Foreign investors head off equitisation of telecom firms

VNStockNews.com - Vietnam's mobile service and telecom market is creating more investment opportunities for foreign investors especially after 3G technology based services were licensed and some telecom firms are in the process of preparing equitisation, citing the latest report of UK Business Monitor International (BMI) on Vietnam's telecommunication market in Q3 of 2009.

BMI said, the equitisation of telecom firms will boost the telecom sector to develop quickly in next year and the pioneer is MobiFone.

Accordingly, MobiFone will sell 30% of stake to foreign investors, followed by other firms VinaPhone, EVN Telecom, Viettel and Saigon Postel.

Although the equitisation of telecom sector is later than foreigners' expectation, BMI said big investors namely Belgium's Telenor, UK Vodafone, Japan's DoCoMo and France Telecom are still patiently waiting for the long term investment opportunities in Vietnam.

In line with Vietnam's WTO commitments, after three years from joining WTO, foreign telecom businesses will be allowed to set up subsidiaries in Vietnam and supply telecom services. So BMI forecasts that in the next five years, Vietnam will become an attractive destination for foreign telecom investors.

However, BMI said, Vietnamese telecom market still contains many adequacies like ARPU (average revenue per user) reaching only $6, the lowest level in Asia. Vietnam now has over 100 million subscribers including 11 million pre-paid subscribers, meaning that the volume of imaginary subscribers accounts for up to 90 percent.

3G services will be launched within this year, but the demand of using 3G services will not be high because of high cost for services and equipments. BMI predicted that the number of 3G subscribers will achieve 4.5 million only in next five years.