HCM City authorities have submitted to the Government a plan to turn the sometimes strained seven year-old relationship between SK Telecom and Saigon Postel into a joint venture.

A Korean mobile phone provider, SK Telecom, and Saigon Postel Corporation joined hands in 2003 to develop the S-Fone mobile network, now the fourth largest network in Vietnam. It relies on CDMA technology.

In May 2007, the two sides announced to raise investment capital in S-Fone to $543 million. However, by August 2009, there were strong rumors of trouble between the partners, and SK Telecom stated it would stop investing in S-Fone.

A few months later, SK Telecom and Saigon Postel agreed to turn their business cooperation model into a formal joint venture. Saigon Postel also committed to make investments that would enable S-Fone to double its coverage in 2010.

Ho Hong Son, S-Fone managing director, refused to disclose the percentage of shares that SK Telecom will hold in the joint venture. However, he confirmed that SK Telecom will be the junior partner. Saigon Postel is now in charge of managing and investing in S-Fone.

Son also refused to comment on the rumor that a Korean firm, Rutter Associates, has purchased S-Fone shares worth 1.6 trillion dong ($84.2 million).

S-Fone currently has more than seven million mobile phone subscribers, trailing far behind industry leaders Viettel, Vinaphone and Mobiphone. Son says that under the joint venture plan, the firm will have more discretion to decide financial and business strategies to develop S-Fone.

The Ministry of Information and Communications has reported that at the end of April 2010 Vietnam had over 120 million mobile users.

Experts expect to see mergers in Vietnam’s telecom market. Ericsson Vietnam General Director Eddie Ahman predicts that several of the nation’s seven providers will have to merge or cooperate with each other. Actually, EVN Telecom and Vietnamobile have already joined hands to get a 3G licence.

Source: Dau Tu