Giant telco group sets up shop

“For the time being, we are not looking for a new investment licence,” said Arve Johansen, senior executive vice president and chief executive officer of Telenor Mobile.
“We are here to familiarise ourselves with the local environment and find partners who are already established in the market.”
Johansen said the Norwegian firm had a broad range of offers for both existing and new mobile operators in the Vietnamese market, including marketing and technical services.
“We think we have a lot to contribute to local partners,” he said.
He said Vietnam’s rapid development, and government moves towards
liberalising the telecom sector, where mobile phone penetration currently reaches just 5 per cent, had impressed and encouraged Telenor.
“We believe that mobile penetration in Vietnam is still quite low and we expect strong growth in the years to come,” said Johansen.
“Given our experiences in other developing countries, the mobile service market in Vietnam will grow even beyond our expectations.”
In 1997, Telenor entered Bangladesh, one of the 12 countries where the company is “active”. It took the service provider six years to sign up its first one million subscribers.
However, it took Telenor just one year for the next million, and during the following six months its client base increased rapidly to three million.
Telenor has also been involved in three other Southeast and South Asian countries, namely Thailand, Singapore and Pakistan with the second being home to its regional office managing operations across all of Asia.
In Europe, besides having a strong presence in Scandinavian countries, Telenor also has operations in vast markets like the Ukraine and Russia.
The Russian market alone, where the operator holds a 29 per cent stake in VimelCom, claims almost 30 million subscribers out of Telenor’s total clients of more than 60 million worldwide.
“We have a blend of experiences in both matured and emerging countries and we would like to share these experiences, as well as our knowledge, with Vietnamese mobile operators,” Johansen said.
He explained that from an investor’s point of view, it is not easy to obtain approval to launch mobile phone operations in Vietnam, and so far Telenor has not developed plans to apply for an investment licence.
Nevertheless, with more investors entering the market, the ongoing equitisation of companies, and the listing of mobile phone operators on the stockmarket, “we are convinced that an opening will arise for a partner like us,” Johansen said.
In other markets, Telenor mostly began operations with a joint venture and in some cases, including Hungary and Montenegro, the firm bought up whole ventures.
Vietnam currently has six licensed mobile phone operators, with only four providing services based on 2-2.5G technology.
The market is currently dominated by the state-owned Vietnam Post and Telecommunications Corporation (VNPT) with its subsidiary Vietnam Telecom Services Company (GPC), which runs the Vinaphone network.
VNPT is also involved in a business cooperation contract (BCC) with the Swedish company, Comvik International Vietnam AB, which operates the MobiFone network.
The BCC will terminate in May and is expected to be followed by the equitisation of VMS, the local partner, following approval from Prime Minister Phan Van Khai last month.
The two other operating networks include S-Fone, a BCC between Saigon Post and Telecommunication Corp (SPT) and South Korean consortium SLD Telecom, and Viettel, which is run by the Military Electronics and Telecommunications Shareholding Company (Vietel).
S-Fone is the only operating CDMA-based network while the others use the global system of mobile communications (GSM) technology.
Earlier this year, the government awarded an investment licence to the biggest ground mobile telecommunications investment in Vietnam – the $656.9-million CDMA2000 Ground Mobile Telecommunications Network BCC.
The BCC was formed between Hanoi Telecom, a local shareholding company, and the Luxembourg-registered Hutchison Telecommunication (Vietnam), and is expected to launch services early next year.