The imperativeness of the topic
In October 2004, Viettel introduced its mobile phone service, revolutionizing access to affordable telecommunications for society Since then, the company has consistently evolved its services, enhancing user satisfaction and delivering superior communication solutions.
3G is the service in indispensable development trend of telecommunication market It brings utilities and efficiency for individuals and enterprises in applying information technology into their business and production activities
On October 12, 2009, Viettel proudly obtained its 3G trading license, marking a significant milestone that laid a strong foundation for strategic investments in 3G services.
On March 25, 2010, Viettel Telecom launched its third-generation mobile phone network (3G) with the slogan "Life Colour." Initially, Viettel offered users three core services: Video Call, Mobile Internet, and D-com 3G for computers, along with seven value-added services including Mobile TV, Imuzik 3G, Mclip, V-mail, web surfing, Mstore, and gaming.
This project focuses on developing a strategic plan for the introduction of 3G virtual private network and 3G office WAN telecom services by Viettel Telecom in Vietnam, addressing a gap in the current market offerings.
Research objectives
The project aims to evaluate trading trends for 3G virtual private networks and 3G office wide area networks, paving the way for their launch in Viettel Telecom's Vietnamese market Based on this analysis, we will develop an effective strategy and propose actionable solutions to enhance the growth of 3G virtual private network and 3G office wide area network services over the next five years for Viettel Telecom.
Research object and scope
This capstone project focuses on the product development strategy within the Vietnamese telecom sector, specifically examining Viettel Telecom's 3G virtual private network and 3G office wide area network services As these innovative telecom services are currently absent from the Vietnamese market, this research aims to explore their potential introduction and impact.
Research method
Our research utilized both primary and secondary data collected from two key sources: internal investigations from Viettel Telecom and information obtained from the websites of the Ministry of Information and Communication (MIC) and the Vietnam Chamber of Commerce and Industry (VCCI) Additionally, we administered questionnaires to fifty customers to gather further insights.
We use methods of surveying and sampling for related objects, analyzing data, summarizing and comparing
Theory foundation introduced logical analysis with reality as well as solutions for operation of enterprise
Structure
This capstone project includes three chapters:
Chapter 1: Theoretical foundation about strategic planning to develop 3G Virtual Private Network and 3G Office Wide Area Network services
Chapter 2: Basic analysis of strategic planning to develop 3G Virtual Private Network and 3G Office Wide Area Network services of Viettel Telecom
Chapter 3: Selection strategy for 3G Virtual Private Network and 3G Office Wide Area Network services of Viettel Telecom.
THEORETICAL FOUNDATION ABOUT STRATEGIC PLANNING
Product
1.1.1 The concept 3G and 3G Virtual Private Network and 3G Office Wide Area Network telecommunication services
3G (third-generation stands for technology) is a communications technology, standard mobile broadband third-generation, allowing to transfer both voice and non-voice data (data, email, instant messaging quick, pictures)
Viettel Telecom has officially launched three essential 3G services, including Video Call, Mobile Internet, and D-com 3G for computers Additionally, the company offers seven value-added services: Mobile TV, Imuzik 3G, Mclip, V-mail, Web Surf, Mstore, and Games.
3G Virtual Private Network and 3G Office Wide Area Network will be launched next time
What are 3G Virtual Private Network and 3G Office Wide Area Network?
3G Virtual Private Network (Abbreviation 3G VPN) and 3G Office Wide Area Network (Abbreviation 3G OW): are solution providing virtual private network connection on the wireless infrastructure, using 3G technology
There are three levels of a product They are the core product, basic product, augmented product The structure is showed on the Figure 1.1
Figure 1.1: Three levels of product
Core product means fundamental interests whose products satisfy customer needs Actual product includes level of quality, style, brand name, packaging, identity
Augmented product is a service or additional benefits of the product
The product life cycle is shown on the Figure 1.2
A product life cycle is divided into four stages:
Introduction: Launching product into market This stage has fewer buyers with small revenues and hardly competitors
Product development: the revenues are much increased with the penetration of rivals in market At this stage, enterprise usually has high interest
Maturity: Product has placement, intensive competition, stable revenues and low interest
As consumer demand decreases, businesses face reduced earnings and potential losses To combat this decline, companies must implement effective strategies for underperforming products, which may include improving existing offerings, innovating, or developing entirely new products to better meet market demands.
Process of strategic analysis
1.2.1 Macro-economic environment analysis (PESTLE model)
The government's new management policies, including trade regulations, national barriers, and foreign investment laws, are reshaping the political and legal landscape In particular, the telecommunications industry is prioritizing consumer interests and security, leading to the implementation of strict regulations that significantly impact business operations.
Gross Domestic Product (GDP) provides a comprehensive overview of the economy, indirectly impacting business operations and production across various industries Additionally, it serves as a crucial lever for enhancing business and production activities.
Income per capita: the increasing of income per capita will make the demand, quantity and quality of product increase as well as change the taste of consumers
Inflation, foreign exchange rate, currency policy also have big impact to the Business strategy of business
The consumption patterns, lifestyle, and cultural influences of different regions significantly shape consumer preferences regarding the types, models, and quality of products Additionally, the growing population directly contributes to increased demand in the consumer goods market, which positively impacts business strategies.
Technological advancements can render existing products obsolete overnight, while simultaneously paving the way for a host of innovative new offerings These changes present both opportunities and threats, significantly impacting the market landscape.
Wireless communication technology presents significant opportunities for fundamental advancements in connectivity Hand-held devices and wireless communication tools are revolutionizing various network services, enhancing the way we interact The rise of laptop wireless connections and mobile web access is driving individuals to seek more efficient methods of communication and commerce.
Environment: The problem of environmental pollution, waste of natural resources and particularly the status of natural disasters, floods affecting the infrastructure of telecommunications
The industry environment analysis is done via the Porter’s five forces as the figure 1.3
Figure 1.3: Porter’s Five- forces Model
1.2.3 Ansoff Matrix: assessment risk level
The assessment risk level is presented on the Figure 1.4
1.2.4 Ansoff Matrix: market and product expansion strategy
The market and product expansion strategy is analyzed via the Figure 1.5
Figure 1.5: Ansoff Matrix: market and product expansion strategy
Process of strategic analysis is also implemented via the SWOT matrix as the Figure 1.6
BASIC ANALYSIS OF STRATEGIC PLANNING TO DEVELOP 3G
General Introduction about Viettel Telecom
Viettel Telecom, a subsidiary of the Viettel Group, was established on June 18, 2007, through the merger of Viettel Long Distance Telephone and Viettel Mobile Telephone Today, Viettel Telecom provides a comprehensive range of telecom services across Vietnam.
Hereafter are some important milestones in the development process of the company:
In 1989 : Establishment of SIGELCO, former organization of Military Telecom Corporation (Viettel)
In 1995 : SIGELCO was renamed as Military electrical communication corporation (trading name as Viettel), as the second telecom corporation in Vietnam
Founded in April 2007, Viettel Telecom emerged from the merger of two companies: Long Distance Telephone and Viettel Mobile The primary goal of this merger was to establish Viettel as the leading telecom supplier in Vietnam.
On 25 March, 2010 Viettel telecom officially provided the third generation mobiphone network (3G) with message “life colour” At first, Viettel provides users with three basic services as: Video Call, Mobile Internet, D-com 3G (for computer) and 7 value added services: MobiTV, Imuzik 3G, Mclip, Vmail, Web surf, Mstore, Game
Viettel understands that they should carefully listen to customers’ needs and desires and take care of customers as distinctive individuals
Viettel will initiate and create to meet those distinctive demands with the best sharing and understanding
Set up efficient business plan based on infrastructure and technical network of Viettel as well as unification nationwide
Build organization, implementing business activities as planning business development strategy, organizing and managing sale system, customer care, settling claims and other marketing activities
Well administrating operations of plan, finance, investment, labor organization, salary, training, administration management and material in decentralization to ensure the positive development of telecom services nationwide
Set up professional procedures, documents and training programs for business operation
Organizing the training course for business profession, peripheral cable network development in nationwide
Researching and developing telecom services based on general technology all over the world and clients’ requirements
Managing and operating business operations in accordance with rules and law and state and group
Political mission: having responsibilities prior to Party committee, Directorate with the aim of making Viettel become comprehensive one
Each customer is an individual who must be respected, cared, listened to, understood and served specifically Keep on innovating and, together with customers, create perfect products and services
Society is the foundation for an enterprise to develop VIETTEL commits to reinvest on the society through the integration of production and business activities into social and humanitarian ones
Be sincere to colleagues All together, we will build VIETTEL our common home
2.1.2.4 Core value of Viettel culture
In July 2006, Viettel established eight core values that guide its operations: the importance of reality as a true test, learning from mistakes, embracing change as a norm, fostering value innovation, adopting systems thinking, integrating Eastern and Western approaches, upholding military traditions and manners, and promoting a family-like culture within the organization.
Slogan of Vietel is showed on the Figure 2.1
Viettel is committed to understanding its customers by actively listening to their needs and encouraging them to express their expectations The company prioritizes innovation and initiative, offering a diverse range of high-quality products and services powered by new technology By treating customers as unique individuals and fostering a culture of heartfelt work and social responsibility, Viettel ensures honesty and sincerity in all its interactions with both customers and colleagues.
Logo of Vietel is shown on the Figure 2.2
The logo, inspired by the concept of two apostrophes, symbolizes Viettel's commitment to listening to and respecting the unique ideas of every individual, including employees, customers, and partners This reflects the essence of Viettel's slogan: "Say it your way."
Looking at Viettel’s logo, we can see that it is moving continuously since two apostrophes designed from small to big features with logicality, initiatives and creativeness
Viettel's slogan embodies the unity and solidarity among its members, reflecting the company's strong bond Positioned centrally, the slogan highlights Viettel's business philosophy, emphasizing its commitment to customer care and fostering a sense of family within the organization.
Three colors of logo as: green, saffron and white demonstrating sky, land and human The harmony among sky, land and human proves the sustainable development for Viettel trademark
2.1.3 Trading sectors of Viettel Telecom
2.1.3.2 Supplying services i Mobiphone ii Public switched telephone network (PSTN) and wireless telephone network (Home phone) iii Internet (ADSL, dial-up, Leased-line, Value added…) iv Internet exchange point (IXP) v Voice over Internet Protocol and International Direct Dialing (VoIP, IDD) vi Leased line
Viettel Telecom has 1 Director and 4 Deputy Directors undertaking specific parts The organization structure of Viettel Telecom is showed on the Figure 2.3.
Figure 2.3: Organization Structure of Viettel Telecom
Functional departments of the company focus on: i Setting up strategy and policy ii Summarizing, analyzing and assessing iii Training, instructing and supporting
Analysis Opportunities and Threats of 3G services of Viettel Telecom
2.2.1.1 Analysis Political and Legal environment
Vietnamese law currently restricts foreign enterprises from making direct investments in the country, allowing only joint ventures with a maximum of 30% total investment capital This limitation poses challenges for international telecommunications companies seeking to enter the Vietnamese market.
Telecommunications industry is paying special attention to protect consumer interests and security, so the strict rules are also significant influence in business operations
New corporations are not allowed to self-invest telecom infrastructure (new ones participating under the form of joint venture, merging or hiring telecom infrastructure of other)
3G telecom services are required to have license of Ministry of Information and Communication
Government officially licensed 3G for four among mobile networks at present as Vinaphone, Mobifone, Viettel, and EVN Telecom - Hanoi Telecom joint venture
Analysts predict that the rollout of 3G applications will significantly benefit tens of millions of users, marking a breakthrough for Vietnam's mobile information sector as it aligns with global technological trends Following the Ministry of Information and Communication's organization of the 3G license examination for mobile corporations in March, 3G has become central to the Telecommunications and Information Technology sector in Vietnam Viettel has surpassed its commitment by establishing over 15,000 3G stations within three years of service implementation Additionally, Vietnam's stable political environment fosters secure operations and investment in the telecommunications industry.
2.2.1.2 Analysis Economical environment of Viet Nam
3 GDP per capita (USD/person) 1,200
Source: General Department of Statistic
Viettel Telecom is the corporation supplying telecom services With ever increasing people’s income, it is a good chance for this corporation to expand their trading sector
The socio-economic development strategy for 2001 to 2010 outlines key criteria for progress: GDP is expected to double every eight years, internal economic accumulation should reach 30% of GDP, and the industrial sector's contribution to GDP is targeted to be 38-39% by 2005 and 40-41% by 2010.
As demand for telephone services, internet access, and particularly 3G connections continues to rise, Viettel Telecom has the opportunity to expand its operations and scale within the service sector.
According to the Vietnam Chamber of Commerce and Industry (VCCI), the number of registered enterprises in Vietnam reached 544,000 in 2010, representing a ninefold increase since 2000 This significant growth presents a substantial opportunity for the expansion of 3G VPN and 3G OW services in the market.
Rising inflation significantly affects the living standards of many individuals, leading to a noticeable decline in demand for value-added services in the telecommunications sector, particularly for Viettel.
A stringent credit growth policy has been implemented to combat inflation, posing operational challenges for many businesses, including Viettel, which must carefully evaluate their trading projects.
2.2.1.3 Analysis technological environment in Vietnam
In today's world, technology plays a crucial role in the growth of nations and businesses, significantly impacting the competitive capacity of enterprises through product quality and cost However, adapting to new technologies is a complex process that necessitates skilled personnel, financial resources, strategic development policies, and effective management For Viettel, the advancement of technologies, particularly in 3G, presents both opportunities and challenges While it allows for improved product quality and increased labor productivity, it also compels the company to lower service fees to remain competitive against existing rivals and new market entrants.
Telecommunications technology is one develop very quickly, so the replacement for 3G services by 4G services has been investing by leading company in the world
Natural factors: Geographic location, climate, weathers affect to our service quality and the investment to telecom infrastructure
2.2.2 Industry environment analysis: Porter’s Five- forces Model
Due to specialize of 3G VPN and 3G OW, the customers of this service will be organizations which have demanded on using intranet network
Viettel's primary clients for its 3G VPN and 3G OW services include corporate organizations, small and medium enterprises, and government offices The company offers customized products tailored to meet the unique needs of each client, focusing on aspects such as product quality, pricing policies, problem resolution, and after-sales support With a diverse range of corporate customers, including government bodies and large corporations, Viettel recognizes the importance of understanding the purchasing power and requirements of these groups, necessitating a dedicated task force to effectively engage with them.
2.2.2.2 Power of suppliers i Financial suppliers: BIDV, MHB, Military bank ii Material suppliers: AT&T (The US), BlackBerry Nokia Siemens Networks,
ZTE, Huawei iii Viettel is the big network operator having demand on using many resources
Viettel is an essential partner for suppliers in the finance, material, and equipment sectors, thanks to its commitment to fostering strong relationships The company has implemented policies that ensure the delivery of high-quality products at competitive prices while maintaining timely supply, making it an attractive choice for collaboration.
2.2.2.3 Available rival a Market share of telecommunication enterprise
Market share of telecommunication enterprise by value is shown on the Figure 2.4
Figure 2.4: Market share by value
Source: Survey data of Viettel
Thị phần của các nhà mạng
EVN Telecom HT Mobile BeeLine
The telecom market is highly competitive, with major players including MOBIFONE, VINAFONE, SFONE, and BEELINE Currently, Viettel leads with a significant 44% market share, closely followed by Mobifone and Vinaphone, which together account for 43%.
Market share of telecommunication enterprise by number of subscriber is shown on the Figure 2.5
Figure 2.5: Market share by subscriber
Source: Survey data of MIC
Viettel Telecom leads in market share by revenue, surpassing VNPT; however, in terms of subscriber count, Viettel trails behind VNPT This discrepancy can be attributed to the average revenue per user (ARPU) metrics.
ARPU, or Average Revenue Per User, is a crucial metric for assessing the business performance of telecommunications companies Analyzing the ARPU index reveals that Viettel Telecom outperforms VNPT in terms of business effectiveness, highlighting the competitive landscape within the industry.
Viettel's primary competitors in the 3G service market include Mobile and Vinaphone, both managed by VNPT, along with HTmobile and the EVN Telecom joint venture Among these, VNPT stands out as Viettel's main rival, positioning itself as a leading multi-service telecom supplier in the industry.
Table 2.2: Comparison with main competitors
Source: Data was surveyed and sampled from 50 clients as banks and financial organizations in Hanoi
Assessed criteria base on score system from 1 to 10:
5 to 6: normal; 9 to 10: significantly good
From above table, we can see that, Viettel still holds advantages in market development for 3G VPN and 3G OW services
The most strength of Viettel is price policy and the weakest is after-sale customer care
At the same time, VNPT has following strengths and Weaknesses:
VNPT has strategically invested thousands of billions VND in Vinaphone and Mobifone to advance the research and development of 2G-based 3G technology This initiative includes a systematic upgrade of their technology from 2G to 2.5G and 3G, reflecting VNPT's commitment to staying ahead in technological advancements.
Route coverage: after having of 3G licenses, VNPT plans covered 63 provinces and cities in the country, particularly crowded populated provinces
Analysis on Strengths and Weaknesses of 3G VPN and 3G OW services of
2.3.1 Analyze 3G VPN and 3G OW service product of Viettel Telecom
2.3.1.1 Three product levels of 3G VPN and 3G OW
A VPN, or virtual private network, enables secure connections between remote users or locations and a local area network (LAN) at headquarters using public networks The 3G VPN connection leverages wireless infrastructure and 3G technology to provide a robust and flexible virtual private network solution.
Our product offers high security through the use of a Virtual Private Network (VPN) and advanced code protocols like Ipsec, ensuring robust information protection It features quick implementation to meet urgent requirements efficiently Additionally, users benefit from diverse connection options, including switched and wireless selections Our nationwide development strategy ensures independence from relief efforts, promoting resilience and reliability.
Augmented product: i Installation services ii Warranty services iii The after-sales services
2.3.1.2 Product life cycle of 3G VPN and 3G OW services
Introduction stage: Objective of product launching is to create awareness and induce trial via heavy sales promotion, offer basic product for current customers of Viettel Telecom
2.3.1.3 Compare 3G VPN and 3G OW services with traditional VPN and OW services
The differences of 3G VPN and 3G OW products:
Description of service: i Committed band: 95% ii Delay: ~ 200ms iii Packet lost 10 -4 % iv Accident receiving time: 0.5h v Accident solving time: