Taiwan telco joins forces with Viettel Mobile

Chunghwa Telecom Co. Ltd, a telecom giant in Taiwan, is mulling teaming up with Viettel Mobile to tap the fast-growing Vietnamese market.

The joint venture, which will be capitalized at around US$3.9mil, will first focus on Internet Data Center business and Chunghwa may diversify operations into other service sectors.

Under Vietnamese law, Chunghwa's ownership in the venture will be capped at less than 50%.

An executive from Chunghwa Telecom said the venture, if translated into reality, would be the first overseas telecom investment by Chunghwa and that it showed the growth potential held by the local market where large numbers of Taiwan investors have set up shop.

He said his company had assessed the feasibility of the investment project for nearly a year.

Viettel sent its senior officials to Taiwan last month to work with Chunghwa over the plan.

"At first, we planned to join hands with MobiFone through the acquisition of a 29% stake in it. However, the Vietnamese mobile service provider had not decided when to sell shares to Chunghwa since the two reached an agreement in May this year," he added.

The Taiwan telecom provider opened a representative office in HCMC last year.

Chunghwa Telecom president Shyue-Ching Lu said at the opening ceremony last year that the most important mission of the HCMC office was to boost the company's services for Taiwanese enterprises in Vietnam.

The company wants to strengthen cooperative ties with local telecom service providers, he said.

Under Chunghwa's plan, it has set aside US$181mil for overseas investments this year. It spent about US$36mil in the first six months of this year.

With 4,000 base transceiver stations, 10mil subscribers, the military-owned Viettel is emerging as one of the country's largest mobile service providers.

The firm's market share grew to 35% from 27% in late 2006.

Viettel posted revenue of VND7tril (US$437.5mil) in the first half of the year, equivalent to the amount recorded in all of 2006 or about 23% of the post and telecom sector's total.

Source: VNE