Vodafone looks to Vietnam

9 Jul 2007

Fresh from its USD10.9 billion takeover of Indian cellco Hutchison Essar, UK-based Vodafone Group is now said to be preparing to break into Vietnam, according to a report in the UK press. Vodafone has opened a representative office in Hanoi in recent weeks, ahead of an expected privatisation programme overseen by Vietnam’s communist government. Sources close to Vodafone said that the company’s interest in Vietnam was at an early stage but that it was positioning itself in readiness to secure partnership agreements and, ultimately, significant stakes in at least one of the government-owned companies. First in line for the Ministry of Post and Telematics (MPT)’s privatisation programme are likely to be VinaFone and MobiFone, two of the country’s biggest mobile companies, both run by government-owned Vietnam Post and Telecoms (VNPT). The Vietnamese government is already engaged in a programme of privatising state-owned assets, which include banks and other financial services firms, retailers and utilities. The country was granted membership of the World Trade Organisation (WTO) in January this year, which brought with it obligations to open the telecoms market up to overseas investment, and the MPT is planning that by late 2008 or early 2009 foreign companies will be allowed to enter joint ventures with domestic partners, and after 2010 wholly-owned foreign ventures will be permitted to set up in the mobile market. Aside from Vodafone many foreign companies have expressed interest in staking a claim in the burgeoning mobile sector. France Télécom, Norway’s Telenor, Japan’s DoCoMo, and French-US vendor Alcatel-Lucent have all opened representative offices in Vietnam in readiness for the inevitable scramble to buy when the market is opened up.

Vodafone declined to comment on any prospective deals in Vietnam.