Vietnam's first CDMA network awaits approval

The Vietnamese government has approved in principle a plan to build a US$230 million CDMA (code division multiple access) mobile phone network, but the structure of the deal is yet to be finalized, the government announced Tuesday.

A business cooperation contract to build and operate the network was signed last December between local company Saigon Post and Telecommunications Joint Stock Co. (Saigon Postel) and its partners, a South Korean consortium called SLD Telecom, majority-owned by SK Telecom Co. Ltd. with stakes held by LG Electronics Inc. and Dongah Elecomm Corp.

Under that contract, SLD Telecom was to retain 75 percent of the revenue for the first seven years of the 15-year contract as a return for funding network construction. Under the new arrangement, which the government has sent back to the Ministry of Planning and Investment for examination and approval, the two sides will now share the revenue equally, according to a government statement.

The deal was approved last year by the country's telecommunication regulator, Department General of Posts and Telecommunications (DGPT), but has run into fierce opposition from the state telecommunications monopoly Vietnam Posts & Telecommunications Corp. (VNPT), which runs two nationwide GSM (Global System for Mobile Communications) networks.

Earlier this year, VNPT Chairman Do Trung Ta wrote an open letter to the government saying that VNPT had the experience, finance and technical abilities to satisfy all foreseeable demand for mobile phone services and that open-door telecommunication policies should be carefully structured to help local firms operate more effectively and competitively.

VNPT's two GSM networks, Vinaphone and Mobiphone, have a combined subscriber base of around 850,000, according to VNPT figures, with subscriber growth last year of around 80 percent. The CDMA network has been designed to have a capacity of 1 million subscribers.

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