Russian mobile network to invest $1bil in Vietnam

Vimpelcom, the second-largest provider of mobile services in Russia, has stated that it will establish GTel Mobile and invest $1 billion in Vietnam in the next several years to provide technology to develop GSM-based mobile network in the country.

According to the company’s official website, in connection with the visit of the Vietnamese Prime Minister to Russia, Vimpelcom signed a principal agreement to establish a mobile telecommunications joint venture in Vietnam under the name of GTel Mobile.

Vimpelcom reveals that the other participants in the joint venture will be a company owned by the Ministry of Public Security of Vietnam and The Millennium Global Solutions Group, Inc., a US company.

The principal agreement states that VimpelCom will invest up to $1 billion over the next several years in the development of a GSM mobile network and provide technical and operational expertise to the joint venture. In accordance with Vietnamese investment laws, VimpelCom will own a minority voting stake in the joint venture. However, the principal agreement says that VimpelCom will hold a majority of the economic interest in the joint venture and will exercise significant influence over the joint venture’s operations.

“We are very excited about this transaction, our first expansion outside of Russia and the CIS. Vietnam is a very attractive market, with a growing population of approximately 85 million people and mobile penetration of approximately 32%. The country has joined the WTO and the economy is developing rapidly. Overall we view this as a great growth opportunity for VimpelCom and its shareholders,” said Alexander Izosimov, CEO of VimpelCom.

The establishment of the joint venture and the terms being discussed by the parties remain subject to negotiation and execution of final joint venture documents, receipt of regulatory approvals (including licenses and frequencies) and corporate approvals of the parties.

The VimpelCom Group includes cellular companies operating in Russia, Kazakhstan, Ukraine, Uzbekistan and Tajikistan, and recently acquired companies in Georgia and Armenia.

VimpelCom is recognised for introducing two digital cellular communications standards in Russia. It built the first dual band GSM-900/1800 cellular network in Russia and leads the development and emergence of the mass consumer market for wireless telecommunications in Russia with prepaid products.

The VimpelCom Group's cellular licence portfolio covers a territory with a population of about 240 million. Geographically it covers 76 regions of Russia with 139 million people, representing 95% of Russia's population as well as the entire territories of Kazakhstan, Ukraine, Uzbekistan, Tajikistan, Georgia and Armenia.

As of March 31, 2007, VimpelCom's total number of subscribers in Russia and the CIS was 56.8 million (45.8 million of them are active, including 38.6 million in Russia, 3.5 million in Kazakhstan and 2.0 million in Ukraine).

VimpelCom was the first Russian company to list its shares on the New York Stock Exchange (NYSE) in November 1996. Its ADSs (American Depositary Shares) are traded under the symbol "VIP".

Source: http://english.vietnamnet.vn/tech/2007/09/740575/