New markets for Vietnam's telecom giants
Core businesses decline
According to a recent report of the Ministry of Information and Communications, in the first half of 2022, the telecommunications sector earned revenue of 156,556 billion VND, only 0.6% up compared to the same period in 2021. The data shows that the core business of telecom operators is in sharp decline.
For the Vietnam Post and Telecommunications Group (VNPT), its consolidated revenue during this time was 26,828 billion VND, equivalent to the same period in 2021.
Meanwhile, MobiFone reported revenue of 15,094 billion VND, compared to 15,551 billion VND of the same period of 2021.
Viettel recorded a better result, as its revenue increased by 6.6%, and profit increased by 21.7% year on year. Viettel's telecommunications revenue achieved strong growth from foreign markets.
Specifically, Viettel's service revenue grew in all 9/9 markets over. Of which, 6/9 markets had double-digit growth including Movitel (Mozambique) 38.6%; Mytel (Myanmar) 79.6%; Natcom (Haiti) 28.6%; Lumitel (Burundi) 22.4%; Telemor (Timor Leste) 15.9% and Halotel (Tanzania) 14.2%.
Currently, the telecommunications industry is still fiercely competitive, with price wars which cause revenue and profit to decline. In particular, carriers have to compete with OTT (Internet-based content service), which has caused revenue growth in the telecommunications sector to "flatten" in recent years.
In particular, in 2021 and the first six months of 2022, the telecommunications industry faced difficulties due to Covid-19. In addition to production and business being affected, revenue and profit decreased, and major carriers had to perform epidemic prevention obligations.
Mr. Huynh Quang Liem, General Director of VNPT, said that direct impacts from global supply chain congestion, semiconductor chip shortage, and high input material prices have affected VNPT’s operations.
Mr. Pham Duc Long, Deputy Minister of Information and Communications, said the telecommunications sector is shrinking. The world is changing so this industry must move towards a new growth space. There is still a lot of development space, but there must be a new approach and new implementation. Businesses need to step away from traditional thinking, he said.
Digital transformation - a new door for telecommunications
In fact, telecommunications businesses were making changes for a few years before the telecom sector started to decline. Viettel, VNPT, and MobiFone have switched from traditional telecommunications carriers to information technology (IT) services and digital transformation services.
A Viettel representative said that in the field of IT solutions and digital services, this group has been promoting new services such as TV 360, Viettel Money, eSport, solutions for smart home and security cameras. In terms of e-commerce and logistics, Viettel has a strategy to invest in logistics infrastructure, and continue to maintain stable growth in the retail and distribution sectors.
Viettel has begun to introduce its technology products to foreign markets such as B2B services in Myanmar; cyberinformation security services in Germany; cooperation with Nvidia Technology Corporation (USA) to expand business systems with artificial intelligence (AI) companies; trade in telecommunications network equipment and information machines in Southeast Asian and South Asian markets; and export of fiber optic cables.
According to Mr. To Manh Cuong, General Director of MobiFone, MobiFone has launched a digital financial ecosystem and will expand e-commerce; develop fixed broadband services; and cooperate with new partners to provide digital transformation services such as banking and pay TV.
VNPT has identified itself as a digital technology firm that will lead the process of national digital transformation. VNPT has participated in digital transformation projects, developing information technology solutions for ministries, agencies and localities; and contributed to increasing the value of digital services and digital platforms to provide products and services to corporate customers for the development of the digital economy.
The "three giants" of Vietnam’s telecommunications industry are getting rid of the traditional fields to enter new ones.