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  • Marubeni, Kanematsu Each Buy US$15.6M Stake in Telecom Project
  • December 14, 1998 (HO CHI MINH CITY, Vietnam) -- Marubeni Corp. and Kanematsu Corp. will take part in a telephone project with Vietnam Post and Telecommunications (VNPT), a VNPT source said.
    Huu-Minh Nguyen, office chief of VNPT, said Marubeni and Kanematsu will each acquire 13 percent, at a price of US$15.6 million each, in FCR Vietnam Pte., Ltd. (FCR-V), a Singapore-based subsidiary of France Cable et Radio, and will take part in the Vietnam telephone project, Nguyen said.

    France Cable et Radio has a deal with VNPT to expand and jointly operate the telephone network in the eastern area of Ho Chi Minh City, he said.

    Nguyen also said that under the contract FCR would invest an amount of US$467 million to set up a fixed phone network covering 10 districts of the eastern Ho Chi Minh City.

    Gilbert Bolliet, general manager of FCR-V, told BizTech that FCR-V will install 540,000 telephone circuits in Ho Chi Minh City over the next five years. A joint statement from both Marubeni and Kanematsu also said the same.

    "The project is the largest investment the telecommunications corporation has made in Asia," Bolliet said.

    FCR-V signed a memorandum of understanding with VNPT in 1994 and after three years of negotiations, a business cooperation contract was reached in July last year, Bolliet added. He said the duration of the contract is 15 years.

    According to Bolliet, FCV-R is calling tenders for various aspects of construction and equipment supply. He said one foreign company in Vietnam -- Focal Company -- already signed a contract with FCR-V to supply fiber optic cables for the project.

    FCR-V is applying modern technologies for operation of the network, with a 12-strong team including permanent engineers working together with a variety of specialists at various stages of construction. Within city areas, the network will be installed entirely underground, but in suburban neighborhoods, especially in marshy areas, the lines will be hung on poles.

    While calling for investment capital from other partners such as Marubeni and Kanematsu, the construction started last July, Bolliet said. "It is expected about 150km of the network will be completed at the end of this year," he added.

    Huu Minh Nguyen of VNPT confirmed that VNPT plans to eventually mobilize a 40 percent stake among foreign investors of the total US$2.5 billion investment capital to improve the national telecom network by the turn of the century. However, not everything is as smooth as expected, an official familiar with the meetings of VNPT said.

    This anonymous source said due to the slowdown of subscriber growth in large cities, some foreign players involved in business cooperation contracts with VNPT to tap telecom services are rethinking their revenue sharing structures. The source said FCR-V, NTT Corp. and Cable and Wireless Plc. recently reentered negotiations with the local telecommunications authority about the revenue-sharing rate.

    These three players have joined VNPT in business cooperation contracts that attained total investment capital worth US$ 1 billion, the source said.

    (David Tran, Asia BizTech Correspondent)

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    Updated: Sun Dec 13 02:06:37 1998 PDT