SK Telecom confirms end to investment in S-Fone

4 Jan 2010

South Korean mobile operator SK Telecom has revealed it will halt investment in Vietnamese cellco S-Telecom, which operates under the banner S-Fone, citing low profits and subscription rates, The Korea Times reports. However, the company denied speculation that it had agreed with its partner in Vietnam, Saigon Post and Telecommunications (SPT), to abandon the S-Fone business cooperation project altogether. ‘We have not changed from our earlier stance on Vietnam. Our company will stop investment there,’ noted SK Telecom’s spokesperson Cindy Kang, confirming that the company had already scrapped its participation in the operation of third-generation mobile networks with SPT. However, S-Fone will be changed to a joint venture between the two telecoms firms; S-Fone was awarded a network operator’s licence in 2001 following the signing of a 15-year business cooperation contract (BCC) between shareholders Saigon Postel, SK Telecom and LG Electronics the previous October. Officials say procedures for ending the BCC and inking a joint venture contract will be completed before applying for a licence for the latter. Media reports state that South Korea-based private equity fund Rutter Associates Korea is set to strike an MOU with SPT regarding the joint venture in the near future, claiming that the firm will become the second largest stakeholder in S-Fone by acquiring a 49% share.