SK Telecom to lose rights to coveted bandwidth

October 06, 2016 | 15:22

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The 850 MHz bandwidth in possession of long-defunct mobile network operator S-Fone , a joint venture between South Korean telecommunications company SK Telecom and Vietnamese Saigon Postel Corp. (SPT), may soon be repossessed by the Vietnamese government.

According to the Department of Telecommunication under the Ministry of Information and Communications (MIC), SPT’s licence for the S-Fone project has expired.

The ministry is likely to issue an official notice on the revocation of the licence soon. With this revocation, the ministry is going to take back the 850MHz bandwidth to write up a tender for interested mobile operators.

Four years after it stopped operation, S-Fone’s sole remaining valuable asset is the 850 MHz bandwidth that the MIC allotted to the company at the time of its operation. At the moment, the bandwidth lies unutilised, as no move has been made to dissolve the company. The bandwidth could be valuable to other telecom companies in the deployment of their 3G and 4G networks.

S-Fone was founded in 2001 under a business co-operation contract (BCC) between SK Telecom and SPT, with the initial capital of $230 million. It was the first operator to use the CDMA 2000-1x EV-DO technology and to provide 3G in Vietnam.

In the early days, S-Fone seemed to be on the rise. In May 2007, the partners announced a new $543-million infrastructural investment. By 2008, S-Fone had 3.1 million subscribers.

Then GSM started to replace CDMA networks all over the world, including in Vietnam. S-Fone rapidly lost subscribers who went over to operators using GSM technology, like VinaPhone, MobiFone, and Viettel.

At the end of 2009, SK Telecom announced that it would stop investing in S-Fone, citing lower-than-anticipated profits and subscriber growth. However, the company did not withdraw from the partnership. Later in the year, S-Fone changed the partnership model from BCC to joint venture, with SPT holding the majority stake.

By 2011, as the number of subscribers and revenue continued dwindling, the company scaled down services to only Hanoi, Haiphong, Danang, and Ho Chi Minh City.

In July 2012, S-Fone broke its employment contracts and closed all shops and the website. At the end of 2012, the company leadership confirmed that S-Fone company was insolvent. From then on, no move has been made to dissolve the company.

In 2014, SPT’s general director Hoang Sy Hoa said that the network infrastructure was asset of SK Telecom and that SPT was negotiating to dissolve the company, however, no further information was forthcoming ever since.