OVERVIEW OF THE VIETTEL MILITARY TELECOMMUNICATION GROUP

PART 1: OVERVIEW OF THE VIETTEL MILITARY TELECOMMUNICATION GROUP 1.1 General overview of Viettel With 76 million users, the military telecommunications firm Viettel is presently the biggest telecommunications business in Vietnam The Group is made up of more than 20 businesses that operate in a variety of industries such as telecommunications, investment, real estate, international commerce, and technical services Viettel generate 11.8 billion USD in sales and 1.7 billion USD in profit in 2021, making it one of the most profitable firms in Vietnam 1.1.1 Business activities:  Main lines of business: providing telecommunications, mobile, Internet-TV services, digital applications, information technology, postal, communication, and delivery  Related business lines: material trade, distribution, retail, equipment, information goods, information technology, communication Finance, banking, and real estate Training and supplying human resources to support the Group's local and international manufacturing and commercial operations 1.1.2 Goals and Missions a Goals The goal is progress, the driving force is reform, and the foundation is humanity, peace, and unity These are three interconnected factors But the most important aspect remains unity Solidarity at Viettel must be defined as every Viettel individual, every division in Viettel thinking and acting in the highest consensus, putting the interests and future of the whole business first b Missions With the objective of Creation for People, Viettel treats each consumer as an individual who must be appreciated, cared for, listened to, understood, and treated independently The cornerstone of a successful company is social Viettel is also devoted to reinvesting in society by integrating manufacturing and economic operations with social activities, including initiatives for health care, education, and poverty assistance Viettel's dedication to customers, partners, investors, society, and ourselves is reflected in all of the company's actions These ideals serve as the foundation for Viettel's efforts to create an innovative company for people 1.1.3 Milestones 2007 Viettel Global Investment JSC was established according to the Business Registration Certificate no 0102409426 issued on October 24, 2007 by the Department of Planning and Investment of Hanoi city The initial share capital was 960 billion VND 2008 1/2008: Viettel Global received the investment project in Cambodia from Viettel Group 2/2008: Viettel Global concluded a joint venture contract with Lao Asian Telecom (LAT) to establish Star Telecom Co., Ltd in which Viettel holds 49% share capital, officially started investment in Laos 2009 2/2009: official launch of telecommunications network in Cambodia, started business operation and services provision in the country 10/2009: official launch of telecommunications services in Laos 2010 2/2010: establishment of Viettel Overseas Co., Ltd to implement the investment project on the expansion of the telecommunications network in Haiti 11/2010: Viettel Global won the tender of the investment project of a telecommunications network in Mozambique 2011 9/2011: official launch and started business operation of telecommunications services in Haiti 2012 5/2012: Official launch and started telecommunications services provision in the Mozambique 7/2012: Viettel Global won the tender of an investment license in East Timor 12/2012: Viettel Global won the tender of the 3rd mobile license in Cameroon 2013 3/2013: Official launch of mobile services in East Timor 8/2013: Viettel Global’s Extra-Ordinary Shareholders Meeting made decision on major issues: - Change the Company’s Vietnamese name from: “Company” to “Corporation” - Increase share capital from VND 6,219,052,000,000 up to VNĐ 12,438,112,000,000 - Supplement: "Rent of machines, equipment and other tangible facilities" to the Business Registration of the Company 2014 2/2014: Receive investment license in Burundi 9/2014: Official launch of mobile services in Cameroon 10/2014: Official launch of mobile services in Peru PART ANALYSIS OF VIETTEL'S BUSINESS ENVIRONMENT IN LAOS 2.1 Macro-environmental analysis – Pestel Model 2.1.1 Political and legal environment Political institutions The Lao People's Democratic Republic is a politically institutional state that leads and implements a centralized form of democracy The only legitimate political party is the Las People's Revolutionary Party The Lao People's Army is small, has little budget and insufficient resources; Their mission focused on border and domestic security, mainly against Hmong rebel groups and other opposition Together with the Lao People's Revolutionary Party and the government, the Lao People's Army is the third pillar of the state apparatus and is expected to prevent political and civil unrest or similar emergencies There is no external threat to Laos, and the Lao People's Army maintains strong ties with Vietnam The political environment and social order and safety throughout Laos have been considered stable for many years This is evident in the view of the most important policy of the Party and the State of Laos This political stability has always been considered as the most favorable and attractive opportunity for investment and production and business activities for Vietnam But Laos as well as other socialist states, Laos also followed the path to socialism, which from this point has greatly affected the psychology of investors from the socialist countries Legal system Enterprises investing in Laos are currently difficult to anticipate the difficulties and risks especially when the legal system related to investment in Laos is in the process of being revised and completed, so there are many changes, inconsistencies, lack of transparency and difficulty to access, leading to regrettable obstacles in the process of implementing projects in Laos Customs procedures are unclear, and the collection of taxes is often not in line with the set tax rates Trade law and the commercial court system in Laos are growing slowly and not transparently Trade disputes are rarely adjudicated in favor of foreign investors Cumbersome investment procedures and approval periods are not in accordance with the law Lao Holdings N.V and its subsidiary Sanum Investment Limited submitted an application to the International Center for The Settlement of Investment Disputes – an independent division of the World Bank (WB) proposing to resolve legal disputes related to assets made up of Sanum Investment's direct investments in Laos, to date, more than $85 million has been raised According to Sanum, the Lao government's policies have affected investments and led to the risk that they could lose assets worth up to $400 million There are also some operating licenses and franchises of projects worth hundreds of millions of dollars As a result, Lao Holdings N.V lost $1.8 million per month In February 2018, the Lao Government issued Order No on Improving Business Coordination Regulations and Mechanisms in the Lao PDR, with the expectation of improving Laos' position in the World Bank's Ease of Doing Business rankings As a result, the process of establishing a business is faster due to the simplification of the procedures for applying for licenses and registering company seals from 174 days to less than 40 days Tax administration has always been considered one of the biggest barriers to trade in Laos in surveys for small and medium-sized enterprises The World Bank ranked Laos 154th out of 190 economies in 2019 in terms of ease of doing business In addition to these challenges, the Lao government is also creating a series of more suitable conditions through revised laws, aiming to create a foundation for investor trust such as land incentives, corporate income tax reduction, ensuring an equal competitive environment Vietnam-Laos relationship Vietnam and Laos are two countries with a long tradition of friendship Under the leadership of the two Parties, the two peoples have "committed to suffering" throughout the historical journey against the aggression of the empires as well as in the period of national defense and construction and development The two countries always attach great importance to this special traditional relationship, help each other in all aspects, overcome difficult roads together, stand together on the path of renovation and development of the country in the direction of socialism In the economic field, up to now, trade agreements have been signed with the aim of further expanding trade relations between the two countries on the basis of mutually beneficial equality, respecting the tradition of cooperation and international trade practices With efforts, Vietnam - Laos trade exchange is constantly increasing The two countries are working to boost bilateral trade in 2021 by 10 to 15 percent from last year, potentially reaching $1 billion as planned Vietnam remains Laos' third largest trading partner (after Thailand and China), one of the three largest investors in Laos with 413 projects and a total registered capital of US$4.22 billion, up 35% from 2010 Preferential mechanisms on import and export tax for goods originating from the two countries are continued by the two sides with an ever-expanding list Especially in 2020, there was a breakthrough with new and adjusted projects, accumulated capital of more than 143 million USD, up 130% over the same period in 2019 Many investment projects promote efficiency, production, and business profitably, contribute positively to the development of the two countries, create jobs, increase social welfare, help Laos well implement poverty eradication policies Although there are still difficulties in terms of capital, Vietnam always gives certain development aid to Laos, in the period of 2016-2021 is VND 3,250 billion, funded for many different fields, the most priority for human resource development 2.1.2 Economic environment Size of economy Laos has one of the fastest economic growth rates in ASEAN and has maintained a rate of about 7% per year in recent years (from 2009 to 2017) The inflation rate is quite low (1.3-2% per year) Simple investment mechanism, expanding bank credit for agriculture and small businesses, developing special economic zones it has contributed to attracting foreign investors and helping the Lao economy develop well Laos' total GDP reached 18.17 billion USD, the GDP growth rate was 4.7% and in 2019 according to the World Bank report Despite this, the Lao economy still has many difficulties, the infrastructure is in the development stage, labor productivity and labor quality are still low Laos' economic development depends largely on mining, electricity, foreign investment (FDI) and foreign aid The road system is currently at a basic level, but is improving, and there are restrictions on telecommunications in internal and external lines Electricity is available to 83% of the population Recently, the country has faced persistent current account deficits, falling foreign currency reserves and growing public debt International companies are developing special economic zones in Vientiane, Savanna khet and Champassak provinces and others Special economic zones offer a wide range of incentives and tax exemptions to investors depending on the industry, besides the Lao Government constantly strives to improve the business environment International investors have been attracted by the abundance of cheap electricity, low labor costs, Laos' central location in the expanding Mekong Subregion, the improvement of transport infrastructure The level of infrastructure development in Laos is still low but is improving rapidly The China-Laos railway, scheduled to begin operations in 2021, will soon connect Vientiane with Kunming, Yunnan province via high-speed rail, and will connect northern Lao cities such as Boten, Vang Vieng and Luang Prabang with Vientiane The 113.5 km-long Vientiane-Vang Vieng Highway is expected to be completed by 2021 Other new infrastructure projects include a highway linking Boten in Northern Laos with Thailand in northwestern Laos; a new highway connecting Vientiane to Boten on the Laos-China border; road reclamation on the East-West Economic Corridor in Savanna khet Province of Southern Laos; and in the future may be a highway connecting Vientiane with Hanoi of Vietnam Access to capital: The accessibility of SMEs (small and medium-sized enterprises) is still difficult because banks require some steps to force small businesses to borrow capital from microfinance institutions, they may even have to pay higher interest rates SMEs hope the Lao government can ask banks to consider improving the lending process in an easier way, thereby enabling SMEs to grow faster Laos joined the WTO in 2013 and continues to integrate with its ASEAN neighbors through the ASEAN Economic Community The following countries have granted Common Priority System (GSP) status to Laos: Australia, Belarus, Canada, Iceland, Japan, New Zealand, Norway, Russia, Switzerland, Turkey, Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Germany, Greece, Finland, France, Hungary, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom The following items provide duty-free treatment under the LDC for Laotian goods: Chile, China, Taiwan, the Republic of Kyrgyzstan, Tajikistan, and Thailand Laos has also signed trade agreements with all nine other ASEAN members and participated in a series of negotiations as a member of ASEAN Laos has also signed many bilateral agreements with Vietnam, China, Cambodia, Burma, Thailand, North Korea, Mongolia, Malaysia, Russia, India, Belarus, Argentina, Kuwait, and Turkey The World Trade Organization (WTO) in its annual Trade Profile 2020 publication noted the global trade ranking in 2019, Laos ranked 107th in exports and 119th in terms of imports of goods in the world In terms of services, Laos ranks 128th in terms of exports and 131st in terms of imports Laos' economic freedom index is 53.9, making it the 141st free economy in 2021 (Source: Heritage) The index fell 1.6 points mainly due to a decline in free trade Laos ranks 32nd out of 40 countries in the Asia-Pacific region and has a lower economic freedom index than the regional and world average The Lao government began decentralizing control and encouraging private enterprise in 1986 The country's economic growth averaged more than 6% per year between 1988 and 2008, and it can be said that Laos' growth rate reached the fastest rate in Asia, averaging more than 7% per year for much of the past decade The export value of Laos in 2019 reached 5,764 million USD and imports reached 6.252 million USD, a deficit of 488 million USD In terms of services, in 2019, Laos exported 1,101 million USD, imports reached 1.274 million USD, a deficit of 173 million USD Thus, the total balance of import and export turnover of Laos reached a negative growth of 661 million USD in 2019 The export value of Laos in 2019 reached 5,764 million USD and imports reached 6.252 million USD, a deficit of 488 million USD In terms of services, in 2019, Laos exported 1,101 million USD, imports reached 1.274 million USD, a deficit of 173 million USD Thus, the total balance of import and export turnover of Laos reached a negative growth of 661 million USD in 2019 LAOS TRADE BALANCE FROM 2014 TO 2019 2014 2015 2016 -0.5 2017 2018 -0.79 -0.87 2019 -0.49 -1.13 -0.17 -0.66 -1.61 -1 -2.02 -0.19 -0.34 -0.23 -1.13 -1.1 -1.32 -1.5 -0.39 -2 -2 -0.23 -2.25 -2.5 Goods 2014 2015 2016 Service 2017 Total 2018 2019 Investment activities between Vietnam and Laos According to statistics on the trademap.org (ITC International Trade Center), Vietnam is the third largest supplier of products to the Lao market and the third largest partner to import goods from Laos According to statistics of the General Department of Customs, in 2020 alone, the total value of import and export of goods between Vietnam and Laos reached 1,030 million USD, down 11.5% compared to 2019 In particular, the export of goods of Vietnamese enterprises to the Lao market reached 572 million USD, down 18.6% compared to 2019, accounting for 0.2% of the total export value of Vietnam to the world In the opposite direction, imports of goods from Laos reached 458 million USD, down 0.7% over the same period, accounting for 0.17% of the value of Vietnam's imports from all trading partners In the period of 2016-2020, Vietnam's trade balance held a surplus of more than US$100 million due to the situation of super-continuous exports to Laos In 2020 alone, both exports and imports will be reduced due to the impact of covid-19 Vietnam and Laos export, import turnover, and trade balance from 2016 to 2020 800 702 700 595 600 500 400 572 520 478 462 437 346 458 369 300 241 200 100 132 151 158 2016 2017 2018 VN exports to Laos 114 2019 VN import to Laos 2020 Trade balance - Some of Vietnam's main export products to Laos in 2020: Leading among Vietnam's exports to the Lao market in the period of 2016-2020 is iron and steel of all kinds According to statistics of the General Department of Customs, In the face of opportunities and challenges in the current situation, without breakthrough decisions on economic institutional reform and innovation of science and technology management mechanisms, strong measures to strengthen the capacity of science and technology of Laos, the risk of economic and scientific and technological lag is further and long-term dependence on sources foreign technology is inevitable 2.2 Micro-environment analysis – Porter’s Forces Model 2.2.1 Overview of the telecommunications industry in Laos International economic integration gives Vietnamese enterprises the opportunity to integrate into the world economy and affirm their position in the international arena In this context, overseas investment is becoming an inevitable direction of businesses in general and businesses in the telecommunications sector Vietnam's telecommunications market is now almost saturated with 90 million subscribers, of which nearly 90% of the market share belongs to large enterprises such as Vinaphone, MobiFone, FPT In the near future, the revenue of the telecommunications industry will be difficult to mutate, the number of consumers will increase not much The price is getting cheaper, the market share cake continues to shrink, the use of frequency resources, digital warehouses are difficult when the telecommunications market has the presence of more and more new service providers Therefore, overseas investment is the option that Vietnamese telecommunication enterprises are interested and selected Military Telecommunications Group (Viettel) is one of the leading enterprises in Vietnam investing in Laos, contributing to the development of telecommunications in your country Viettel has contributed to building a large-scale and widespread telecommunications infrastructure system, bringing telecommunication services from luxury to affordable to the people of the country "million elephants" Currently, Vietnam has invested in more than 50 countries and territories, but with a fast-growing economy, Laos remains a large and important investment market for Vietnamese businesses With a peaceful foreign policy, friendship, cooperation, and opendoor policy, strengthening integration with the region and international prestige and the position of the Lao PDR is constantly improved in the region and in the international arena Currently, Laos establishes diplomatic relations with 130 countries, is a member of many regional and international organizations (United Nations, ASEAN, ASEM, WTO ) In recent years, Laos' investment environment has been improving positively in an increasingly open direction and in line with international practices Laos is a strategic area both economically and nationally security for Vietnam In 1993, Vietnam began implementing projects in Laos To date, there are more than 400 projects with capital of over $4 billion In the field of communication, Laos has always identified the telecommunications industry as an important infrastructure in promoting economic construction as well as improving people's living standards To ensure the rapid development of the Lao telecommunications industry, the Lao government has adopted a series of measures such as increasing the investment from the government budget, encouraging foreign companies and domestic private enterprises to participate in the construction of relevant infrastructure Currently, Laos is a market with a lot of potential and very attractive for foreign telecommunications enterprises Therefore, the chances of success of Vietnamese telecommunication enterprises investing in Laos are great 2.2.2 Competitors Laos was one of the last Indochinese nations to join the telecommunications market, with competition only beginning in 2002 with a small number of providers However, the Lao telecommunications market is expanding at a rapid pace The Lao telecommunications industry started to flourish in early 2003, thanks to international operators' engagement and investment funds; the number of users surged sevenfold in only two years The total length of fiber optic cable in Laos has reached 51,000 kilometers by the end of June 2012, with 6780 mobile phone base stations serving 138 districts across 17 provinces and cities Laos, where a 3G network has reached 2000 villages According to the global digital overview study issued by We are social organization and Hootsuite in 2020, 79% of the Lao population now utilizes mobile phones, and internet penetration is 43% Notably, the percentage of usage of social media networks, particularly Facebook, amounts for 43%, implying that everyone in this nation who has access to the internet utilizes a social network Furthermore, with the expansion of telecommunications infrastructure, Laos' internet speed reached an average of 25.54 Mbps, with a 68 percent growth in broadband internet connection speed each year In the setting of a 1.5 percent annual population growth rate, the number of mobile devices in the nation climbed by 1.3 percent between 2019 and 2020, and the number of internet users increased by 6.5 percent During the same time period, social media engagement climbed by 12% Unitel's competitors Supplier Delivery time Service provided Lao Telecom Co Ltd (LTC) 1994 Mobile, Internet Enterprise of Telecom Lao (ETL) 2002 Mobile, Internet Star Telecom Co Ltd (Unitel) (51% thị phần) 2009 Milicom Lao Co Ltd (Tango, Tigo, Beeline) Mobile, Internet 2003 Mobile, Internet (Wimax Sky Tel & Net Co Ltd 2006 Internet (Wimax) Planet Co Ltd 2000 Internet (Wimax) Lanexang Internet Co Ltd 2001 Internet (Wimax) 2.2.3 Barriers to entry into the industry In February 2018, the Lao Government issued Order No on improving business coordination regulations and mechanisms in the Lao PDR, with the expectation of improving Laos' position in the World Bank's Business Ease ranking As a result, the process of establishing a business is faster due to the simplification of the procedures for applying for licenses and registering company seals from 174 days to less than 40 days Tax administration has always been considered one of the biggest barriers to trade in Laos in surveys for small and medium-sized enterprises The World Bank ranked Laos 154th out of 190 economies in 2019 in terms of ease The Lao government has simplified its tariff structure and is gradually revising non-tariff barriers Laos, which placed a top priority on trade facilitation, was one of the earliest countries to ratify the WTO's Trade Facilitation Agreement Laos' import tax system aims to promote the import of input materials for investment and production, while protecting domestic production and limiting luxury imports A foreign investment item does not have to pay import duty on the import of machinery and equipment for production Moreover, in some special economic zone’s inputs not require tariffs as long as the final product is exported from Laos Raw materials and imported intermediate goods for imported alternative industries may be treated specially as prescribed Lao PDR's tariffs are based on the ASEAN Harmonized Tariff List (AHTN 2012), subject to standard ASEAN import tariff rates ranging from to 40%, excluding nonASEAN countries These taxes are regulated by the Customs Department The excise tax rate ranges from 5-90% for many items The Lao government has phased out sales tax over the past few years and replaced it with a Value-Added Tax (VAT) regime, although VAT is still applied inconsistently Additional information about taxes can be referenced at the Tax Department, Ministry of Finance 2.2.4 Consumer bargaining power Laos, with a population of about million people, is a market with high demand for quick meals, cereals, plastic items, sanitary wares, and, in particular, telecommunications-related services However, in comparison to other ASEAN nations, Laos' telecommunications industry is still in its early stages, with usage being low and concentrated mostly in major cities Because of the low level of education and the small population, the Lao people's buying power and income are low Furthermore, Laos lacks expertise in this subject; there are relatively few colleges in Laos that provide specialized degrees in information and communication technology, and the majority of schools not satisfy international standards With the introduction of joint venture providers with other nations beginning in 2008, the proportion of individuals with access to telecommunications services such as the Internet and telephone expanded considerably Along with the fast expansion of the economy, Laos' demand for telecommunications services tends to rise quickly, necessitating the use of new technology by providers to meet the people's requirements 2.2.5 The bargaining power of the supplier In addition to traditional multinational telecommunication equipment suppliers, more and more manufacturers, providing of new telecommunication equipment to offer equipment sales with many policies such as incentives, discounts, late payments So, currently the bargaining capacity of suppliers is weak if companies also benefit in negotiating and selecting their suppliers Alternative products and services are products and services that can satisfy the same needs as domestic products and services The telecommunications industry is open so in the near future there will be alternative products that will help customers increasingly satisfy their needs: Communication "encroaches" on telecommunications plans to access the Internet via cable television network (with the advantage of broadband) With the development of technology, telecommunications-information and communication technology enterprises began to become direct competitors of each other Internet access via tv cable network can reach download speed of 54Mbps and upload to 10Mbps At the same time, through this transmission system, in addition to television and the Internet, customers can also access many other entertainment services such as online gaming, watching tv on a computer, tv on demand 2.2.6 Threat of substitute products Telecommunication services is distinctive Therefore, there are no substitute products 2.3 SWOT analysis The SWOT model is derived from the four letters strengths, weaknesses, opportunities, and threats, and it provides a tool to help analyze strategy and review and assess the risks and orientation of a company or a business project We use the SWOT model to help UNITEL with business planning, strategy development, competitor evaluation: UNITEL (S) Strengths  Long term development and well (W) Weaknesses  Limitations in human reputation in Do not have market resources management, share in Europe telecommunication especially in foreign industry in Asian market  High quality services  Stable development  Operating in over 13 countries around countries  Owned-state company with military manner and the world, provides services to 72 (O) Opportunitie s (T) Threats inflexible working million customers environment  High corporate social responsibility  Lao's government promotes telecommunication services in this market  Relationship between Vietnam and Laos  Limited telecommunication services in this country  Unstable economy PART VIETTEL'S INTERNATIONAL BUSINESS STRATEGY AND ENTRY INTO THE LAOS MARKET 3.1 Viettel's global standardization strategy In 2006, Viettel Group decided to extend its business to overseas looking for more potential markets Viettel Global was established October 2006 with a vision and responsibility of turning Viettel into a strong telecommunications group on international stage After years of development, Viettel Global is one of the biggest Vietnamese overseas investors It is now operating telecommunications companies in countries across Asia, Africa and Asia with total population of over 175 million and 13 million customers Its total revenue for 2014 was US$1.2 billion Viettel embrace a sustainable investment strategy that balances the benefits of corporate, governments, the people and customers We invest in strong network infrastructure covering nationwide and widespread supplying chain to every village so that our services are accessible to all people in those countries regardless of their locations and income conditions Besides, thanks to the long-term experience from operating telecom business in Vietnam and firm financial foundation of Viettel Group, we can master and apply the latest technology and diversify our services Viettel Global is proving its competences through the success of its subsidiaries when most of them taking the leading positions in their national telecom markets in term of subscribers/ revenue/ infrastructure, for instance, Metfone in Cambodia, Telemor in Timor-Leste or Movitel in Mozambique By the end of 2017, nearly 40 million customers from international markets used Viettel’s mobile services, broadband Internet, landlines and wireless phones As mentioned earlier, as of June 2018, Viettel attained profit in markets, of which markets including Laos, Cambodia and Timor-Leste has returned the initial Capital investments To date, Viettel Global is generating profits of four-to-five times higher than the initial investments in these three markets (Thanh Thu, 2018) Encouragingly, Viettel was the top telecommunications provider in terms of market share in five countries, including Cambodia, Laos, Timor-Leste, Mozambique and Burundi (Viettel Global, 2017) Viettel Global’s revenue from telecommunication services on foreign markets has grown rapidly and continuously The annual growth rate was 21.5% in 2016, which was more than double that of 2015, and increased by 2.5% at 24% in 2017 (Viettel Global, 2017) The number of customers in foreign markets was 13% in 2017, which was four times higher than that of the global average (about 3%) New African markets continue to see strong growth rates at 1,343% for Viettel Tanzania, 43% for Viettel Cameroon 43% and 42% for Viettel Burundi (Minh Anh, 2018) In Myanmar - the newly-penetrated market, Mytel (also known as Telecom International Myanmar Co) had more than million subscribers just in over a month after the official launch on June 9, 2018, surpassing Viettel Global’s target of to million subscribers in the whole 2018 (Tu An, 2018), contributing to Viettel’s business achievements on foreign markets 3.1.1 Selecting target markets and target groups of customers Prior to the decision to invest in and penetrate into the international market, Viettel Global had conducted intensive research on the potential and development of telecommunication market in different regions o f the world The data compiled in 2015 on mobile-broadband telecom services, one of Viettel Global’s strengths, showed that there were over billion mobile cellular subscriptions worldwide, up from less than one billion in 2000 (ITU, 2015) Correspondingly, the annual growth rate was over 14% Also as of 2015, the number of mobile cellular subscriptions per 100 inhabitants worldwide was 46.1 while that of developed countries was 81.3 Whereas, these figures for the AsiaPacific region and Africa were only 42.3 and 17.4, respectively (ITU, 2015) According to Viettel Global (2015), the number of mobile subscriptions in the world between 2015 and 2019 is forecasted to increase by 1.3 billion (from 7.2 billion by the end of 2015 to 8.5 billion by the end of 2019), equivalent to an annual growth rate of 4.2% In this period, the 20 fastest-growing markets are predicted to be emerging markets in Africa and the Central and South Asia With the highest growth rate of 7.4% annually, Africa is considered a high potential market Forecasted annual growth rates of mobile subscriptions in the world and by region, (2015-2019) Africa 7.40% Middle&S outh As ia 5.10% Middle East 4.30% S outheast As ia&Oceania 3.90% Latin America&Caribbean 3.10% North America 3.00% East of Europe West Europe 1.90% 0.90% T he World 4.20% Source: Viettel Global (2015) The first factor that Viettel Global considered when selecting a target country was the potential of telecommunication Service business and its political, cultural and social environment They can have different impacts on the telecommunication market development Subsequently, the competitive environment, potential competitors, threats from substitute Products or pressures from customers and suppliers and so on were weighed up In addition, the natural environment factor that has an impact on input, output and the speed of implementation was also taken into account In South Asia, Laos, Cambodia, Timor-Leste and Myanmar are the markets with high potential and low barrier to entry In addition to the advantage of similarities in the cultural, social and natural environment, the density of mobile cellular subscriptions of these countries is low compared to the regional average and those of the Philippines and Vietnam More importantly, the annual growth rates of subscriptions in these countries were very high Table Mobile cellular subscriptions per 100 inhabitants 3.1.2 Market penetration and investment strategies In early 2018, Viettel Global established 10 subsidiaries and joint ventures in 10 foreign markets, of which subsidiaries and branches were directly invested by Viettel Global The others were joint ventures between Viettel Global (holding more than 40% of charter Capital) and major local enterprises Table Viettel Global’s subsidiaries, their brands and methods of investment in 10 countries Country Cambodia Enterprise Viettel (Cambodia) Pte., Ltd Brand Metfon Method of investment Direct investment Laos Timor-Leste Star Telecom Co., Ltd Viettel Timor Leste e Unitel Joint venture Telemor Direct investment into Viettel Myanmar Unipessoal Lda Telecom International Mytel branch Joint venture (49%) Cameroon Burundi Tanzania Mozambiqu Myanmar Co Viettel Cameroun Viettel Burundi S.A Viettel Tanzania Ltd Halotel Movitel, SA Nexttel Lumitel Halotel Movitel Joint venture Direct investment Joint venture Joint venture e Peru Haiti Viettel Peru SAC Natcom SA Bitel Natcom Direct investment Joint venture 3.2 Viettel's entry into the Laos telecom industry Viettel Global selects a joint venture in Laos It established a joint venture with Laos Asia Telecom Company, namely, Star Telecom, to create the Unitel telecommunications brand, with Viettel Global contributing 49 percent of the capital investment in the form of equipment 3.2.1 Company Information Company name: Star Telecom Co, Ltd Address: Nongbone road, Phonxay village, Saysettha district, Vientiane Capital, Lao P.D.R Website: www.unitel.com.la Brand name: Unitel “Uni” is extracted from the word “United” – which has similar meaning to solidarity This is a social value highly respected by Laotian people Unitel is created as a telecom network to connect the Laotian and bring them a better life Established: 2007 Service launching: November 2009 Employees: 1.540 staffs Services providing: Mobile, Internet, fixed broadband Unitel is the leading mobile operator in Laos accounting for 47% market share with 1.8 million customers, owning the biggest telecom network in terms of:  Network infrastructure with more than 21,000 km fiber optical cable and 3,100 base stations (2G and 3G)  Distribution channels with 143 shops, 174 agents and sales points, 400 sales people  Customer care system with 200 agents/shift at the same time  International Awards achieved: Best Operator in Emerging Market by World Communications Awards (2012) Star Telecom created 3,500 km of fiber-optic transmission network for 17 cities throughout the nation in less than a year, which is joined by Viettel Vietnam and Viettel Cambodia to establish a Vietnam-Laos-Cambodia Central transmission line Star Telecom completed the greatest fiber-optic transmission network of 17,000 km and 2,500 transmitters in July 2012, covering all districts and being utilized by 95 percent of Laos' population It was a similar approach to Cambodia's of investing in high-quality, systemized technology infrastructure to deliver the greatest services for local citizens by making communications services more accessible 3.2.2 Viettel Global selected a joint venture to enter the Lao telecoms market The entry modes always play an important role for any organization that wants to enter international trade and work place They are very important in determining the profitability and success of an organization or a business entity It sets the objectives, goals, resources and policies that always guides the operations international business It aims at ensuring that an organization attains sustainable growth in the global markets The main three entry modes to international markets will include: The factors that influence the entry modes are the key issues that an organization has to check before it involves itself in selecting the way its going to enter the foreign market Based on the models, certain factors are suggested for Viettel's choice to choose a market entrance option in Laos The most appropriate market entrance strategy for Viettel should be joint venture for various reasons: a Government assistance Viettel Global has a significant edge in the Lao market because to governmental backing and economic collaboration between Vietnam and Laos Viettel is a state-owned enterprise With government backing, notably in the telecommunications sector, Viettel may find it simpler to penetrate the new market Opening a joint venture with the Lao government's telecom business might be a huge chance for Viettel to compete with other current market competitors b Lower the expenses Because of the party's existing infrastructure, Viettel just has to engage in further modifications to deliver better quality telecom services generally to suburb regions, requiring less expenditure As a consequence, the costs of modifications and innovations may be reduced c Suit the market's culture Viettel has successfully implemented the worldwide business model of joint venture in countries across the globe With the strategy of transforming the brand name into the local language and culture, the joint venture market entrance method may be the best option, as it has a high potential of agreement from the parties that share the same goals and achieve the same success INCLUDING In conclusion, internationalization currently is a business strategy that a lot of companies around the world chooses to expand their operations Without a doubt, this strategy could bring a huge of benefits to the enterprises, extent the market share and increase sales and profit However, it also brings challenges and obstacles, required the companies to have strategic plans to overcome Viettel Telecom Corporation has also gained a lot of success in internationalization The company expands its market share in over 13 countries in Asia, Africa and America areas, becomes one of the largest telecommunication providers in Southeast Asian area In each country, Viettel provides a new brand name of joint venture, provides high quality telecom services to local citizens In the potential context of global economy, Viettel can consider opening a new market into global The most suitable selected market is Laos Based on analysis of market analysis (both macro-environment and micro-environment) using theoretical frameworks such as PESTLE analysis, SWOT and Five Forces Models, a lot of reasonable characteristics that makes the company to choose Laos, for example, the supports from host country's government, the current situation of society and economy of the host country, the convenience in relationship between Vietnam and Laos, the current poor quality of telecommunication industry in the host country market, etc After choices of market selection, the company should focus on choosing market entry mode for the most suitable internationalization strategy The chosen market entry mode is joint venture which is a successful business model that Viettel has been operating in countries around the world With the huge advantages from joint venture ownership model, it could be the most suitable one for Viettel to enter Laos market ... together, stand together on the path of renovation and development of the country in the direction of socialism In the economic field, up to now, trade agreements have been signed with the aim of. .. tradition of friendship Under the leadership of the two Parties, the two peoples have "committed to suffering" throughout the historical journey against the aggression of the empires as well as in the. .. in the country 10/2009: official launch of telecommunications services in Laos 2010 2/2010: establishment of Viettel Overseas Co., Ltd to implement the investment project on the expansion of the