Beeline brand to be discontinued

Beeline brand to be discontinued after Russian firm divestment

The mobile network Beeline will be discontinued in Vietnam due to the divestment of Russian VimpelCom Ltd, according to a recent deal.

Accordingly, Vietnamese GTEL Mobile Joint Stock Co will not continue using the Beeline brand after six months from the date of transfer.

VimpelCom Ltd has signed an agreement to sell the its entire indirect 49 percent stake in GTEL Mobile in Vietnam and give up operational control of GTEL Mobile.

The stake will be sold to GTEL Transmit and Infrastructure Service One Member Co Ltd, a related party of the company’s Vietnamese local partner, Global Telecommunications Corp (GTEL).

Under the terms of the agreement, GTEL will pay a cash consideration of US$45 million upon satisfaction of the conditions of the deal.

Upon completion of the sale, VimpelCom will have no further obligations or liabilities to Global Telecommunications Corp or GTEL Mobile.

As previously announced, VimpelCom impaired its investment in Vietnam in Q4/2011, following a detailed business plan review.

VimpelCom does not expect any additional losses related to the sale of the above-mentioned interest, it said.

“The decision to dispose of our interest in GTEL Mobile is a result of this process, which focuses on allocating capital to those markets where we see the best opportunities to generate shareholder value,” said Jo Lunder, Chief Executive Officer of VimpelCom.

In late July of 2009, GTEL Mobile, a joint venture between GTEL and VimpelCom, officially announced the launch of the Beeline mobile network nationwide.

This was the seventh cellular telecommunications network, and the first joint venture network with foreign firms, in Vietnam at the time.

The first telecommunications network with foreign capital in Vietnam is well known for its big promotional campaigns intended to attract customers.

Most recently, late last year, Beeline launched its "Billionaire" package, in which the company placed VND1 billion into the accounts of its customers for intra-network calls.

In mid-2011, VimpelCom announced plans to invest $500 million in the Beeline mobile network through the end of 2013.

The company said it had transferred $196 million dollars into the joint venture to increase its stake to 49 percent.