Vietnam to privatize telecom groups next year
HANOI - Vietnam, one of the world's fastest growing telecom markets, expects to privatize its three major telecoms next year with the government keeping the majority of the stakes, officials said.
State-owned Vinaphone, MobiFone and the army's Viettel said earlier this year they would open their mobile activities to the public without providing any firm calendar dates.
"We plan to equitize them next year, according to a program approved by the government in 2005," said Nguyen Khac Lap, office manager of Vietnam Posts and Telecommunications Ministry.
"We have set no specific date for each company. There are a lots of things to do before the plan is achieved," he said.
The country is considered one of the fastest growing telecoms market in the world. There are about 13 million mobile phone subscribers in the country of more than 84 million people.
There were only 1.6 million in 2002. The statistics department of the state-owned giant Vietnam Posts and Telecommunications Corp (VNPT) estimates the figure will grow by 55 to 60 percent between 2005 and 2006.
Vinaphone and MobiFone, both subsidiaries of VNPT, currently lead the market.
But the Vietnam Military Electronics and Telecommunications Co. has won widespread praise for its dynamic approach to business since it started operations in late 2004.
Several foreign groups have shown interests in the sector including France Telecom, Swedish Comvik and Norwegian Telenor.
Vietnamese banks, investment funds and other local private companies have also followed the process closely, observers said.
But major details remain to be settled. The government has not yet decided on the size of a maximum stake foreign investors can acquire.
"We advised authorities to choose one strategic partner for each company, someone that would invest and bring methods, technology and know-how," an industry insider said, asking not to be named.
"In a second phase, they could also list the group at the stock exchange and open it to other smaller investors."
"The privatisation will be a long and progressive process," he added saying the 2007 target was not impossible but might prove difficult to reach.
Vietnam's telecom sector has experienced major changes over recent years and will face further pressure once Vietnam joins the World Trade Organization (WTO).
Until December 2002, Vinaphone and MobiFone had enjoyed a duopoly.
S-Fone, a network owned by South Korean consortium SLD Telecom -- a Singapore-registered joint venture between SK Telecom, LG Electronics and Dong Ah Elecomm -- started operation in 2003, a year and a half before Viettel.
Privatisation of the sector has been fiercely negotiated with foreign countries, especially the United States, and is part of Vietnam's commitments to join WTO.
"The integration of the equitised companies would lower the state's investment burden, sharing the costs among investors," said the English-language daily Vietnam News, citing the deputy minister of posts and telecommunications, Tran Duc Lai.
Internet and the landlines network will remain entirely controlled by the Vietnamese state.
Agence France Presse - October 12, 2006.
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