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. Last Updated: 07/27/2016

Vietnam Signs $1Bln Telecoms Deal

APPutin speaking with Vietnamese Prime Minister Nguyen Tan Dung at his Novo-Ogaryovo residence late Tuesday.
Vietnamese Prime Minister Nguyen Tan Dung on Wednesday blessed the signing of a raft of business deals with Russian firms and called on Russians to return to the country.

VimpelCom, Russia's second-largest mobile operator, said Wednesday that it had agreed to form a joint venture in Vietnam and invest $1 billion to develop the country's mobile network. An official at United Company RusAl said it could soon clinch a lucrative deal to develop bauxite deposits in the country.

Regarded as a bulwark of communism after the Viet Cong drove U.S. forces out of the country, Vietnam was the recipient of billions of dollars in aid from the Soviet Union. After the Soviet collapse, economic cooperation virtually dried up, and Russia closed its military base in the country in 2002.

Dung came to Moscow at the invitation of Prime Minister Mikhail Fradkov. President Vladimir Putin, who is seeking to revive ties with Moscow's former allies, also met with Dung at his Novo-Ogaryovo residence Tuesday evening.

"We came to a conclusion that we need to expand our cooperation," Dung said at a business forum Wednesday, speaking of his meetings with Fradkov and Putin, adding that the most promising sectors of cooperation were oil, energy, nuclear, agriculture, processing and tourism.

"You will come to Vietnam and immediately find people who can speak Russian -- not only speak, but sing in Russian, too," Dung said. Most people in the audience at the forum were Vietnamese rather than Russian, however.

Russia is currently the second-largest destination for Vietnamese investments after Laos, Dung said. In Vietnam, Russian firms are currently involved in 54 projects, worth $300 million, he said.

Deals signed during the forum included one between Power Machines and Agrimeco, which agreed to set up a joint venture to make hydraulic turbines and generators. The investment would be $80 million from 2008 to 2011, Power Machines said.

An official with the Vietnamese Embassy said 11 deals were signed Wednesday but could not put a total figure on them.

Separately, VimpelCom said Wednesday that it would set up a joint venture in Vietnam to invest $1 billion in the country's GSM mobile network over the next few years. It will be the company's first foreign venture outside the Commonwealth of Independent States. VimpelCom said it would only hold minority voting rights in the venture, GTel Mobile, in line with Vietnamese law, but would be entitled to a majority of the profits.

At the forum, Alfa's telecom arm, Altimo, and Vietnam's Viettel signed a strategic cooperation agreement but provided no details of the deal.

Maxim Sokov, director for strategic projects at RusAl, said at the forum that the firm was in talks with Vietnamese officials to develop bauxite in the country and could soon clinch a deal that could lead to full-cycle production of aluminum there. A source close to the company said Wednesday that the deal could be worth $1 billion to $1.5 billion.

Also Wednesday, Gazprom CEO Alexei Miller met with Dung to discuss ways to further develop offshore oil and gas projects in Vietnam. Last year, Gazprom and Petrovietnam signed an agreement to jointly develop projects in Vietnam and other countries.