Swedish telecommunications group Comvik International has asked Vietnamese investment and planning ministry for permission to convert its business cooperation with local mobile operator into a joint venture, a report on Viet Nam News said.
At present, Comvik and Viet Nam Mobile Telecom Services Company (VMS) together operate ‘MobiFone’, a major mobile phone operator in Vietnam, under a 10-year, US$456-million business cooperation contract which is now in the final leg having two more years to run.
“This contract is not the ideal form for our group’s direct investment in Vietnam,” explained Simon Perkins, Comvik’s chief representative and chief executive officer for Vietnam.
“We have already asked the Government to consider joint venture status for us,” he added, but pointing out that the main question is whether the legal framework for the conversion exists by the time their contract ends in 2005.
“So we are actually happy to continue with the current contract and wait for the legal process to be in place,” Perkins added.
Under the agreement between Comvik and VMS, Comvik has invested in the local mobile network infrastructure, technology transfer and staff training. With Comvik’s support, VMS operates its mobile phone network in 61 cities and provinces in Vietnam that also connects to 95 networks worldwide. The network has by April this year registered over one million subscribers.
The partnership plans to introduce the General Packet Radio Service (GPRS) technology, which allows more advanced multimedia messaging, Internet and email access, to the fast-growing Vietnamese market in July.
According to Viet Nam News, some market watchers view the moves as desperation on the part of VMS in an effort to survive an increasingly competitive market.
Saigon Post and Telecom Service Company – under a 15-year, US$230-million business cooperation contract with South Korean consortium SLD Telecom – has debut its CDMA (Code Division Multiple Access) mobile phone service under the name ‘S fone’ early July. Ha Noi Telecom meanwhile plans a similar service by the end of this year.
