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Vodafone prepares for Vietnam push
Mark Kleinman in Hong Kong, Sunday Telegraph
Last Updated: 12:50am BST 08/07/2007



Mark Kleinman's blog: Notes from the Far East
Vodafone is preparing to break into Vietnam, one of the world's last remaining untapped markets for international mobile phone operators.

The Sunday Telegraph has learned that the British group has begun scouring the country's state-dominated mobile phone sector for prospective acquisitions that could ultimately cost it hundreds of millions of dollars.

advertisementVodafone has opened a representative office in Hanoi in recent weeks ahead of an expected privatisation programme overseen by Vietnam's communist government.

Fresh from its £5.5bn takeover of Hutchison Essar, the Indian mobile network, Vodafone is accelerating its push into Asia, where it also owns a small stake in China Mobile, the state-owned behemoth that operates in a market boasting almost half a billion wireless customers.

People close to Vodafone said this weekend that the company's interest in Vietnam was at an early stage but that it was positioning itself in readiness to secure partnership agreements and, ultimately, significant stakes in at least one of the government-owned companies.

Other international mobile operators are also thought to have set up representative offices in Vietnam in recent weeks. Among the overseas firms that already operate there is Hutchison Telecommunications International, the Hong Kong-based company from which Vodafone acquired its stake in Hutchison Essar.

Warren Finegold, the former UBS investment banker who is now Vodafone's chief executive of global business development, oversaw the opening of the Hanoi office on a recent visit, when he also held talks with government officials and regulators.

Jonathan Kriegel, the managing director of Vodafone's interests in China, is understood to have taken on the additional role of country officer for Vietnam.

Vietnam's economy, which has experienced expansion comparable to China and India, is fuelling a consumption boom that has seen industries including mobile telecoms achieve rapid growth in customers and revenues.

Although Vietnam has a sizeable population of 80m people, only a quarter are mobile phone users. Industry forecasts suggest that take-up is likely to double by 2010.

First in line for the Vietnamese Ministry of Post and Telematics ' privatisation programme are likely to be VinaFone and MobiFone, two of the country's biggest mobile companies.

The Vietnamese government is already engaged in a far-reaching programme of privatising state-owned assets, which include banks and other financial services firms, retailers and utilities.

Strategic foreign investors are being encouraged to buy stakes in these companies in an effort to accelerate corporate governance reforms and bring Western operational expertise.

Vodafone declined to comment on any prospective deals in Vietnam.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/07/08/cnvoda108.xml