Telstra ends 17-year cooperation work in Vietnam

Telstra has ended a 17-year cooperation with Vietnam's state monopoly carrier Vietnam Posts and Telecommunications Corp. (VNPT) but does not rule out returning to work there in future, Telstra has said.

Telstra was one of the first international telecommunications companies to enter Vietnam following the country's reunification in 1975, and for a few years located its Asia-Pacific regional headquarters in the capital Hanoi.

Telstra's involvement began in 1986, when it effectively reconnected Vietnam to the world's telecommunications network. It built a satellite earth station for routing Vietnam's international voice traffic through an Australian gateway, replacing 12 international circuits using UHF radio routed through Moscow.

In 1990, Telstra and VNPT signed an agreement to develop Vietnam's fixed-line telecommunications under a deal known as a Business Cooperation Contract (BCC), the only format under which foreign countries could operate in Vietnam's telecommunications business.

The work that Telstra carried out since then "has done an excellent job in helping Vietnam build a modern telecommunications network and contributed significantly in leading us into the digital world," Pham Long Tran, VNPT's chief executive officer said in a statement Tuesday.

Among the infrastructure built by Telstra as part of its US$237 million investment are:

-- a 2.5G bps (bits per second) Synchronous Digital Hierarchy (SDH) optical fiber backbone trunk from Hanoi to Ho Chi Minh City which provided the first secure, high capacity communications trunks from north to south.

-- the construction of satellite earth stations in Hanoi, Ho Chi Minh City and Binh Duong, and international gateway exchanges in these locations as well as Da Nang;

-- the T-V-H submarine optical fiber cable system linking Thailand, Vietnam and Hong Kong

The decision to close its Vietnam operations does not mean the end of Telstra's interest in the country, though.

"We have not cut ties with Vietnam, we maintain a very good relationship with VNPT and have expressed an interest in working with them in future," said Graeme Salt, a spokesman for Telstra International. "It was commercially a good deal for us, and we have simply come to the end of the timeframe for the BCC."

A BCC is a fixed-term contract which does not give foreign investors responsibility for day-to-day operation of the business, and with a limited time to recoup their investment. It has often been criticized by foreign investors in Vietnam as an unwieldy and outmoded form of investment in a fast-moving commercial world, a view shared by Telstra.

"That has been a big issue -- BCC was built for a different time," said Salt. "If we go back in we'll be looking for something more collaborative."

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