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The Vietnam News

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Vimpelcom to invest as much as $1 billion in Vietnam

MOSCOW - Vimpelcom, the No. 2 mobile phone operator in Russia, after Mobile TeleSystems, will invest as much as $1 billion in a mobile services venture in Vietnam that could become the center of its Asian operations, its chief executive said Wednesday.

"Vietnam is a very attractive market with a growing population of approximately 85 million people and mobile penetration of approximately 32 percent," the chief executive, Alexander Izosimov, said. Vimpelcom said its investment in a global system for mobile communications based in Vietnam would be made over the next few years. Izosimov said he hoped the joint venture, to be called GTel Mobile, could be established within the next several months. Vimpelcom said its partners would be a company owned by the Ministry of Public Security of Vietnam and U.S. Millennium Global Solutions Group. "I can't disclose details but can say that everything has been undertaken to allow us to get a considerable minority stake," Izosimov said. "I think it will be more than a blocking stake."

Under Vietnamese law, Vimpelcom would only hold minority voting rights in the venture, but under the deal the Russian company will be entitled to the majority of profits. Vimpelcom, which operates under the Beeline brand, is 44 percent controlled by Altimo, the telecommunications arm of Alfa Group. Telenor of Norway owns 29.9 percent of the company. Vimpelcom has repeatedly said it is interested in acquiring foreign assets that could lead to the creation of "geographical clusters," rather than buying separate telecom companies. "It is natural that Vietnam is an organizing market," Izosimov said. "At a later stage it will be easier to join neighboring smaller markets to a structure which will be created."

In August, Altimo acquired 90 percent of the Cambodian mobile operator Sotelco. Analysts said Altimo might sell Sotelco to Vimpelcom, but Izosimov played down the speculation. "Nobody has ever offered us to buy Sotelco," he said. The Vietnamese venture will be the first move by a Russian telecommunications company outside the 12 former Soviet countries known as the Commonwealth of Independent States. Vimpelcom operates in seven of those countries, including Russia, Ukraine and Kazakhstan, but is looking to diversify at a time when those markets are close to saturation.

Altimo's Kyrgyz unit for sale

Altimo, the telecommunications unit of the Russian billionaire Mikhail Fridman, is auctioning its Kyrgyz phone company amid a dispute over ownership of the asset, Bloomberg News reported from Moscow. Mobile TeleSystems, or MTS, the largest Russian mobile phone company, has been invited by Morgan Stanley to bid for the Kyrgyz unit, Sky Mobile, an MTS spokeswoman, Yelena Kokhanovskaya, said.

Reuters - September 12, 2007.