Vietnam telecom giant wants to acquire Kakao Talk, Zalo

TN News

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Viettel has said it wants to buy South Korean free call and message application Kakao Talk and Vietnamese app Zalo, saying it would be its fastest route into the Internet app market.

The military-run firm's deputy CEO, Nguyen Manh Hung, told news website thoibaokinhtesaigon that his firm is in discussions with Kakao Talk because the brand is popular in Vietnam.

Kakao Talk is a company with a staff of 200 people with great creativity but does not have a big market in Vietnam while Viettel has a big market but is not strong in OTT (over the top), or apps which do not come from the traditional telecoms or Internet service providers, but go over atop established Internet connections.

“If Viettel cannot buy Kakao Talk, it could negotiate to establish a joint venture by acquiring 70 percent of Kakao Talk,” he said.

But Kakao Talk co-CEO Sirgoo Lee told Tech In Asia February 6 that they have “not heard of such a deal and they are currently not in any talks.”

The thoibaokinhtesaigon also reported that before revealing Viettel's intention of striking a deal with the South Korean brand, Nguyen Manh Hung spoke with Vuong Quang Khai, deputy CEO of VNG Corporation, which owns the free call and message app Zalo, about buying it.

But Le Hong Minh, CEO and founder of VNG told thoibaokinhtesaigon that he has not heard about that suggestion of Viettel.

Viettel said it wants to buy the two to enter the OTT market, and the deals would save the time required to develop its own new brand and having to compete with the two apps.

The two other giant telecom firms, VinaPhone and MobiFone, have also said they are considering tying up with OTT brands in Vietnam as well as developing their own OTT brands.

All three have previously said OTT firms offering free messages and calls caused them losses.

MobiFone said late last year that it has been losing around VND1 trillion (US$47.45 million) each year to OTT social apps, while Vietnam Post and Telecommunications Group, which owns MobiFone and Vinaphone, said the apps have reduced its revenues by around 10 percent.

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