CHIẾN lược đưa VIETTEL lọt vào TOP 10 CÔNG TY đầu tư QUỐC tế lớn NHẤT về VIỄN THÔNG en

“STRATEGY FOR ENTERING VIETTEL ON TOP OF 10 BIGGEST INTERNATIONAL INVESTMENT COMPANIES ABOUT TELECOMMUNICATION” GROUP VI NGUYEN QUAN LAP LE VAN MANH BUI THI MINH NGUYET HOANG VAN THANH DINH NGOC TUAN TABLE OF CONTENT I INTRODUCTION OF AN ENTERPRISE II HISTORY OF ESTABLISHMENT AND ACHIEVEMENTS III FOREIGN INVESTMENT STRATEGY Foreign investment is an indispensable and objective trend of Viettel The aimed market of Viettel Difficulties and challenges Initial achievements Viettel’s foreign investment strategy until 2020 5.1 Targets of the strategy 5.2 Some trategies Viettel uses when entering international competition 5.2.1 Strategy of price competition 5.2.2 Strategy of differentiation 5.2.3 Strategy of branding IV PROPOSING SOLUTIONS TO IMPLEMENT THE STRATEGY AND IMPROVE CAPACITY OF GLOBAL COMPETITION Solution about human resource Solution about organization Solution about equipments and products Solution about application of information technology Solution about thorough and fast management following military style Solution about creating business culture V CONCLUSION VI REFERENCES I INTRODUCTION OF AN ENTERPRISE - Headquarter: No.1, Giang Van Minh str, Kim Ma Ward, Ba Dinh district, Hanoi - Full name: VIETTEL TELECOMMUNICATION GROUP - International transaction name: VIETTEL GROUP - Abbreviation: VIETTEL - Charter capital of the Group: 50,000 billion VND (fifty thousand billion VND) - Main business sectors: Sales of telecommunication services, telecommunications information technology in the country and abroad; surveys, consulting, design, installation and maintenance of telecommunications and technology information; production, import and export business, material supply, telecommunications equipment and information technology II HISTORY OF ESTABLISHMENT AND ACHIEVEMENTS In 1989, General Information Equipment Electricity Company - the predecessor of the Military Telecom Corporation (Viettel) was established In 2000, Viettel joined in Vietnam telecommunications market with voice service using IP technology In 2001, it provided international VoIP service In 2002, it provided Internet access service In 2003, it provided fixed telephone services (PSTN) International satellite gateway In 2004, it provided mobile phone service International optical cable gateway In 2006, it started implementing investment strategies abroad It was the first enterprise which broke monopoly in Telecommunications in Vietnam, ranks 83rd of 100 largest telecom brand in the world (voted by Imforma in 2008), its mobile network developed fastest in the world (voted by Wireless Intelligence Magazine) and it was the best telecom service provider of the world in developing countries (voted by World Communication Awards in 2009) Now it is the number-one enterprise about mobile phone in Vietnam market with over 40 million subscribers and accounting for over 40% of market share There are about 30,000 staffs now In 2011, its revenue reached nearly billion USD and nearly billion USD of benefits III FOREIGN INVESTMENT STRATEGY Foreign investment is an indispensable and objective trend of Viettel Viettel decided to invest abroad stemming from philosophy and vision If a company lacks its growth, it is very dangerous because of the lack of opportunity for people to strive Besides, people are not in the challenge will be rapidly corrupted Therefore, Viettel need to grow, but if it just look at a limited market with over 80 million people in Vietnam, until one time, it will stop growing On the other hand, when looking in the main flow of telecommunication today, we can see that the most prominent point is trend of combination and mergence Nowadays, there are about 700 operators, but it’s expected that during some next years, it will be only twodigit number So there will be about 600 operators disappearing because of no market and no subscriber These trends directly relate to Viettel, because without foreign investment, market expansion, not continue to grow and no amount of subscribers, it will be among the 600 operators The aimed market of Viettel Viettel divided the telecommunications market in the world into three categories such as saturating market, developing market and nascent market We can see that nascent market is the most potential but there is not many countries in the world such as Myanmar, North Korea and Cuba Developing market has about 60 countries with billion people Viettel currently focuses on promoting and looking for investment opportunity in these countries with participation of registering license bid and acquisition of small companies which have licenses Most of countries which Viettel focuses on looking for opportunity of investment are developing markets about both economy and telecommunications This is also advantage of Viettel when it contacts them In total of 30 investors of international telecommunication, Viettel is the poorest Because it is poor and grows up in a poor market, Viettel has many experiences to business in difficult markets, it can understand and share things which developing countries are worrying about Telecommunication is a normal product, not a luxury service Development of a country partly depends on telecommunication, not only can be explosive when GDP reaches a certain level This is right in markets in Laos and Cambodia, although GDP is still low, when Viettel invests, and gives out low charges and product to people, telecommunication is boomed, led to the development of society and economy This is also the things which the government as well as people in developing countries need and hope to have from foreign investors With this empathy, Viettel considers investment negotiation is sharing experience to bring sustainable development to a country through investment of telecommunication Difficulties and challenges As soon as going abroad, Viettel met many difficulties because system of law, finance and management of Vietnam was still not ready for enterprises in Vietnam to invest in foreign countries The bigger difficulty is comparing to other international groups, Viettel is 10-20 years later than them and still very nascent in both economic potential and experience, has difficulties about language and culture barriers, application for telecom license, strong competition in the investment market and fast declined revenue trend On the other hand, Viettel has to compete with big groups in the world such as Vodafone, Telenor, Orange,etc This is also a big challenge for Viettel Initial achievements Currently, the group invested in continents (Asia, Africa, America) in countries such as Combodia, Laos, Haiti,, Mozambique, Peru and Timor Leste Now it is promoting investment in Tanzinia, Argentina, Cameroon, Dominica, Ukraina,etc Metphone in Cambodia and Unitel in Laos of Viettel ranked 1st position about network infrastructure and subscribers In 2011, foreign investment brought to Viettel over 10,000 billion VND and 1,192 billion VND of profit Viettel’s foreign investment strategy until 2020 5.1 Targets of the strategy From now to 2015, Viettel will invest in 10-15 foreign countries with a market of 300400 million people, bring a revenue of 2-2,5 billion USD and be on top of the 30 the world’s biggest telecommunication service providers and one of the 10 biggest companies which international investment of telecommunications Until 2020, in the market where Viettel invests, Viettel telecommunication network will be ranked No or No in that country 5.2 Some trategies Viettel uses when entering international competition 5.2.1 Strategy of price competition Viettel uses “low-cost strategy” The service provider who was born later always has to be better than predecessors One of the best ones is price It’s expected that the price Viettel supplies is about 15-20% cheaper than its competitors This strategy was applied sucessfully in markets in Vietnam, Laos and Cambodia In the Vietnamese market, Viettel is an enterprise which was established later, however with popular strategy of telecommunication service, it contributed to bring Viettel from the 4th position to the 1st position about mobile phone in Vietnam and reduce telecom charge from 3-5 times In Laos and Cambodia, low price also contributed to bring Metfone in Cambodia and Unitel in Laos to the st position about mobile phone after 2-year service supplying (2011) 5.2.2 Strategy of differentiation When Viettel invests in foreign countries, Viettel is the enterprise goes after Going after and hoping to better than what others did is very difficult, but to different fro others is easier, and about nature, doing something different from others is meant doing better than others No difference is meant dead Therefore, Viettel chooses method different from other companies and will continue to differently with more creative and effective targets Viettel’s competitive strategy is blue ocean strategy, it’s meant that it creates products which others don’t have, creates new markets, not compete with them in traditional markets To create difference, Viettel is persistent with the strategy: - Strategy of investment following trend as “technology’s first, business’s next”, it strarts from opinion of telecom business which is infrastructure business Telecom’s product is infrastructure To bring the product to customers, it has to invest in infrastructure much In Vietnamese market, in 2000 when starting to join in telecom market, Viettel’s infrastructure can be considered as “number 0”, but only after years, Viettel was up to st position about telecom network infrastructure in Vietnam, now Viettel had over 50,000 BTS station, over 154.00 km fiber optical cable, accouting for over 40% of telecom infrastructure in Vietnam, it is the network which covers the deepest, the widest and the best quality in Vietnam In Cambodia, Laos, Haiti and Mozambique, when opening, Viettel’s network infrastructure is equivalent to the strongest competitor, and after 1-year opening, Viettel rised to 1st position about network infrastructure in those markets And these created a boom of Viettel’s subscribers after opening as in Mozambique, after 2.5month opening, Viettel had million subscribers - It implements a philosophy of any (anytime, anywhere, anybody, anyprice) Unlike other vendors who just focus on high-income customers Viettel care about not only customers who can pay but also customers who have requirement to use service While other companies often invest in where their business comes, Viettel selects network of strategy first and business later While other companies consider cties as main markets, Viettel focuses on markets in rural areas While other companies just concentrate on domestic market, Viettel go abroad soon While other companies focus on only customers who afford to pay, Viettel cares about investment in customers in the future While other companies think about subscriber density, Viettel thinks that each person has a cell phone, each household have a fixed telephone, an internet line with broadband and a high-quality TV cable - Doing strictly the philosophy “business associated with social responsibility” such as free internet for schools, support for social, charity and humanitarian activities Foundation for development of an enterprise is society Viettel commits to reinvest to society through linking business production activities with social and humanitarian acitivities Viettel supplied free internet for nearly 40,000 schools and educational institutions in Vietnam, and in markets in Cambodia, Laos, Haiti and Mozambique, Viettel also commits to support free internet for schools - Strategy "use human resources in a sentence": Unlike other investors who focus on hiring foreign experts who have professionals to ensure works instead of training a highquality labour force for the country, Viettel undertakes the way as appointing the best experts to build an apparatus, train and transfer knowledge The last target is that after years of implementation, that apparatus have to be run by the local people from technology to business This way will be appriciated by the people because of real value which Viettel bring to their country 5.2.3 Strategy of branding When investing abroad, Viettel did not use brand of Viettel, it built a brand of the own company in that market For example, in Cambodia, although it is 100% of Viettel’s capital, Viettel did not use its brand, it invested hundreds of thousand USD in reseaching and selecting the name of Metfone The word “Met” has the way of pronunciation like the word “friend” in Khmer language At the same time, Viettel determines that its business production in that market has to be run by the local people to contribute to promote social economy in general and for everyone to see that Metfone is Cambodia’s network and for benefit of Combodian people With the business philosophy and the way “following the home’s custom enter”, Viettel believes that difference of culture is not a big problem IV PROPOSING SOLUTIONS TO IMPLEMENT THE STRATEGY AND IMPROVE CAPACITY OF GLOBAL COMPETITION 1 Solution about human resource From now to 2020, Viettel determines to invest in about 20 countries Viettel identifies the key apparatus to build and implement network infrastructure and business organization as Vietnamese employers and employess, after that it gradually transfers to local people Recently, Viettel has had about 100 officials and staffs who are working in foreign markets Until 2020, Viettel will need about 2000-3000 officials and staffs who work in foreign countries Each year, Viettel will expand 1-2 new markets more, that means Viettel will need at least technical and business frameworks from the Board of Director to departments and branchs With an opinion of bringing the best things to invest in foreign countries while still keeping the st position in the domestic market which is having increasingly fierce competition So human resource is really a challenge with Viettel To meet a requirement of human resource to invest abroad, Viettel need to continue to attract excellent students at universities in domestic and foreign countries Annually, it select excellent employees and open classes to train managers to supplement for markets On the other hand, it has to continue to improve policies with officials and staffs who work abroad such as salary, bonus, shifting time, housing policy,etc Besides, it need to well communication for every officials and staffs to have desire to bring Viettel to become one of the 10 biggest international investment company about telecommunication, have common awareness of going for business in foreign countries is a honor, responsibility and obligation of each Viettel person Going with professtionals, quality and capability, during the next years, it should give out mandatory requirement to officials and staffs of Viettel to have ability to use proficiently at least one foreign language (English) Solution about organization Expansion of Strategy Department for promotion of international investment and Group Legal Department for ensuring enough capability to research, evaluate and advise for the Group about investment strategy in markets and direction for supporting to domestic companies and companies which are in markets where it implement international investment strategy The new Investment Promotion Department has only people and Legal Department has people, their capacity still hasn’t met a requirement of mission In coming years, the Group concentrates on investment promotion in Africa and America where it’s a half of a round of the Earth far from Vietnam, so it will meet many difficulties in direction and management Therefore, it is necessary to establish more Technology Center, domestic global business and the centers in Africa and America to support timely to implement market with network infrastructures and business organizations Solution about equipments and products To improve competitiveness, initiativeness, prevention of depending on partners, in coming years, Viettel need to continue to promote production research of telecom equipments, including production of fiber cable, terminal (USB 3G, telephone), BTS station, Private Branch Exchange,etc Now Viettel has research institute, hardware manufacturing companies and software center It produced successfully USB 3G, telephone, fiber cable, copper cable, sim, smart card,etc This is one of the key strategies of Viettel Besides telecommunication service, Viettel should continue to encourage member companies such as Viettel Post joint-stock Corporation (Viettel Post), Viettel Store Trading Company (Viettel Store),etc to invest in business of post service and retail in markets which Viettel invests in Now Viettel Post implements business investment in Laos and Cambodia Solution about application of information technology Viettel promotes international investment, it’s similar to increasing bigger scale, wider scope and more complicated nature To improve effectiveness of management and administration, Viettel has to promote application of information technology (IT) Now entire software of technology and business manggement is also designed by Vietnamese people The board of Director in the Group and Departments are daily able to se quality and effectiveness of implementation of network infrastructure and business results in markets Viettel recently has had over 1000 points of television, it can organize briefing meetings and online operation management in domestic districts and provinces in foreign markets Viettel should continue to promote application of IT to create competitive advantage in global market Solution about thorough and fast management following military style Viettel identifies that time is money Viettel was established later, to have its big markets, it has to be fast It had to decide, invest, install, develop supscribers, change and adapt fast, and many more others quickly to create Viettel’s appearance today With other enterprises, transfering personnel from a province to others, even change positions in a department may take a week, even a month, and transfering personnel to go abroad may take many months, but Viettel can it during a day if it’s necessary,etc Viettel should keep maintain fast and radical management following military style to create competitive advantage on the international scale Solution about creating business culture Viettel is expanding its investment to global market A problem of cultural difference and how to work in markets are always the biggest challenge which investors often face with, including Viettel This difference can affect entire business production activities in markets, specially in a relationship between investors and local personnel, and between the company and local customers Although it has difference in the way of working and language in Laos and Cambodia, nature is still Asian culture But with American market such as Haiti and African market such as Mozambique at the next time, difference is bigger and more clear For example, in Laos, habit of not working overtime and taking rest whole weekend of local staffs make Viettel to meet many difficulties to ensure for 24/7 customer care like telecommunication companies often In comminication and working, staffs in Laos prefer to speak softly and not familiar with military style as to obey orders Therefore, Viettel’s staffs decided to change both themselves and the way of looking and working of local staffs Or for the lastest example, a Haiti’s delegation went to visit Viettel in Vietnam When being asked that what the thing which he think it’s the most impressive after 6-month working with Vietnamese team is, the best technological staff of Haiti answered that he was culture shock, “Viettel’s people work from morning to night, they have high discipline and they treat together as teammates on battlefield Even leaders also work as engineers, not be similar to me with only direction in air-conditioned room But now I change because I was Viettel’s person, please be comfortable, because we are working like Viettel’s people” Just like in Vietnam, Viettel in foreign countries has been creating its own business culture Just with passing for local staffs enthusiasm and confidence in the job they do, it can have a community with common aspiration and remove the conflict of culture Viettel builds its business culture including core valuations, rules of treatment, standard of Viettel’s people, Viettel’s art of warfare, these are Viettel’s own characteristics, it need to be supplemented, improved and applied approciately in each of market to create global competitive advantage V CONCLUSION Globalization becomes an indispensable trend Enterprises in Vietnam whether or not also have to participate and be influenced by impact of globalization A question for enterprises is that what they should to expand their business on a global foundation the global competitive business environment Through the initial success of Viettel in foreign market, we can see that if Vietnamese enterprises have desire to become a multinational companies, with specific and different strategic goals, and enthusiatic spirit of team of staff, they can bring their products and services to conquer international market, and contribute to improve business and national brands VI REFERENCES A slide of the lecture “International Business Management” by Dr Larry R Williams; The document “Overseas investment strategy of Viettel” internal document www.viettel.com.vn http://www.mofa.gov.vn/vi/ http://vneconomy.vn/20100120092924851p0c10/viettel-dau-tu-ra-nuoc-ngoai-nhung-noi-dekhong-con-nua.htm http://doanhnhan.vneconomy.vn/20110208100937782P0C5/viettel-dau-tu-ra-nuocngoai-ky-thuat-di-truoc.htm ... 2011, its revenue reached nearly billion USD and nearly billion USD of benefits III FOREIGN INVESTMENT STRATEGY Foreign investment is an indispensable and objective trend of Viettel Viettel decided... Management” by Dr Larry R Williams; The document “Overseas investment strategy of Viettel? ?? internal document www .viettel. com.vn http://www.mofa.gov.vn/vi/ http://vneconomy.vn/2 0100 120092924851p0c10 /viettel- dau-tu-ra-nuoc-ngoai-nhung-noi-dekhong-con-nua.htm... investment market and fast declined revenue trend On the other hand, Viettel has to compete with big groups in the world such as Vodafone, Telenor, Orange,etc This is also a big challenge for Viettel