Russia’s No.2 mobile phone operator Vimpelcom (VIP.N: Quote, Profile, Research) is to set up a mobile services joint venture in Vietnam and will invest up to $1 billion in a GSM mobile network there over the next few years.

Vimpelcom said in a statement on Wednesday it would only hold minority voting rights in the venture, GTel Mobile, in line with Vietnamese law, but under the deal will be entitled to the majority of profits.

The venture will be the first expansion step by Vimpelcom outside Russia and the CIS, the home market for the telecoms major, which is looking to diversify at a time when mobile telecoms markets of Russia and Ukraine are close to saturation.

“Vietnam is a very attractive market, with a growing population of approximately 85 million people and mobile penetration of approximately 32 percent,” said Chief Executive Officer Alexander Izosimov.

Vimpelcom said a company owned by the Ministry of Public Security of Vietnam and U.S. Millennium Global Solutions Group Inc. would be its partners in the joint venture.

Vimpelcom, which operates under the Beeline brand, is owned by Russia’s Alfa Group and Norway’s Telenor

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