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VIETNAM
Investment/Telecoms
July 16, 2007


Foreign giants go into aggressive mode
World's leading telecommunications firms have opened representative offices in Vietnam in a move to seek investment opportunities with domestic service providers, local newspaper Vietnam News reported July 16.

Vietnam is home to six telecommunications service providers, three of which, VinaPhone and MobiFone operated by the state-owned Vietnam Posts and Telecommunications Group (VNPT) and the military-owned Vietnam, are being most aggressively courted by foreign firms. The three local providers have recently announced plans to sell shares to international partners.

France Telecom, Europe's second leading cellular service provider with 88 million mobile users and 11 million Internet subscribers in 220 countries and territories, has said it intends to be a major player as it looks to aggressively expand its presence in Asia.

Norway's Telenor, the top telecommunications supplier in northern Europe, also laid out its long-term investment plans in Vietnam. It, currently having over 40 million customers in Asia, has recently poured additional 350 million U.S. dollars into its operations in the continent.

Other heavyweights, including the United Kingdom-based Vodafone and France-based Lucent, have opened offices in Vietnam, while seeking investment licenses enabling them to begin rolling out their country strategies.

Before Vietnam joined the World Trade Organization (WTO), foreign telecommunications companies had been restricted to business cooperation contracts with local partners. South Korea-invested SPhone is a player in the market following this model.

Now, foreign firms are permitted to hold up to 49 percent in a joint venture, giving them security and a major say in the management of the venture. WTO commitments will allow wholly foreign-owned entities to operate in the Vietnamese telecommunications field starting in 2010.

Vietnam witnessed over 11 million new phone subscribers in the first half of this year, posting a year-on-year surge of 258%, and raising the total phone subscriptions in the country to 38.8 million or 45.8 units per 100 residents. Up to 74% of the 38.8 million phone subscribers are mobile phone users, according to the Vietnamese Ministry of Posts and Telecommunications. Xinhua

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