Vietnam - Dialing in telco survival plans

Small local telecom players have some tough calls to make.

S-Fone, a joint venture between Saigon Postel Corporation (SPT) and South Korea’s SK Telecom, came online in 2001 with an initial investment of $230 million and began offering CDMA mobile services in 2002.

In early 2007, it planned to expand business with a $300 million capital injection. However, the plan was later dropped. In early 2010, the South Korean partner aired its plan to withdraw from S-Fone. Its 20 per cent of stake is reportedly to be bought by SPT, the local joint venture partner.

According to an S-Fone executive, the network is actively sourcing strategic partners either local or foreign ones which have true designs to tie-up with S-Fone for further development.

“Whether S-Fone further applies the CDMA technology or not will have a final decision after we find a strategic partner. In the near term, we still maintain the CDMA technology,” said the executive.

According to Ministry of Information and Communications (MIC) figures, S-Fone subscribers fell to 1.8 million in late 2010 from 3.2 million in mid 2008.

In April 2011, telecom giant FPT decided not to hook into EVNTelecom as proposed though the group had advanced VND708 billion ($34.2 million) for the deal. Until present, the telecom group could not take back the deposit.

EVNTelecom is reportedly submitting its plan to the government to sell a 12 per cent stake tantamount to VND800 billion ($38.6 million) to multi-media firm VTC.

In January 1, 2011, the Vietnamese government ratified EVNTelecom’s equitising plan which regulates the EVN would hold 50.6 per cent of the chartered capital, the employees hold 0.4 per cent stake, while the remaining 49 per cent will be sold to strategic partners.

FPT, however, wanted to own a 60 per cent of stake, one of key reasons why it decided to stop the deal.

EVNTelecom’s current subscribers exceed 4.7 million, including fixed telephone lines. The player operates both CDMA and 3G networks. Its 3G network covers locations across the country but it just offers principal services in big cities including Ho Chi Minh City, Hanoi, Haiphong, Danang and Can Tho.

Beeline, a joint venture between GTEL Mobile and Russia-based VimpelCom, came online in late July 2009. The network subscribers mounted to around two million after eight months in operation.

However, its subscribers dropped to over 187,000 in late December 2010, according to MIC figures.

In May 2011 the Russian partner aired plan to inject additionally $500 million into Beeline with an aim of turning it into the fourth largest telecom player.

Duc Huy | vir.com.vn

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