CDMA Network Launched in Vietnam
Published on: 14th Jul 2003
Note -- this news article is more than a year old.
SLD Telecom and Saigon Post Telecommunication Services Corp. (SPT) have launched a CDMA cellular service in Vietnam on the 1st of July. SLD Telecom is a joint venture company in which SK Telecom LG Electronics and Dongah Elecomm are major shareholders. SK telecom contributed 53.8% LG Electric 44% and Dong Ah Elecomm 2.2% of the investment in SLD Telecom. At present the company is capitalized at USD54 million.
SLD Telecom and SPT established 'S Telecom' (president: Trinh Dinh Khuong) to introduce CDMA cellular service in Vietnam. A Business Cooperation Contract (BCC) was signed in October of 2000, and a business license from the Vietnamese government was obtained in September 2001. With 2 years of preparation, S-Telecom, a joint venture company between SLD Telecom and SPT, is launching a commercial CDMA cellular service, with the brand name of 'S-Fone', in 13 major cities in Vietnam. This is to include Hochimin City and Hanoi.
Currently SLD Telecom has completed the network construction of a CDMA 2000-1x network in 13 major cities in both the north and south regions, including Hochimin, Hanoi, and Hiphong. Within 2 or 3 years, the company plans to build a CDMA network across the entire country.
The company's goal is to capture more than 15% of the cellular market in Vietnam, securing over 200 thousand new subscribers by the end of this year. Currently Miviphone and Binaphone, which are subsidiary companies of VNPT (a government-owned backbone network operator), provide GSM mobile phone services. The mobile phone service penetration ratio in Vietnam is a mere 3% of the total population.
This lags behind many other countries in Southeast Asia. As of June 2003, the total number of mobile phone users was about 2 million.
SLD Telecom sees bright prospects for the growth of the mobile communication business in Vietnam due to the fact that the country has a large population (80 million), and continues to record high economic growth. In particular, the growth rate in mobile phone service market has averaged 50% annually since the year 2000, which is the second highest growth rate in the world, and topped only by the growth rate of China. In this regard, advancing into the Vietnamese cellular service market at an early stage, has great significance.
In addition, starting the CDMA cellular service in Vietnam has a larger meaning for SK Telecom because it is actively pursuing a plan for building a single Asian CDMA belt that embraces and connects the Far Eastern countries (like Korea, China, and Japan), and the Indochina Peninsula (like Vietnam, Cambodia, Thailand, and Oceania). The CDMA cellular business in Vietnam will be a first step toward forming an all-Asian CDMA belt. This step will play a pivotal role in realizing this huge project in the future.
For the CDMA cellular service in Vietnam, SK Telecom will provide the technological expertise and know-how accumulated through the world's first commercialization it accomplished in Korea. At the same time, LG Electronics will supply the main system equipment, and Dong-Ah Elecomm will be responsible for furnishing electrical equipment and devices.
SLD Telecom has a 15 year license that expires in 2016."