Foreign investment focuses on wideband Internet services

According to the statistics mentioned in white book of Ministry of Information and Communication, the market shares of three foreign-invested network providers of S-Fone, Vietnamobile and Beeline accounted for nearly 10 percent. Ho Hong Son, general director of Saigon Post and Telecommunication Services Joint Stock Co, the manager and operator of S-Fone network said that the operation of this network was not as good as expected because of the narrow door the company had to go through in this sector.

The difficulty in operation was one of the main reasons explaining for the fact that the foreign investors showed less interest in mobile network operation in Vietnam at present. S-Fone and SK Telecom has lately withdrawn capital from S-Fone via transforming the operation method from business cooperation contract (BCC) to joint venture one.

One of the investors in BCC with Vietnamobile, Hutchison hasn’t released any announcement about continuing to pour investment capital in this network, after its cooperation with partners to tap $600 million from changing technologies from CDMA to GSM. Moreover, Vietnamobile hasn’t launched 3G services as committed previously.

Beeline, the first joint venture in mobile network services between VimpelCom, a leading international provider of telecommunications services and Vietnam’s Gtel Mobile Co, at the time of officially starting operation in Vietnam, planned to invest about $1 billion within the period of 5-7 years.
However, at present, Beeline has faced with financial difficulty because of high operation costs.

The leaders of ministry of information and communication said that at present, the foreign investors showed less interest in setting up joint ventures in telecommunication sector in Vietnam. Instead, they turned their attention in the new investment field of wide-band Internet.

Recently, the first joint venture in the field of wide-band mobile Internet was established between Vietnam Post and Telecommunication Group (VNPT) and Russia-based Altech Group under the name of RusViet Telecom (RVT). The joint venture will operate under the joint stock firm model with minimum capital contribution rate from VNPT of 51 percent of the registered capital to be applied for a telecommunication infrastructure provider of 1.6 trillion dong.

Vu Hoang Lien, director of Vietnam Data Communication Company (VDC), holding 70 percent of Internet market shares in Vietnam said that there would be may opportunities for foreign investors to make investment in this wide-band internet sector in Vietnam. – Dau tu

Tags: wideband Internet services