Small mobile network providers such as EVN Telecom and S-Fone have recently found it hard to seek strategic investors.
Insiders say, because the Vietnamese market is at a saturation point in attracting new subscribers with the domination of the three "big guys" VinaPhone, MobiFone and Viettel, only a small piece of the market cake has been left for small providers. Another reason is that the investors have seen the difficulties in reviving small mobile networks such as S-Fone and EVNTelecom.
In the case of S-Fone or S-Telecom, the first CDMA mobile phone service provider in Vietnam, although it already has approval for changing its business model into a joint venture, no investors have shown interest.
S-Fone was established on the basis of capital contribution from Saigon Post and Telecommunication Services Joint Stock Co (SPT) and Korean SK Telecom. But
at present, SK Telecom has withdrawn capital in the joint venture by transferring its 12 percent holdings to the SPT.
SK Telecom, the mobile network provider which accounts for 50 percent of total market share in the Republic of Korea, acknowledged its failure to cooperate with S-Fone in the Vietnamese market because of the strong competition from domestic rivals, according to Korean telecommunication experts in an article from the Korea Times earlier last year.
"S-Fone is still looking for potential investors, both foreign and domestic, who show true interest in doing business with the network provider," a public relations officer at S-Fone said.
"Whether S-Fone will continue its policy on pursuing CDMA (Code Division Multiple Access), which was considered failing in Vietnam or not is dependent on the investor who will acquire its share. So S-Fone will firstly maintain its policy," an anonymous manager of the corporation said. Foreign investors have already witnessed the failure of HT Mobile, another domestic CDMA network provider.
As for EVN Telecom, an affiliate of Electricity of Vietnam, the domestic investor Financing and Promoting Technology Corporation (FPT) has cancelled its decision of purchasing up to a 60 percent stake of EVN Telecom, even though it has already deposited over 700 billion VND (33.6 million USD) for this trade deal.
EVN Telecom has recently sought governmental approval for a plan to offer a 12 percent stake to the Vietnam Multimedia Corporation (VTC), according to a source from Investment News.
"Seeking a strategic investor was very important. It would help a small network provider like EVN Telecom expand market share, taking full advantage of partners to promote our business", Nguyen Truong Giang, manager of public relations at EVN Telecom, said.
"EVN Telecom has submitted to the Government its equitisation plan for approval to prepare for its finding a strategic investor"
Industry insiders said EVN Telecom wanted to retain its policy of selling shares to domestic strategic investors while foreign-invested telecos including Hong Kong-invested Vietnamobile, the Republic of Korea's S-Fone, and Russian-invested Beeline had struggled to make a dent in the market share of major domestic rivals like Viettel, MobiFone and Vinaphone.
"The small mobile network providers not only need to find a suitable strategic partner, but also develop their own business strategy," Ha Noi Telecom Corporation's General Director Trinh Minh Chau said./.
Insiders say, because the Vietnamese market is at a saturation point in attracting new subscribers with the domination of the three "big guys" VinaPhone, MobiFone and Viettel, only a small piece of the market cake has been left for small providers. Another reason is that the investors have seen the difficulties in reviving small mobile networks such as S-Fone and EVNTelecom.
In the case of S-Fone or S-Telecom, the first CDMA mobile phone service provider in Vietnam, although it already has approval for changing its business model into a joint venture, no investors have shown interest.
S-Fone was established on the basis of capital contribution from Saigon Post and Telecommunication Services Joint Stock Co (SPT) and Korean SK Telecom. But
at present, SK Telecom has withdrawn capital in the joint venture by transferring its 12 percent holdings to the SPT.
SK Telecom, the mobile network provider which accounts for 50 percent of total market share in the Republic of Korea, acknowledged its failure to cooperate with S-Fone in the Vietnamese market because of the strong competition from domestic rivals, according to Korean telecommunication experts in an article from the Korea Times earlier last year.
"S-Fone is still looking for potential investors, both foreign and domestic, who show true interest in doing business with the network provider," a public relations officer at S-Fone said.
"Whether S-Fone will continue its policy on pursuing CDMA (Code Division Multiple Access), which was considered failing in Vietnam or not is dependent on the investor who will acquire its share. So S-Fone will firstly maintain its policy," an anonymous manager of the corporation said. Foreign investors have already witnessed the failure of HT Mobile, another domestic CDMA network provider.
As for EVN Telecom, an affiliate of Electricity of Vietnam, the domestic investor Financing and Promoting Technology Corporation (FPT) has cancelled its decision of purchasing up to a 60 percent stake of EVN Telecom, even though it has already deposited over 700 billion VND (33.6 million USD) for this trade deal.
EVN Telecom has recently sought governmental approval for a plan to offer a 12 percent stake to the Vietnam Multimedia Corporation (VTC), according to a source from Investment News.
"Seeking a strategic investor was very important. It would help a small network provider like EVN Telecom expand market share, taking full advantage of partners to promote our business", Nguyen Truong Giang, manager of public relations at EVN Telecom, said.
"EVN Telecom has submitted to the Government its equitisation plan for approval to prepare for its finding a strategic investor"
Industry insiders said EVN Telecom wanted to retain its policy of selling shares to domestic strategic investors while foreign-invested telecos including Hong Kong-invested Vietnamobile, the Republic of Korea's S-Fone, and Russian-invested Beeline had struggled to make a dent in the market share of major domestic rivals like Viettel, MobiFone and Vinaphone.
"The small mobile network providers not only need to find a suitable strategic partner, but also develop their own business strategy," Ha Noi Telecom Corporation's General Director Trinh Minh Chau said./.
