Decision No. 2129/QD-TTg dated December 29, 2017 on approval for plan to restructure Vietnam Posts and Telecommunications Group during 2018 - 2020

DECISION

ON APPROVAL FOR PLAN TO RESTRUCTURE VIETNAM POSTS AND TELECOMMUNICATIONS GROUP DURING 2018 - 2020

THE PRIME MINISTER

Pursuant to the Law on Government Organization dated June 19, 2015;

Pursuant to Government’s Decree No. 25/2016/ND-CP dated April 06, 2016 on Charter for organizational structure and operation of the Vietnam Posts and Telecommunications Group;

Pursuant to the Decision No. 58/2016/QD-TTg dated December 28, 2016 of the Prime Minister on criteria for classification of wholly state-owned enterprises, partially state-owned enterprises and list of state-owned enterprises undergoing restructuring in 2016 - 2020;

Pursuant to the Decision No. 707/QD-TTg dated May 25, 2017 of the Prime Minister on approval for the Project on “restructuring of State-owned enterprises, particularly state-owned economic groups and corporations during 2016 - 2020”;

At the request of the Minister of Information and Communications and Council Member of the Vietnam Posts and Telecommunications Group,

DECIDES:

Article 1. The plan to restructure Vietnam Posts and Telecommunications Group during 2018 - 2020 is approved. To be specific:

I. OBJECTIVES

- Develop the Vietnam Posts and Telecommunications Group (VNPT) into a strong, dynamic, efficient and modern state-owned economic group that can reach a high level of competitiveness in both domestic and foreign markets; well perform public duties; contribute to the socio-economic development and national defense and security assurance; play a key role in developing Vietnam's telecommunications and information technology in a quick, sustainable and competitive manner, and promoting international integration.

- Restructure VNPT to develop it into a leading digital service provider in Vietnam and a digital hub in Southeast Asia and Asia. Gradually switch over from traditional telecommunication services to telecommunications, information technology and digital services according to the VNPT development strategy during 2017 - 2025.

- By 2020, achieve the average annual revenue growth of over 6.5% and average annual profit growth of over 10.8%; during 2021 - 2025, achieve the average annual revenue growth of over 7.7 % and average annual profit growth of over 11%. By 2022, the return on equity is to be equal that of other enterprises in the same business line.

II. CONTENTS

1. Business lines

a) Main business lines

- Telecommunications, information technology, multimedia and other digital products and services.

- Consulting, survey, design, installation, use, maintenance, repair, lease of telecommunications works and equipment, and information technology products.

- Research into, development, manufacturing, trading in, export and import of telecommunications, information technology and multimedia equipment and products.

b) Relevant business lines in direct service of main business lines:

- Financial investment in telecommunications, information technology, multimedia and other digital services.

- Advertising, market research, organization of conferences, seminars and exhibitions related to the main business lines; improvement and provision of human resources for telecommunications, information technology, multimedia and other digital services.

- Lease of existing buildings and land of VNPT.

2. The plan to restructure VNPT during 2018 - 2020

a) Establish VNPT - Information Technology Company (VNPT-IT), a financially dependent unit of the parent company - VNPT by restructuring departments and units responsible for management, manufacturing and sale of information technology products and services of VNPT and Telecommunications Service Corporation (VNPT-Vinaphone) in order to optimize human resources and avoid overlapping issues.

b) Merge the VNPT Hospital of Nursing - Rehabilitation (in Hai Phong city) with the Hospital of Post and Telecommunications (in Hanoi city). Exercise autonomy over the Hospital of Post and Telecommunications (after merger) and General Hospital of Post and Telecommunications (in Ho Chi Minh city) in accordance with regulations of the Government’s Decree No. 16/2015/ND-CP dated February 14, 2015 on exercise of autonomy by public service providers.

c) Restructure international trading by VNPT International (VNPT - I) as follows:

- Assign tasks and personnel of VNPT International (VNPT-I) for operation of satellites Vinasat 1 and Vinasat 2 to the Network Infrastructure Corporation (VNPT-Net).

-  Convert VNPT International (VNPT-IT) (remained after merger) into a financially dependent unit to VNPT-Vinaphone for provision of international telecommunications services and satellite services.

d) Consider establishing VNPT Global Investment Single-Member Limited Liability Company (VNPT Global) 100% of charter capital of which is held by VNPT if conditions for investment in international markets are met and the Parent Company - VNPT is equitized; ensure effectiveness, conservation and development of state capital.

dd) Keep developing VNPT-Vinaphone into a financially autonomous unit. During equitization, accounting mechanism of VNPT-Vinaphone shall be applied to ensure effectiveness and prevent loss of state capital in enterprises.

e) Improve effectiveness and restructure the enterprises having VNPT’s stakes. To be specific:

- Transfer VNPT’s stakes in the enterprises, including (1) VMG Media Joint Stock Company (VMG); (2) VNPT Electronic Payment Joint Stock Company (VNPT EPAY), (3) National Payment Corporation of Vietnam (Napas), (4) E-learning and E-entertainment Service Development Joint Stock Company (VDC-Net2E), (5) Smart Media Joint Stock Company (SMJ) to the VNPT Media Corporation (VNPT-Media) to form units responsible for research into, development and provision of digital, value-added and media services and products.

- Transfer VNPT’s stakes in the enterprises, including (1) VNPT Global Hong Kong Company Limited (VNPT G HK); (2) ACASIA-Malaysia company (ACASIA); (3) ATH-Malaysia Company (ATH); (4) Stream Net Joint Venture (Myanmar) to the VNPT Global (after establishment) to manage foreign investment and develop VNPT’s telecommunications and information technology services and products in foreign markets.

- Merge Post and Telecommunications Material Supply Joint Stock Company (Potmasco) into Cokyvina Joint Stock Company according to regulations.

- Merge KASATI Joint Stock Company into Joint Stock Company for Telecoms and Informatics (CT-IN) and increase the ratio of VNPT’s stakes in CT-IN to over 35% of the charter capital according to regulations.

g) Dissolve VNPT’s representative office in Ho Chi Minh city according to regulations.

3. Keeping the roadmap for capital divestment according to the Appendix enclosed herewith.

4. Organizational structure of VNPT after restructuring:

a) Parent Company - VNPT which is a wholly state-owned single-member limited liability company.

b) Financially dependent units:

- Network Infrastructure Corporation (VNPT-Net).

- VNPT Information Technology Company (VNPT-IT).

- 63 Telecom provinces (VNPT- Provinces and cities)

- Center for Development Research (VNPT - RD).

- VNPT Training Center I, II, III.

c) Service providers:

- Hospital of Post and Telecommunications.

- General Hospital of Post and Telecommunications.

d) Subsidiaries:

- Telecommunications Service Corporation (VNPT - VinaPhone).

- VNPT Media Corporation (VNPT Media).

- VNPT Global, the establishment of which will be considered after the Parent Company - VNPT is equitized.

- Post and Telecommunications Industrial Technology Joint Stock Company (VNPT-Technology).

- Joint Stock Company for Telecoms and Informatics (CT-IN).

- Post and Telecommunications Equipment Joint Stock Company (POSTEF).

- VNPT Global Hong Kong Company Limited, whose capital is expected to be transferred to VNPT Global after establishment.

dd) Associate companies:

- COKYVINA Joint Stock Company

- Technology and Media Investment Development Joint Stock Company (VNTT)

- VNPT Property and Management Joint Stock Company (VNPT PMC)

- Vietnam Telephone Directory and Yellow Pages Joint Stock Company (VNYP)

- Post and Telecommunications and Printing Joint StocK Company (PTP)

- Technology and Media Investment – Development Joint Stock Company (NEO)

- Global Data Service Joint Stock Company (GDS)

- ATH Malaysia Company, whose capital is expected to be transferred to VNPT Global after establishment.

- ACASIA-Malaysia Company, whose capital is expected to be transferred to VNPT Global after establishment.

5. Keeping taking measures for improvement of enterprise management, particularly:

a) Improving management mechanism;

b) Consolidating organizational structure;

c) Innovating and improving financial management and accounting works; managing assets and sources of funding; balancing cash flow. Practicing thrift, closely managing expenses, reducing prices of products and services;

d) Managing and employing workers in an effective manner; reforming pay policies; training and improving quality of human resources;

dd) Applying modern technology to improve effectiveness of VNPT’s business operation and productivity;

e) Managing investment projects to ensure their progress and effectiveness; carry out overall assessment of business and outward investment plans to ensure effectiveness and conservation of state capital in enterprises. Urgent actions against weak and unprofitable projects and enterprises under the management of VNPT shall be taken.

g) Carrying out internal inspections and supervision; preventing corruption and waste.

6. Completed equitization of Parent Company - VNPT in 2019 in accordance with regulations of the Prime Minister’s Official Dispatch No. 991/TTg-DMDN dated July 10, 2017.

III. IMPLEMENTATION

1. The Ministry of Information and Communications shall provide guidance on, supervise and inspect the implementation of this Decision; submit quarterly reports to the Prime Minister; take charge and cooperate with relevant authorities in approving or requesting the competent authority to approve the restructuring plan at the request of VNPT and promptly resolving doubts that arise or inform the Prime Minister of the issues that are beyond its power.

2. The Ministry of Finance, Ministry of Planning and Investment, Ministry of Home Affairs, Ministry of Labor, War Invalids and Social Affairs shall, within their power, cooperate with the Ministry of Information and Communications in performing the tasks specified in Clause 1, Section III of this Article.

3. According to the objectives specified in Section I of this Article, the Member Council of VNPT shall:

a) disseminate viewpoints, objectives and contents of the restructuring plan to achieve a high level of consensus during the implementation to affiliates, officials and employees of VNPT.

b) restructure affiliates as prescribed in Clause 2, Section II of this Article within its power;

c) divest capital as prescribed in Clause 3, Section II of this Article.

d) improve the management capability, effective operation and enterprise value as prescribed in Clause 5, Section II of this Article.

dd) equitize the Parent Company - VNPT as prescribed in Clause 6, Section II of this Article. During equitization, submit the VNPT-Vinaphone's accounting mechanism to the Ministry of Information and Communications, which will submit it to the Prime Minister for decision to ensure effectiveness and prevent loss of state capital in enterprises.

e) After the equitization of the Parent Company - VNPT, formulate a plan for establishment of VNPT Global 100% of charter capital of which is held by VNPT by prudently making outward investment projects to ensure effectiveness and conservation of state capital in enterprises, and submit the plan to the competent authority.

g) submit quarterly reports on implementation of the abovementioned plan to the Ministry of Information and Communications, Ministry of Finance and Steering Committee for Enterprise Innovation and Development.

Article 2. This Decision comes into force from the day on which it is signed.

Article 3. The Ministry of Information and Communications, Ministry of Finance, Ministry of Planning and Investment, Ministry of Home Affairs, Ministry of Labor, War Invalids and Social Affairs, head of the Steering Committee for Enterprise Innovation and Development and the Member Council of VNPT are responsible for the implementation of this Decision./.

APPENDIX

CAPITAL DIVESTMENT PLAN DURING 2018 - 2020
(Enclosed with the Decision No. 2129/QD-TTg dated December 29, 2017)