According to the Korea Times, the company denied speculation that it has agreed with its Vietnam partner Saigon Post and Telecommunication Corporation (SPT) to abandon the S-Fone mobile network business cooperation project.

"We haven’t changed from our earlier stance on Vietnam. Our company will stop investment there," company spokeswoman Cindy Kang said.

In line with such a strategy, she confirmed that SK Telecom had already scrapped its participation in the operation of third-generation (3G) mobile networks with SPT.

When asked about media reports that the company had signed a memorandum of understanding (MOU) with SPT to get a 20 percent stake in a joint venture in return for a complete departure, Kang said the claims were "totally groundless."

SK Telecom and SPT rolled out the S-Fone network project with an initial capital of $230 million in 2001 to provide CDMA mobile services in Vietnam.

So far S-Fone, among only two providers of the phone services ― alongside EVN Telecom ― now has 7.3 million subscribers, or less than 10 percent of the local market share.

"Since 2003, it has been investing over $150 million in Vietnam attracted by higher growth potential in Vietnam’s telecom market. But the investment return wasn’t so good," a high-ranking SK Telecom executive said.

Despite the company’s latest decision, S-Fone will be converted as a joint venture.

Officials say procedures for ending the business cooperation contract and inking a joint venture contract will be completed before applying for a license for the latter.

Media reports say a South Korea-based private equity fund (PEF) Rutter Associates Korea is set to strike an MOU with SPT regarding the joint venture sometime early next year.

Rutter Associates is expected to invest some 100 billion won as initial funding for the venture.

Reports say the PEF will become the second-biggest stakeholder in S-Fone by acquiring a 49-percent share.

Representatives of Rutter Associates, however, weren’t available for comment.

Painful Procedures

Analysts say SK Telecom’s exit strategy in Vietnam is reasonable. Hit by a series of failures in its overseas businesses in the United States and China, it is realigning its business strategies for overseas markets.

"The company’s direct investment-strategy in overseas telecommunication markets was so ambitious considering the weak corporate image and higher competition from existing players," Kim Dong-june, an analyst at Eugene Investment, said.

SK controls over 50 percent of South Korea’s telecom market and recently unveiled its industrial productivity enhancement (IPE) strategy.

It hopes to break through stalled growth in the local telecommunication market by focusing on providing services that enhance productivity.

"We aim to attain IPE revenue of 20 trillion by 2020 and we hope more than 50 percent of that revenue will come from our overseas markets," said Jung Man-won, the company’s CEO.