Six telecom service providers appear to be a target for many overseas businesspeople, paving the way for Vietnam's telecom industry to integrate into the world arena as Vietnam joins the World Trade Organization (WTO)
Having initiated a scheme to establish an economic group, the Vietnam Post and Telecommunications Corporation (VNPT) is preparing for the equitization of the its two largest mobile phone networks in Vietnam, VinaPhone and MobiFone.
Meanwhile, Saigon Postel has decided to invest US$40 million in expanding its coverage in an effort to have an additional new 500,000 subscribers this year. Another giant telecom provider Viettel has also poured an investment of US$50 million in construction and upgrading of its facilities with the aim of providing better services to its 1.1 million subscribers.
This year, EVN Telecom will put CDMA technology telephone service into trial operation nationwide. At present, the company is providing broadband Internet service on its current power line network. EVN Telecom plans to spend VND3,000 billion raising its subscribers to 2 million this year. The company has already installed a telecom system in Hanoi with 40 base transceiver stations (BTS) and 300 kilometers of fibre optic cables, capable of signing up 1.5 million subscribers.
This year, Vishipel plans to further provide radio communications services, including Coastal Information and Inmarsat, for shipping, fishing and maritime rescues, and offer Voice over Internet Protocol or VoIP 175 at the same time in order to become one of five leading telecom providers in Vietnam.
In the same move, Hanoi Telecom has joined hands with Hong Kong's Hutchison Telecommunications to invest US$655.9 million in the second CDMA 3G mobile phone network and targets to increase its share to 20 per cent of the domestic telecom market.
Although Vietnam has yet to become an official member of WTO, it has in fact for the last yeas been in good relation with various foreign partners to develop the local fixed telephone market such as Korea Telecom from South Korea, Nippon Telephone Telegraph from Japan, France Telecom, and Comvik of Sweden.
Despite the fact that it will be equitized next year, the Vietnam Mobile Telecommunications Services Company (VMS MobiFone) is still hot in the eyes of foreign investors. No matter what they cost, five telecom corporations of Swedish firm Comvik, Telenor of Norway, and France Telecom, are now eager to purchase VMS's stocks.
According to the director, VMS plans to complete all procedures to list on stock market late this year. The schedule has been, however, delayed for early next year. Property assessment is the biggest obstacle for the company to be equitized. VMS is Vietnam's second largest mobile telephone network provider after Vinaphone.
Late last year, apart from successfully ASEM 5 meeting and WTO access negotiation completion, Vietnam and EC signed an agreement on market access, setting up an important landmark for the bilateral cooperation between the two sides over the recent years. Priorities will be given to foreign companies including Comvik and Alcatel, allowing them to shift into other business models after ending its business cooperation contract (BCC) with Vietnam.
However, foreign investors such as Comvik are facing with several problems raised by Vietnamese partners. To cope with the situation, these investors are seeking to buy shares from domestic equitized telecom enterprises.
Regarding the situation, Post and Telematics Deputy Minister Mai Liem Truc said Vietnam always welcomes the participation of foreign investors into the telecom sector. However, there remain many differences in the transformation of business cooperation contract into joint venture entities. As being equitized, VMS is forced to follow all criteria set for a holding company. And the participation of Comvik, an experienced partner, is highly appreciated in the process of VMS's equitization and is equal in comparison with other investors.
At present, ten leading telecom providers in the province are intending to enter Vietnam market. Comvik is an obvious example which has enterprises well-valued and conducts several important development researches in Vietnam. The others are also experienced partners.
If Vietnam joins the WTO on schedule, the telecommunications industry will develop in a direction beneficial to both domestic and foreign investors. This shows that, in the eyes of foreign investors, Vietnam telecom market has much potential. Vietnamese enterprises are aware that WTO membership will open opportunities for them to test their mettle in the global market. As a result, many IT and telecommunications enterprises are urgently preparing, engaging in extensive investment and expansion.
In order to compete well with other foreign companies, Vietnamese enterprises should strengthen their status by capital accumulation, modern technology access, and quality improvement. To this end, domestic telecom enterprises are encouraged to be well-equipped with international trade agreements such as Bilateral Trade Agreement and soon collect telecom market information at the same time in order to satisfy investment demand of a wide range of foreign investors.
B.T
Vietnamese
