Vietnam Business Channel

Vietnam’s national broadcaster VTV wants to divest in K+ operator VSTV

Vietnam’s Deputy Prime Minister Vuong Dinh Hue and other members of the government are deciding whether Vietnam Television (VTV)’s can move forward and divest from loss-making Vietnam Satellite Digital Television Company (VSTV), the service provider of Pay-TV Kplus (K+).

VSTV is a joint venture between the French cable television channel Canal+ and VTV. Officials of the government and VTV have said that the divestment process should be carried out in a cautious manner and on the basis of Vietnamese laws. Accordingly, Deputy PM Hue has requested the Ministry of Information and Communications to work with the Ministry of Justice to review the legal documents related to VSTV’s charter and its establishment, so that the divestment would ensure the legal rights of VTV and Canal+.

The Deputy PM has also instructed VTV to let the State Audit Office of Vietnam (SAV) clarify VSTV’s business and financial conditions. A normal, yearly financial report on VSTV’s business performance for 2018 is now being prepared by VSTV and will be submitted to the prime minister by the end of January.

Since the third quarter of 2015, VTV has wanted to divest from three Pay-TV service providers – Saigontourist Cable Television Company (SCTV), Vietnam Cable Television (VTVcab), and VSTV. Under it’s divestment plan, VTV would sell a major proportion of its shareholding in VSTV and SCTV as well as its 49% stake in VTVcab.

Established in 2009, VTV currently holds 51% stake in VSTV while French media conglomerate Canal+ holds a 49% stake. Since K+ began operations, it has sustained major financial losses.

In 2015, K+ posted revenue of $53.81 million USD and a loss of $3.83 million USD. K+ losses have continued, in 2016 it posted losses of $12.95 million USD and in 2017 the company posted another loss of $19.28 million USD.

K+ holds the full broadcast rights of the English Premier League (EPL) and Spanish Football League (La Liga) in Vietnam but while these are among the most sought-after broadcasting licenses, the company has not been able to fully monetize them.

K+’s long-term viability also was questioned when it was announced last July that Facebook has paid $264 million USD for the broadcast rights to stream all 380 Premier League soccer matches per season from 2019 to 2022 in Cambodia, Laos, Thailand, and Vietnam. Media analysts predict that K+ will sustain further losses as viewers switch from watching sports matches on television sets and switch to digital smartphone viewing instead.