Second placed Russian mobile operator VimpelCom said Tuesday that it will spend $1bn on the formation of a joint venture cellco in Vietnam.

The operator will be set up in partnership with the Ministry of Public Security of Vietnam and US-based Millennium Global Solutions Group. It will operate under the name GTel Mobile.

VimpelCom will invest up to $1bn over the next several years in the development of a GSM mobile network and provide technical and operational expertise to the joint venture. VimpelCom will own a minority voting stake in the venture but will hold a majority of the economic interest and “will exercise significant influence” over the company’s operations.

Alexander Izosimov, CEO of VimpelCom said, “Vietnam is a very attractive market, with a growing population of approximately 85 million people and mobile penetration of approximately 32 per cent. The country has joined the WTO and the economy is developing rapidly. Overall we view this as a great growth opportunity for VimpelCom and its shareholders.”