Vietnam Mobile Telecom Services Company

Concluded

In July of 1995, Vietnam Mobile Telecom Services Company (VMTS) was awarded a 10-year revenue-sharing agreement with the state-owned Vietnam Posts and Telecommunications Corp. (VNPT) for the operation of mobile phone network under the brand name MobiFone. Under the terms of the contract, VMTS would receive 50% of the revenues generated by Mobifone for the first five years of operation and 40% thereafter. This was amended in October 2000 whereby VMTS would continue to receive 50% of generated revenues from years 6-10. At the time the revenue sharing agreement expired in 2005, legal title to all equipment was to be transferred to VNPT at a price of US$1, after which the VNPT planned to publically list the company. The network went live in June 1993. VMTS was a 50-50 joint venture between the Sweden-based company Comvik International and VNPT. Comvik International Vietnam AB, in turn, was a 90% owned subsidiary of Millicom International Cellular SA of Luxembourg- a leading investor in and operator of cellular telephone services worldwide. Under the original contract, Millicom committed to invest US$128 million in the network build-out, which had been met as of December 31, 2002. In 2000, Millicom agreed to an additional investment of US$65 million of which US$18 million had been disbursed by December 2002. In March of 1996, the company awarded a US$70 million contract to Sweden's L.M. Ericsson AB and a US$30 million contract to France's Alcatel Alsthom for the network supply. By end 2004, Mobifone had 2.2 million subscribers, which placed it behind market leader Vinaphone, which was wholly owned by VNPT. By the time the contract concluded in May 2005, VNPT and its partner claimed to have invested nearly US$456 million in the company. VNPT was planning a public listing of the company in 2007, intending to sell a 49% stake in VMTS to the public. http://www.millicom.com/investor/downloads/mic2002_ar.pdf The contract concluded in May 2005 so capacity figures were removed after that point. An IPO is imminent for the same asset, but that will be a new project, a partial divestiture.