Thu, May 08, 2008 - Page 12 News List

Chunghwa eyes Vietnam's fast growing market

GROWTH POTENTIAL Viettel-CHT, Chunghwa's first overseas investment, will start operations next quarter, offering services such as Web hosting


Chunghwa Telecom Co (中華電信), the nation's top phone company, said yesterday that it was in talks with Viettel Corp to buy a stake in Vietnam's second-largest mobile operator as part of its efforts to seek growth opportunities overseas.

Tapping into the fast-growing and liberalizing Vietnamese market, Chunghwa Telecom said it had formed a US$30 million joint venture with Viettel to provide Internet data center services in Hanoi.

“This joint venture in Vietnam is the first step in executing our company’s growth strategy outside of Taiwan,” Chunghwa Telecom chairman Hochen Tan (賀陳旦) said in a press release yesterday.

The venture, Viettel-CHT Co Ltd, is the first overseas investment by Chunghwa Telecom and is scheduled to start operations next quarter, offering broadband leasing, Web hosting and disaster recovery services. Chunghwa Telecom holds a 30 percent stake in venture, while Viettel controls the remaining 70 percent.

Hochen said yesterday on the sidelines of a press briefing that Chunghwa Telecom was “also in talks with Viettel about cooperation in different areas.”

“We also hope to invest in [Viettel],” he said. “We hope to tap into the fast-growing market with our local partners rather than by ourselves.”

The Vietnamese government is planning to sell its shareholdings in local state-run telecom companies, including Viettel, and the nation’s biggest mobile operator, Vietnam Posts and Telecommunications Group, but has delayed execution several times, Hochen said.

Chunghwa Telecom is closely monitoring Vietnam Posts’ planned share offering as it is interested in buying a stake, he said.

Vietnam’s mobile penetration rate is expected to rise at an annual pace of 23 percent from this year through 2013, Viettel said on its Web site, citing an unspecified research house’s forecast.

Vietnam, which has a population of 85 million, has a mobile penetration rate of only 40 percent, Chunghwa Telecom said.

Viettel has obtained trial licenses to provide next-generation Worldwide Interoperability for Microwave Access (WiMAX) services in the country, and Chunghwa Telecom is in talks with the company to help it build a WiMAX network, Viettel-CHT president Yu Neng-ming (尤能明) said.

Yu, a deputy managing director at Chunghwa Telecom’s IDC department, was appointed to the post of president, as the Taiwanese firm holds two out of the five board seats in the joint venture and is responsible for appointing the president. Viettel will appoint the venture’s chairman.

Hochen said the venture aimed to break even within two, or three years after operation. If the cooperation with Viettel goes smoothly, he said Chunghwa Telecom planned to expand the partnership to provide mobile services in Cambodia. Viettel already provides mobile services there, he said.

Last week, Chunghwa Telecom projected that net income would drop about 10 percent to NT$43.6 billion (US$1.43 billion) this year, compared with NT$48.25 billion last year.

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