To Revamp Telecom Cos To Form National Group-Official

HANOI -(Dow Jones)- Vietnam's Prime Minister Phan Van Khai has approved plans to form a national telecommunications holding company, following restructuring of major state-owned post and telecommunication firms in Vietnam, a government official said Friday.

The government's plans will include restructuring Vietnam Post & Telecommunications Corp., or VNPT, establishing new regional corporations, and selling shares in affiliate units, he said.

"We will need some months to come up with the details, but in principle, the state will only maintain control in limited areas, and we will offer investment opportunities to the public, including foreigners," the official with the Ministry of Planning & Investment, who did not want to be named, told Dow Jones Newswires.

"Vietnam is determined to integrate with the world economy and therefore we need to build a strong company which will be fully capable of meeting the domestic market's demand," he added.

Vietnam, with a population of 82 million people, is a booming market, as the telecom industry grew at more than 10% annually in the last few years, he noted.

Currently, VNPT has more than 10 million telephone subscribers, including 4.7 million mobile users, and controls more than 90% of the country's post and telecommunication market, which was estimated to be worth $2.1 billion in 2004.

VNPT is planning to invest $470 million this year and expects revenues to rise 10% this year to $2 billion.

A statement issued by the Ministry of Post & Telematics, or MPT, said various government organizations will work to come up with a framework by the end of the year for the new holding company, which will be responsible for investment in many affiliates.

Another official with the MPT said Vietnam's current law allows foreign investors to hold up to 49% in any telecommunication company in the country, as outlined in the Bilateral Trade Agreement that Vietnam signed with the U.S.

"We will gradually open the telecom market and foreign investors will have a fair chance to join in," he said.

Vietnam is targeting to become a member of the World Trade Organization by the end of this year, and the country is under pressure to open more key industries to foreign investors.

-By Nguyen Pham Muoi, Dow Jones Newswires; 844-825-0732; phammuoi.nguyen@dowjones.com

-Edited by Marissa Chew

(END) Dow Jones Newswires"

Posted to the site on 27th March 2005