Saigon Post and Telecommunication Service Joint Stock Corp (SPT), operator of CDMA network S-Fone, has finalized legal procedures to become Vietnam’s second mobile service joint venture.

The joint venture dossiers have been submitted to the Ho Chi Minh City’s Department of Planning and Investment.

SPT expects the joint venture license will be granted in June and business cooperation contract (BCC) with foreign partner South Korea SK Telecom will be liquidated in September. Once licensed, it will become second after Beeline, a 6-to-4 joint venture Global Telecommunications Corp (Gtel) under the Ministry of Public Security and Russian cellphone operator VimpelCom.

SKT invested $US218 million in S-Fone in 2006 while the investment lifespan of BBC will last until 2016.

But then SKT announced to stop increasing its investment, which was expected to reach $500 million. SPT’s investment in S-Fone has been $US13 million so far.

On August 9 the government allowed S-Fone to divert into a joint venture from a business cooperation contract, becoming the second mobile service joint venture in Vietnam.

Local partner SPT will hold an 80 percent stake, with the remainder held by SK Telecom, and SPT will buy back the foreign stake within two years.

Under Saigon Postel’s annual report in 2010, S-Fone had a capital of $US229 million, of which VND238.1 billion ($US12.9 million) was contributed by SPT.

SPT reported revenue of VND696.2 billion ($US33.6 million) in 2010, a year-on-year decrease of 18 percent. It is aiming to earn VND748 billion and VND7.3 billion in revenue and pre-tax profit respectively this year.

Sai Gon Telecommunications Technology Joint Stock Company (SaigonTel) became the biggest shareholder last month with a 30 percent stake in SPT (equaling to 35.98 million shares) with the price of over VND15,000 per share.

Source: Tuoi Tre