Vimpelcom and Hutch pledge new investment in Vietnam

4 May 2011

Vietnam Business News reports that Hutchison Telecom (Vietnam) and Hanoi Telecom are teaming up to invest USD350 million in the network of Vietnamobile. The move raises the total investment capital for the cellco to over USD1 billion. According to a Hanoi Planning and Investment Department officer, ‘Hutchison Telecommunication and Hanoi Telecom are also asking to transform their current business cooperation contract (BCC) model into a joint venture form which will mean greater flexibility in management along with increasing their committed investment capital once their disbursement capital exceeds their committed capital.’

Meanwhile, Russian giant Vimpelcom, the foreign partner in a joint venture with local GTel Corporation, last week announced plans to spend USD304 million on GTel Mobile (Beeline), a Vietnamese cellco. ‘We look forward to re-launching our operations in Vietnam and to strengthening our position in the high-potential South East Asia cluster. We are confident that we will be able to develop our operations in Vietnam in close cooperation with our partner, GTel, while taking advantage of the scale and scope of the newly enlarged Vimpelcom group,’ said Alexey Blyumin, general director of GTel Mobile. Vimpelcom’s funding plan would increase its stake in the GTel Mobile joint venture from 49% to 65%. The additional financing and equity increase depend on GTel Mobile hitting certain performance targets and gaining further regulatory approval.

According to TeleGeography’s GlobalComms Database, at the end of 2010 Vietnamobile claimed 5.1% of the Vietnamese wireless subscriber market, while GTel Mobile accounted for just 2.2%.