S-Fone denies reports investor will pull out

S-Fone, Vietnam’s fourth-biggest mobile phone service provider, has shrugged off reports its Korean investor will withdraw its backing, saying the two parties are negotiating a new joint venture arrangement.

The Korean investor, SK Telecom, had made no announcement about withdrawing its financial support from the network, S-Fone Managing Director Ho Hong Son told Lao Dong (Labor) newspaper.

Earlier this month, Vietnamese newspapers reported SK Telecom planned to cease investing in S-Fone because of the slow subscription growth.

The reports triggered concerns among the network’s subscribers about the future of the S-Fone network, Vietnam’s first Code Division Multiple Access (CDMA) network.

S-Fone was set up in 2003 under a US$230 million business cooperation contract (BCC) arrangement. The mobile network is jointly owned by Ho Chi Minh City-based Saigon Post and Telecommunications Services Corporation (SPT), South Korean mobile operator SK Telecom and two other Korean firms.

“S-Fone still maintains its stable operations and continues to commit to its sustainable development in the Vietnamese market,” Son told Tuoi Tre newspaper.

He said SK Telecom and SPT were in talks about forming a joint venture to improve the operation of the network.

But Son admitted the talks had encountered some obstacles, with the two sides having difficulty agreeing on rights, investment capital and priorities.

The joint venture negotiations were expected to conclude next month, he said, with both sides aware of the possibility an agreement would not be reached.

Whatever the outcome, Son said, the benefits of S-Fone users would be secured.

S-Fone was the third mobile carrier to be set up in Vietnam after two state-run operators, MobiFone and VinaPhone,

Despite enjoying a strong growth after its initial launch six years ago, S-Fone has been lagging behind military-run Viettel, MobiFone and Vinaphone in terms of market share.

S-Fone has about 7.3 million of Vietnam’s 97 million mobile phone subscribers.

 Hong Nguyen

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