Vietnam licenses US$230m phone project
HANOI - Saigon Post and Telecommunications (Saigon Postel) said on Friday it received a license
for a US$230 million project to develop Vietnam's third mobile telephone network with a
Singapore-based South Korean joint venture.
Trinh Dinh Khuong, Saigon Postel's general director, told Reuters he received the Planning and
Investment Ministry license on Tuesday for the 15-year project with SLD Telecom using Code
Division Multiple Access (CDMA) technology.
SLD Telecom is a joint venture between South Korea's SK Telecom, LG Electronics and Dong Ah
Elecomm.
Khuong said the foreign partners
would contribute US$219 million to
the project and Saigon Postel the
remainder. He said the partners
would establish an affiliate to launch
the network from mid-2002.
"We will open tenders (for
equipment) later this year and
installation will start from early next
year," Khuong said.
He said the system would be
installed in Vietnam's commercial
hub Ho Chi Minh City and capital
Hanoi next year, and would cover
most of the country by its third year
of operations.
The new system will challenge two
existing nationwide mobile phone networks, Vinaphone and VMS-Mobifone, controlled by Vietnam
Posts and Telecommunications Corp (VNPT). These use the Global System for Mobile
Communications (GSM) technology.
Saigon Postel was once wholly-owned by VNPT, which now holds 18 percent of the 87 percent state
stake in the firm.
Earlier this year, state media reported that VNPT had sought to prevent licensing of the SLD venture,
arguing it could satisfy demand alone and saying telecommunications were a national security
issue.
The Saigon Times Daily newspaper said the CDMA system would have a broader bandwidth than
existing GSM systems, allowing for quicker data transmission and Internet access using the
wireless application protocol (WAP).
Khuong said the CDMA project would face tough competition from Vinaphone and Mobifone.
"This will force us to do better in after-sales service, in reducing costs and providing better quality,"
he said.
One disadvantage was that the CDMA technology was not compatible with GSM handsets, he said.
"We will either import CDMA phones or set up assembly lines here to wrap CKD components," he
said.
Partners in the CDMA project have targeted 100,000 subscribers by the end of the first year of
operations and double the figure by the end of the third year. They forecast a rise to between
700,000 and one million by the 15th year.
The Saigon Times Daily said the Korean firm would transfer ownership, assets and technology to
Saigon Postel once the project period expired in 2016.
Currently there are 1.03 million subscribers to VNPT's Vinaphone and Mobifone networks. VNPT has
forecast its users to grow to 2.2 million by 2005.
Under a trade pact signed with the United States last July and expected to be ratified later this year,
Vietnam committed to gradually opening its telecoms market to joint venture services.
Reuters - September 21, 2001.
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