 |
2001 | 27.08 | 17.92 | 1579223 | 11.37 | 6.58 | 395734 | 12.48 | 7.27 | 250124 | -5.92 | -30.25 | 299505 |
2002 | 29.17 | 18.16 | 2002863 | 9.10 | 5.45 | 1393959 | 13.17 | 6.44 | 261200 | 21.76 | 17.94 | 367655 |
2003 | 46.44 | 26.30 | 2000000 | 38.02 | 8.14 | 3174394 | 11.53 | 11.96 | 387900 | 0.28 | 1.14 | 201665 |
2004 | 39.77 | 15.11 | 2174193 | 42.48 | 13:30 | 1767742 | 9.19 | 7.53 | 722580 | 2.55 | 4.87 | 348387 |
2005 | 53.69 | 16.42 | 2645161 | 50.88 | 13.21 | 1987096 | 18.24 | 9.84 | 1161290 | -2.63 | -5.79 | 490322 |
Total | 1673813 | 12579005 | 3706536 | 1600595 | ||||||||
TELEQ | FOCAL | VFT | NEC | |||||||||
Profit margin | Profit/Revenue | Submit NS (USD) | Profit margin | Profit/Revenue | Submit NS (USD) | Profit margin | Profit/Revenue | Submit NS (USD) | Profit margin | Profit/Revenue | Submit NS (USD) | |
1993 | ||||||||||||
1994 | ||||||||||||
1995 | ||||||||||||
1996 | ||||||||||||
1997 | -28.35 | -10.08 | 500928 | -23.59 | -57.91 | 89541 | ||||||
1998 | -0.66 | -0.14 | 856887 | -0.09 | -0.06 | 234254 | -1.30 | -63.58 | 49532 | |||
1999 | 1.85 | 0.97 | 1861340 | 7.76 | 6.41 | 427856 | -8.23 | -26.51 | 318452 | -9.30 | -17.30 | 587574 |
2000 | 11.42 | 4.93 | 1809796 | 11.40 | 8.80 | 427954 | 16.66 | 15.94 | 112044 | 2.88 | 2.17 | 1754563 |
2001 | 61.89 | 12.60 | 2633380 | 19.15 | 18.83 | 242475 | 26.67 | 19.83 | 140000 | 9.94 | 6.37 | 2221420 |
2002 | 19.22 | 7.74 | 1999101 | 23.94 | 15.10 | 865937 | 24.59 | 26.60 | 225100 | 12.19 | 6.25 | 2603267 |
2003 | 57.35 | 8.38 | 3660690 | 20.59 | 15.54 | 526938 | 16.02 | 21.36 | 194000 | 18.80 | 10.51 | 1482000 |
2004 | 36.70 | 9.88 | 2206451 | 26.36 | 20.56 | 522580 | 3.12 | 5.13 | 425806 | 18.71 | 7.00 | 2580645 |
2005 | 57.78 | 26.17 | 3161290 | 18.81 | 14.97 | 483870 | 3.12 | 3.65 | 154838 | 21.47 | 8.01 | 2438709 |
Total | 13322122 | 2814955 | 1039128 | 8648824 | ||||||||
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Source: VNPT Science and Technology Department
The joint ventures are FOCAL, TELEQ, VFT, NEC: new years of operation
The return on equity is negative, the joint venture is at a loss, however the loss is less each year than the previous year and the company has profits, proving that the development trend of the production and business activities of the joint ventures is becoming more and more effective.
The fact is that most of the products of joint ventures are consumed on VNPT's network (over 95%), so if the two indicators: return on equity and revenue are higher, the network will suffer more losses. On the other hand, VNPT has to share profits with foreign partners according to the capital contribution ratio. Therefore, VNPT will gain an advantage if the joint ventures only maintain a reasonable level of profit, reduce product prices to reduce the burden on VNPT's network.
In the period 1993-1998, joint ventures with foreign universities brought VNPT more than 3.5 million USD in profits, mainly contributed by the VINA - DEASUNG joint venture company. VNPT decided to invest all profits shared from the VINA - DEASUNG joint venture from 1993-1996 to reinvest and expand the joint venture (about 2.7 million USD). The profit shared in 1995 by the VKX joint venture (about 210,000 USD) was decided by VNPT to contribute capital to supplement the land area that was lacking when contributing capital. All profits
The shares from other joint ventures VNPT still leaves in the joint venture.
Up to now, the university has 4 joint ventures exporting products to countries in the region with a total value of: 9,176,561 USD. Exported products include: Switchboard hardware and software, fiber optic cables, copper cables.
Some companies conduct market research and introduce products to other countries to gradually create a foundation for exporting their products.
BCC projects
BCC projects have very different characteristics, depending on the nature of the service product, the scale and scope of the project network implementation. BCC projects that form a separate service network and establish a project implementation company such as BCC - VMS, BCC messaging MCC... then the results obtained after deducting the general costs of the project implementation company will be divided among the parties according to the ratio specified in the operation. As for BCC projects that implement investment and business on a number of available university networks such as the BCC - VTI project and local BCC projects,
The project's results will be divided directly among the parties and the parties will self-account for income and expenditure.
The above different business characteristics and profit sharing accounting make determining the financial performance of BCCs different and very difficult.
- Financial efficiency of BCC messaging, yellow pages, phone cards;
+ Total revenue of the projects reached about 240 billion VND
+ Total net profit of the projects (after deducting general expenses) reached about 65 billion VND.
In general, the projects have reasonable revenue compared to the investment scale and business market. The two projects of text messaging and yellow pages have moderate profits, the project
The card phone project is not suitable for the needs and business conditions of Vietnam today.
- Financial efficiency of BCC - VMS and BCC - VTI projects:
+ BCC - VTI project (up to the end of 2002). Total revenue of the project is 2,589 million USD. Revenue shared by VNPT: 1,944 million USD
VNPT's IRR is quite high at 266.73% compared to Telstra's IRR of 24.11%.
+ BCC - VMS project (expected by the end of 2004): Total revenue of the project is 500 million USD
It is expected that by the end of 2004, the portion VNPT will receive (after deducting the general expenses of VMS Company) will be: 293 million USD.
VNPT's IRR was calculated to be 85.9% and CIV's partner's was 22.7%. However, in October 2000, it was found that the partner's IRR did not reach 22.7%. VNPT
The university proposed that the competent authorities readjust the profit sharing ratio so that the partner's IRR would reach 24%. In return, the partner would increase its investment capital beyond the capital committed in the original contract of 75 million USD to develop network capacity and improve service quality. The IRR of VMS/VNPT reached 103.8% after adjustment and after the contract ended (June 2005), VMS/VNPT expected to have total revenue of 535.69 million USD, an increase of 197 million USD compared to the original business plan and would receive all assets and technology worth 202.8 million USD.
including the value of investment assets under the original contract of 127.8 million USD and the value of investment assets expanded beyond the original contract of 75 million USD.
In general, the BCC - VTI and BCC - VMS projects have brought high business efficiency to VNPT, especially the BCC - VTI project. This result allows VNPT to regulate revenue to support products that are still of public interest and serve such as post or telephone in remote areas. The foreign currency earned from the BCC - VTI project is also quite large, facilitating VNPT to borrow and repay the loan, maintaining VNPT's investment scale at a high level continuously for many years.
- Financial performance of local BCC projects
Because these projects are all in the investment phase or have just finished investing, it is not possible to accurately assess the effectiveness of these projects at this time. However, after a period of project implementation, the parties have actual data and have noticed many changes that have greatly affected the effectiveness of these BCC projects, specifically as follows:
+ VND/USD exchange rate: Changed from 11,000VND/1USD (1997) to 14,500VND/1USD (2000).
+ Service traffic decreased by 40 - 50% compared to the contract's expectation
+ The demand for subscriber growth in the next 5 years up to this point is only 50 - 60% compared to the initial forecast of the projects.
+ Prices of telecommunication services tend to decrease
+ The emergence of new operators, participating in providing telecommunications services and the emergence of value-added services such as VoIP phone, Internet... will directly affect the revenue of traditional voice services.
+ Due to the rapid development of technology, the initial investment cost for a subscription has decreased from 1000 USD to 750 USD/subscriber.
The adjusted data shows that the actual investment capital and revenue needs of the project area are only 60% of the level forecasted by the university in the contract (except for the contract with Korea Telecom, where the university has ended its investment). The BCC projects in Hanoi and Ho Chi Minh City are not able to disburse all the committed investment capital. If they are fully disbursed, the network capacity will be much more than the demand. The financial efficiency of the projects will likely be lower than the initial target.
149
Table 2.28 Revenue of BCC projects in the period 1990-2004
Project
Province edge | Speed | |||||||||||||||
Thousand USD | 1990 | 1991 | 1992 | 1993 | 1994 | 1995 | 1996 | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | |
BCC- texting | 725 | 34 | 149 | 186 | 191 | 612 | 1236 | 1257 | 1169 | 1022 | ||||||
Phone card Sapura | 3571 | 66 | 413 | 656 | 537 | 409 | 289 | 287 | 297 | |||||||
Page Yellow | 820 | 2063 | 1846 | 1,533 | 1303 | 1267 | ||||||||||
BCC - VTI | 237150 | 2729 | 16376 | 51480 | 89875 | 164141 | 244634 | 331994 | 373049 | 371573 | 324671 | 481907 | 72500 | 64000 | ||
BCC - VMS | 142800 | 15842 | 34318 | 55542 | 63166 | 72716 | 101188 | 72458 | 44320 | 40790 | ||||||
BCC - KT | 40000 | 505 | 929 | 8,700 | 11660 | 11300 | 10760 | |||||||||
BCC - NTTV | 194400 | 703 | 6900 | 13500 | 16000 | 19000 | ||||||||||
BCC - FCRV | 467000 | 3900 | 25350 | 25800 | 30360 | 31990 | 35240 | |||||||||
Total | 809356 | 2763 | 16525 | 51666 | 90066 | 164819 | 246283 | 351812 | 410919 | 430079 | 393834 | 583159 | 215385 | 191978 | 103610 | 105790 |
Source VNPT
General situation of BCC projects within the province as of December 31, 2003:
- BCC with KT international group
+ Total investment capital of 40 million USD, completed in 2001.
+ IRR from 12% to 20%, VNPT revenue sharing ratio 62%, KT 38%. If at the end of the contract IRR is not guaranteed, liquidate the contract at a price so that IRR = IRR min = 12%
+ Revenue basket to be divided includes: Installation fee of 136,600 new subscribers;
The total number of subscribers to calculate the maximum revenue is 198,200 subscribers; Total revenue is based on local, long-distance, and inter-provincial fares.
In 2003, the university divided revenue with the partner. According to the contract, the partner's expected IRR was 4.42%, much lower than the min IRR = 12%.
- BCC with NTT
+ Total capital invested by NTT according to the contract is 194.4 million USD - Currently, the ability to implement is 92 million USD.
+ Target IRR 18%; IRR min =12%; IRR Max =24%.
+ Revenue sharing ratio: VNPT 53%; NTT 47%.
+ Revenue basket to be divided includes: Installation fee ( 1 million VND) for (maximum 240,000) new subscribers in the project area; 100% of revenue according to subscription fees and
Local calls from subscribers in the project area; 40% of revenue by rate
Outbound long distance (including 40% of the mobile fee for the part enjoyed by the province); 16% of the outbound international fee; Inbound international revenue from 15 cents to 27 cents (depending on the specific period); The portion enjoyed by the local area for the local channel, for other telecommunications services, the revenue for the local area to be collected from other telecommunications operators.
+ Currently the partner's investment capital has not been confirmed definitively, so this is
It is difficult to calculate IRR. Currently, the options are calculated based on the capital of 92 million USD. In 2003, the university paid revenue to the partner, and if calculating IRR according to the provisions of the contract, the IRR of the project is 7.4%.
- BCC with FCR
+ FCR's total contract capital is 467 million USD to install 540,000
New lines and number of subscribers in the project area do not exceed 620,000 units (feasibility is 178.2 million USD).
+ Target IRR 18%, IRR min = 11%, IRR Max = 25%.
+ At the beginning of the year (Wednesday, Wednesday, and December), review business results to adjust the business plan to ensure IRR is within the range of min and max.
+ In 2003, the university divided revenue with partners and if calculating IRR as per regulations
The IRR specified in the contract is 17.79%.
2.3. Assessment of ensuring Vietnam's interests in attracting foreign direct investment at VNPT
2.3.1. Benefits achieved in the projects
Political economic significance of FDI projects
FDI projects began to be signed and implemented in the late 80s, when Vietnam was still under the US embargo. At that time, BCC was the solution to help Vietnam break this embargo. Especially BCC with Telstra ( c ), the project not only achieved very high financial efficiency but also helped VNPT reach out to the international telecommunications market, promptly meeting the needs of international communication, contributing significantly to the implementation of the innovation and opening policy of the Vietnamese government. BCCs at this time not only helped VNPT attract a large amount of investment capital and modern technological equipment but also maintained
sovereignty of Vietnam but has the commercial rights to deploy services right on VNPT's network. Along with implementing projects with partners who are "giants" in the world's telecommunications field, VNPT has affirmed itself in cooperative relationships, thereby promoting its name and image in the international market, creating favorable conditions for Vietnamese telecommunications enterprises to expand into foreign markets in the future.
The BCC form, at present, is no longer suitable, the BCC mechanism has greatly limited the scope and effectiveness of investment in telecommunications, especially in terms of the right to participate in management and operation, and the property rights of investors. Those limitations will make it difficult for Vietnam to attract foreign investment in large and important projects in the future, investors are waiting to switch to other models such as joint ventures or joint stock companies. Although
Although in BCC projects, foreign partners only participate as technology partners and do not participate in operations, 15 years of implementing university BCCs has become invaluable experience for the Vietnamese telecommunications industry in
BTA negotiations and bilateral negotiations to join the WTO.
Investment attraction performance
The total investment capital of FDI projects accounted for about 25.5% of the total investment capital of VNPT in the period 1996-2000 (about 18% in the period 1990-2001). It can be said that FDI capital plays a very important role in the development process of VNPT. Mobilizing a relatively large amount of FDI capital is one of the remarkable results in FDI activities of VNPT in recent times.
Fluctuations in FDI investment capital and VNPT's investment capital structure during the period 1991-2001 are shown in Table 2.29.
Partners in BCC projects committed to investing a huge amount of over 1 billion USD in VNPT's telecommunications network, but in reality the university disbursed
62% commitment. This investment capital volume basically meets VNPT's investment capital needs to develop a number of important telecommunications fields.
Data in Table 2.29 shows that : VNPT's investment increased rapidly in the period 1991-2001, but annual investment was not stable but focused on a few years with large values such as: investment in 1995 reached 1,029 billion VND (increased by 291%), in 2000 reached 1,021 billion VND (increased by 163%); meanwhile: in 1996 reached 279 billion VND (decreased by 73%), in 2001 reached 749 billion VND (decreased by 38%).
What is more noteworthy is that all the university projects were implemented and brought certain results, but only one contract was stopped right from the start of the project, which was the contract with Cable & Wireless of the UK due to difficulties on the partner's side. FDI investment
implemented immediately after the project is licensed.
Results of technology transfer activities
In recent times, the technology of manufacturing and trading BCVT products and services has made great strides, new technologies are continuously emerging with distinct advantages. It can be said that thanks to FDI, VNPT University has quickly approached
modern technologies, improving the capacity of the network. The transferred technologies are all advanced technologies equivalent to the level of countries in the region, specifically: