K+ is a joint venture between VTV and French communications group CanalPlus. The channel recorded accumulated losses worth nearly VND 2 trillion (US$85 million) according to a recent VTV report on their use of state budget to the government.
Most of VTV's USD86 million investment, accounting for 77% of the channels total capital in K+ were from bank loans so they have been spending over VND100 billion a year on interest, VTV said in the report explaining their losses in the channel in which they hold a 51% stake.
Despite remarkable growth in the number of subscribers, from some 95,000 in 2009 to 800,000 by 2015; and annual revenues sharply increasing from VND160 billion to VND1.269 trillion during these six years, VTV still managed to lose VND1.979 trillion (US$85.1 million) by 2015.
VTV’s poor business strategy has been blamed for losing market share to competitors. "We have lost market share to many other competitors like Viettel, MobiFone, FPT due to keeping our prices unchanged for a long time," VTV claimed in the report.
VTV also complained about ‘unfair competition’ in the local market and decreasing demand for paid TV services due to the economic downturn which had also badly affected their revenue.
Although VTV has proposed some solutions to improve the situation this year, it still predicts losses of over VND 260 billion in 2016 and VND120 billion in 2017.
If all the solutions do not work this year, the state broadcaster will propose divesting from K+, the report said.