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VietNamNews

No bailouts for struggling telecoms

Update: December, 14/2012 - 10:59

HA NOI (VNS)— The Ministry of Information and Communications (MIC) would maintain healthy competition in the telecoms market, but would not step in to save struggling firms that were unable to compete.

Speaking at a recent industry conference, head of MIC's telecoms department Phan Hong Hai said the ministry would facilitate the development of telecoms firms but would not rescue them from bankruptcy.

"Ailing firms will withdraw from the market or die naturally as dictated by the laws of a market economy," Hai said.

However, Hai confirmed MIC's strategy to keep at least three competent telecoms firms in order to maintain healthy competition. The move follows recent fluctuations in the telecoms market that has seen a number of companies fold and others fighting for survival.

Most recently was the withdrawal of Dong Duong Telecom on Monday after its licence to provide mobile virtual network services was revoked by the ministry due to sluggish implementation.

Faltering mobile provider S-Fone made most of its employees in Ha Noi redundant in July in order to end its Business Co-operation Contract mechanism and change to a limited liability company.

Having started operations in Viet Nam in 2003 as the third mobile operator after MobiFone and VinaPhone, S-Fone was a joint venture between Korean telecoms giant SK Telecom and SPT.

The company also became the first mobile operator to apply the advanced CDMA technology (Code Division Multiple Access) in Viet Nam, while other carriers used the GSM (Global System for Mobile Communications).

However, due to the limited number of CDMA handsets, the company was unable to raise its customer base, with just over 1 million after a decade of operations.

After SK Telecom withdrew from the venture last year, S-Fone has been unable to find a new investor to develop its ailing network.

Another mobilephone company, Vietnamobile, in June planned to seek a bailout from the Government to stave off bankruptcy while struggling to compete in a telecoms market dominated by three major players. — VNS

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