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Vietnam Becomes Telecom Hotbed

Light Reading
News Analysis
Light Reading

Carriers are ramping up activity in Vietnam, one of the fastest growing emerging markets, as the country's telecom subscriber base continues to soar and the government prepares to auction 3G licenses. Here's some of the news coming out of Vietnam this week:

  • The Vietnamese Ministry of Information and Communications (MIC) released telecom subscriber figures this week for the first half of the year. With a population of 86 million, Vietnam had a total of 61.8 million fixed-line and mobile subscribers at the end of June, up 15 million from the end of 2007. Vietnam ranked seventh in mobile subscriber growth among emerging markets last year. (See Top 10 Emerging Mobile Markets 2007.)

    State-owned Vietnam Posts and Telecommunications Corp. reported revenues of VND22.2 trillion ($1.29 billion). The country has 5.8 million Internet subscribers, of which 1.6 million use broadband services.

  • Russian operator Vimpel-Communications (NYSE: VIP) is moving ahead in its joint venture agreement with the Vietnamese government. It will acquire a 40 percent stake in a company to be called GTEL Mobile for $267 million, which will become Vietnam's seventh mobile operator. (See Vimpelcom Ventures Into Vietnam.)

    Discussions began in September last week, when Vimpelcom said it intends to invest $1 billion in the GSM operator. (See VimpelCom Forms Vietnam JV.)

    The government is finalizing the details of GTEL's license, which will allow it to offer mobile, fixed-line, broadband, VOIP, and WiMax services.

  • Incumbent VNPT is making its first international foray, forming a 50:50 joint venture with wholesale service provider ETN Singapore to set up a mobile virtual network operator (MVNO) targeted at expatriates across the Asia/Pacific region. The carriers plan to invest S$1 billion in VNPT-GS, which will be headquarted in Singapore, offering services to wholesale customers over the next few weeks and retail customers within three months.

  • On the domestic front, the MIC says it will send out invitations to operators later this month for an auction of four 3G licenses, with bidding scheduled to be open for two months. Foreign operators will be able to participate if they team up with local operators. VNPT's mobile unit VinaPhone has indicated it's working with Japan's NTT DoCoMo Inc. (NYSE: DCM) on its bid, while other potential partnerships include Orange (NYSE: FTE) and MobiFone , and Singapore Telecommunications Ltd. (SingTel) (OTC: SGTJY) and S-Fone .

    The Vietnamese government is also setting up a Public Telecom Fund of VND1 trillion ($58 million) to expand telecom coverage in rural and mountainous areas. According to a local media report, VNPT, Viettel Telecom, EVN Telecom, and SPT have been selected to provide fixed-line coverage in 254 communities without telecom services, extend public Internet service to 30 percent of the 2,000 communities that lack access, and upgrade 600 public Internet facilities from dial-up to broadband.

  • IPVG Corp. , an IT services firm based in the Philippines, has signed a strategic partnership agreement with Vietnamese data services and BPO firm CMC Telecommunications Services Corp. to provide corporate services in Vietnam. The partnership is targeting three areas: business process outsourcing (BPO), bandwidth and International Private Leased Circuits (IPLC), and security services, specifically denial-of-service mitigation.

    "Vietnam is a key component of our regional expansion and our relationship with CMC Telecom gives us access to providing cutting-edge solutions to the growing Vietnamese economy and foreign enterprises that do business there," Enrique Y. Gonzalez, IPVG's CEO, said in a statement.

    — Nicole Willing, Reporter, Light Reading

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