Russian telecom company VimpelCom has announced a plan to provide an additional US$500 million for its Vietnamese joint venture, GTEL-Mobile, through 2013.
The company has completed the first stage of the financing plan by paying $196 million for newly issued shares, increasing its stake in the venture to 49 from 40 percent, it said in a statement Tuesday.
GTEL, the Vietnamese partner, has retained a 51 percent interest in the joint venture, the statement said, adding that the Russian company will assume operational management of GTEL-Mobile.
VimpelCom plans to invest another $304 million to increase its stake further to 65 percent.
"We are confident that we will be able to develop our operations in Vietnam in close cooperation with our partner, GTEL, while taking advantage of the scale and scope of the newly enlarged VimpelCom Group," said Alexey Blyumin, General Director of GTEL-Mobile.
New York-listed VimpelCom provides wireless, fixed and broadband services in many countries around the world under different brands. In Vietnam, its joint venture is the operator of mobile phone network Beeline.
The investment announcement came after Beeline cut back on promotional and advertising campaigns, sparking rumors that the Russian partner wanted to retreat from the venture.
News website VnExpress on Thursday cited a representative for Beeline as saying that the network actually faced financial difficulties. The new funding of $196 million from VimpelCom, however, will help solve the problems, the representative said.
Beeline launched its service in Vietnam in July 2009, becoming the seventh mobile phone network in the country.