FPT’s Top 10 Activities in 2006

With net revenues estimated at around VND11,639 billion ($730 million), FPT reached 99.69% of its 2006 targets, growing at 42.40% compared to 2005.

Worth particular mention in the 2006 business results was the high profit growth, which exceeded plans. FPT pre-tax profits reached VND609 billion, an increase of 77% over the previous year and representing 110% of the target. The parent company’s after-tax profit also increased 60%, achieving 109% of that targeted. Profit growth was many times higher than the revenue growth rate.

However, the most outstanding feature was the important shift in the structure of revenue between software services and hardware. Although hardware revenue increased at a high level of growth, at 38.5% over 2005, software services revenue growth stood at 84.41%; double the hardware revenue growth. This made the portion of FPT’s software services revenue increase 8.5% over 2005, to 11% of total revenue in 2006.

The following are the financial results and targets (not audited).

Regarding personnel, FPT staff numbers at the end of 2006 were 7,008, an increase of 2,059 (41.6%) over the previous year, and was in direct proportion to the company’s turnover.

With the results seen in 2006, FPT hopes to continue maintaining high growth rates and efficiency in 2007, reaching its strategic targets during globalization .

Below are some of FPT’s activities in 2006:

1. Prime Minister assigns FPT to develop Hoa Lac Hi-tech Zone

In August 2006 the government officially assigned the development of infrastructure at the Hoa Lac Hi-tech Zone to FPT Corporation, in accordance with CV No. 1310/TTg-KG. FPT is also the development investor of a software zone and the FPT University at the site.

With these projects, FPT confirmed software development as the company’s key business, with a view to driving its own development, contributing to shaping and developing a new industry in Vietnam and training a global-standard software workforce.

The Hoa Lac Hi-tech Zone has a total projected area of 1650 ha and was approved by the government in 1998. The zone’s goal is to provide the necessary physical base and human resources to support hi-tech prodution and research and deployment activities, contributing to pushing up national industrialization and modernization and shaping the country’s intellectual economy.

2. FPT lists on Vietnam’s stock market

On 13 December 2006, FPT officially joined the stock market at the Ho Chi Minh City Securities Trading Center. FPT is therefore the first ICT company in the country to join the stock market, and has the stock code “FPT”. In just the first session, FPT’s matching order price was 40 times higher than its nominal value. After a month the stock’s value remained among the highest, enabling it to become one of the blue chip stocks in Vietnam.

When it joined the stock market, FPT’s chartered capital was more than VND608 billion. Of this, 7.3% belonged to the state, 66.64% belonged to company shareholders, and 26.06% belonged to external parties (including 12.21% belonging to foreign parties). During the past 18 years, FPT’s turnover consistently increased at an average of 40% per year. In the last three years (2003, 2004, and 2005) its business activities recorded subtantial growth, consolidating trust among investors.

FPT joining the stock market was greatly appreciated by investors. They also viewed it as a significant step by FPT in proving itself not only in the national but also the international information technology market, contributing to attracting foreign investment into Vietnam, especially in technology companies.

3. FPT University receives permission to open and officially enroll first course

In September 2006 the Prime Minister officially issued Decision No. 208/2006/QD-TTg, granting permission to FPT to establish the FPT University. Under the decision, the university will be the first to be founded by an information technology enterprise in Vietnam, with a view to training an information technology workforce not only for the FPT Corporation but also for the country. In November 2006, the Ministry of Education and Training permitted the organization of enrollments for 2006. On 13 January 2007, 300 students in Course 1, majoring in the software industry – of which 43% received scholarships and credits - entered the university.

The difference between FPT’s training program and that of others lies in determining future work and reality, developing individuals’ professional abilities, and developing the necessary skills for students to satisfy and adjust themselves to any social and technology change. Above all, students attending FPT University will have the chance to work and learn in an international-standard environment.

The university’s initial facilities can train 900 students. By September 2008 it will open its headquarters at the Hoa Lac Hi-tech Zone and cater to 5,000 students.

4. FPT receives financial investment from two strategic foreign partners - TPG and Intel Capital

On October 24 FPT received $36.5 million in investment from two strategic foreign partners – the Texas Pacific Group (TPG) and Intel Capital, an investment organization under the Intel Corporation.

The event was evidence of the belief among world-leading financial corporations in the future of Vietnam. With the financial ability of these two companies and their expericence in the global market, FPT aims to develop new services. Thanks to it being a pioneer in exporting software to Japan, FPT also reinforces its ability to supply new products and services to regional and international markets. Vivek, a strategic member of TPG, will be Senior Strategy Consultant for FPT. With its experience and ability in technology, Vivek will contribute to FPT aiming at global targets.

5. FPT Telecom receives license to supply fixed phone services

In December 2006, the Ministry of Post and Telematics granted License No. 1136/GP-BBCVT for “nationwide fixed telecommunications network and service establishment and supply” to FPT Telecom. With the license, FPT will supply fixed phone services based on the new generation network (NGN) technology, with Softswitch switchboard technology. Customers will be able to enjoy the “Triple Play – 3 in 1” service package, which includes high band Internet, fixed phone and IP television services, which is cheaper and more effective that buying these services independently from different providers.

As planned, by June 2007 FPT Telecom will have 100,000 fixed phone subscribers and 250,000 by the end of 2007. FPT Telecom expects to deploy the service in ten cities and provinces this year.

6. FPT becomes sole holder of FIFA World Cup 2006 TV rights

On 17 February 2006, FPT anounced it had become the sole television broadcaster of the FIFA World Cup 2006 . The company saw securing TV and radio broadcast rights as a positive step in its total development strategy. Upon securing the rights, FPT officially took its first steps into the content industry as an enterprise understanding and fully respecting international laws and conventions.

This was also the first time in Vietnam that an IT company obtained exclusive rights to conduct live broadcasts of events within the framework of the FIFA World Cup 2006 – the biggest sporting event in the world. With the TV rights, FPT is entitled to broadcast signals for all kinds of TV: broadcast TV, cable TV, and digital TV. It was also entitled to distribute the rights to live broadcast 64 matches of the FIFA World Cup on Vietnam’s radio network.

By co-operating with VTV, HTV, VTC and Voice of Vietnam radio, FPT provided Vietnamese footbal fans with a feast of football, summary sportscasts, and information on the World Cup.

7. Strategic cooperation with Microsoft

In Hanoi in April 2006, shortly after the Chairman of Microsoft, Mr Bill Gates, visited Vietnam, Microsoft and FPT released the minutes of a meeting regarding strategic cooperation.

In October 2006 FPT became the first IT enterprise to sign a contract to use genuine Microsoft software. This was an important advance in cooperative relations between Microsoft and FPT, confirming FPT’s desire to abide by international laws and conventions on copyright during Vietnam’s global integration.

In November 2006 the two corporations signed a three-year agreement, with a view to creating a benchmark for enterprises in Vietnam and the Asia Pacific region. The strategic alliance expanded the scope of cooperation contained in the minutes from April. FPT will apply Microsoft Windows Server 2003 for its mainframe system or its previous mid-range systems ( one of the focus areas will be addressing the significant opportunity to migrate proprietary enterprise infrastructure, for e.g. migration from mainframes or mid-range systems to the Microsoft Windows Server 2003 family .) The two sides also set up a Microsoft Capacity Center (MCC), focusing on net technology, Microsoft Dynamics and other Information Worker Collaborative Technologies. The signing ceremony for the contract was witnessed by Mr. Craig Mundie, Strategy and Technology Director of Microsoft, who flew to Vietnam to attend in the APEC meetings.

8. FPT becomes IBM subcontractor to carry out the “Budget and Treasury Management Infomation System” project

In March 2006, IBM and FPT signed a contract to carry out the project to build the “Budget and Treasury Management Infomation System” for the Ministry of Finance. The $10 million subcontract is the biggest seen in Vietnam to date. IBM selected FPT as the subcontractor to carry out the TABMIS program, aimed at improving Vietnam’s financial management systems.

9. FPT joins in HCM city’s hitech zone

FPT corporation has just officially got the investment license for the project “FPT’s center of information technology and computer science researching and software production” in HCM city’s hitech zone. The project has an area of 20,000m2. As scheduled this will be an ideal working environment for FPT’s staff, computer programmers in order to carry out these tasks: researching and supplying information technology, telecommunications and internet methods and services; researching system integration methods; researching and producing software for exporting purposes. Total investment for the project is estimated about VND 576 billion.

In the early 2006, FPT held a design competition for the building, which gathered many initiatives and contributions of Vietnamese and foreign companies and specialists. The first prize was awarded to A.T.A Co,.Ltd. At present, FPT is improving the project’s detail drawing in order to begin construction around midyear 2007.

The project “FPT’s center of information technology and computer science researching and software production” is an assertion of FPT’s heading toward software industry as a key business so as to impulse FPT’s development and contribute into the formation and developing of a hitech industry in Vietnam in general and in HCM city in particular.

10. FPT Software gets CMMi5 certificate

May 2006, FPT Software gets CMMi5 certificate. This event has put FPT in the list, among about 150 companies and organizations all over the world recognized by America ’s Software Engineering Institue as the best system of software production process in the mature model of software production capacity.

In the process of carrying out the project CMMi, level 5, FPT got some remarkable amelimorations on process and software products’ quality. Specifically, from 2001-2005, the number of on-time products increased 28% and the mistake number also decreased 40%. With certificate of CMMI level 5, FPT Software continues affirming its engagement to supply customers with quality-increasingly-improved software services, meeting and satisfying customers’ needs and requirements as well as redefining FPT software’ rank of quality organization in the world’s software exporting market.