South Korean partner may split from S-Fone

The South Korean partner of the S-Fone mobile network – SK Telecom – may withdraw its backing after nearly six years of operation in Vietnam.

A source from SK Telecom said the group is fulfilling necessary formalities and solving the remaining issues between it and the Saigon Post and Telecom JS Company otherwise known as Saigon Postel. After that SK Telecom will put an end to its investment in S-Fone to invest instead in real estate projects.

The source also said that SK Telecom would withdraw from Vietnam due to modest business results. In 2005, this group invested around $150 million in S-Fone but since then the network has rarely made a profit.

Since early 2009 it has been rumored that SK Telecom has been withdrawing its capital from S-Fone. In November 2009, S-Fone confirmed that the two sides had agreed to change the model of cooperation to a joint venture.

S-Fone’s executive manager Ho Hong Son told VNExpress that S-Fone would continue its operation whether the Korean partner withdraws its capital or not.

He said S-Fone would still have capital to maintain its operation saying they would release an official announcement about the situation early.

On January 9, S-Fone announced plans to have nearly 300 3G transceiver stations to increase its coverage to 14 provinces, with two more cities with 3G networks (Bien Hoa and Dong Nai).

This year S-Fone plans to upgrade its 3G-EVDO service in order to develop 3G services and the 4G service in the future.

The network now has 7.3 million subscribers but only 4.3 million are active. This is considered slow growth in the telecom market, which has boomed in recent years.

Tags: Sfone, Vietnam Telecom