The US$ 7.0 million iPSTAR gateway station, which Thailand's Shin Satellite leases to state-owned Vietnam Telecom International (VTI), would help reduce costs and provide more services, VTI said.

VTI Managing Director Nguyen Huu Khanh said users could access broadband Internet, television and video conference services. Each terminal, costing US$ 1,825, could also be used for mobile phone connections.

"Without this satellite service, work to bring telephone to 100% of Vietnam's communes by the end of the year is not feasible because of the high cost," Khanh said.

"This project is not aimed at commercial purposes as we want to narrow the digital gap between rural and urban areas."

Industry officials said the telecommunications industry has huge potential for expansion in Vietnam given its population of 82 million. The government plans to increase the number of phones to 13.95 million this year, a 35% increase over 10.3 million last year and almost double the 7.39 million subscribers in 2003.

Shin Satellite launched the US$ 400-million Thaicom 4 satellite in August. Commercial operations in Thailand started this month. Shin plans to complete the launch of the remaining gateways in 12 countries, including Australia, China, India, Indonesia, South Korea and New Zealand, within the next 12 months.

Source: Reuters - WDR/Intelecon Regulatory News