VietNamNet Bridge- Viettel Group’s total overseas investment increased by 9 percent to nearly US$1.5 billion in 2015, while the global industry rate was only 2.3 percent (a fourth of Viettel’s), according to UK-based OVUM- a prestigious research and consulting firm specializing in global coverage of information technology and telecommunications industries.
Last year Viettel launched mobile networks in the three big African markets of Cameroon, Burundi and Tanzania.
Viettel achieved impressive annual growth compared with many other multinational telecom firms. For example, Viettel’s familiar rival in many markets, Vodacom – an African mobile service provider that is bigger and more experienced than Viettel - saw turnover growth of only 2.1 percent in 2015. Vodacom’s subscriber numbers grew 7.2 percent, one fourth of that of Viettel’s 27 percent.
Last year Viettel launched mobile networks in the three big African markets of Cameroon, Burundi and Tanzania, which have a combined population of 80 million, three times than Mozambique, Viettel’s only other market in Africa. The expansion has increased Viettel’s international market to 10 nations with a combined population of 270 million people, three times more than Vietnam’s population.
With a population of over 50 million, Tanzania is Viettel’s biggest overseas market. Having 1 million subscribers in just 3 months, it is the fastest growing affiliate of Viettel as well as of the global telecom industry.
In March 2016, Lumitel (Viettel’s brand name in Burundi) has become the leading operator in this country with 1.6 million subscribers thanks to the miracle growth of 1 million subscribers after only 5 months. In Cameroon, Viettel also got success by reaching 2 million subscribers in nine months.
Previously, with the significant achievements in Mozambique, Viettel’s Movitel network was nominated as the “Miracle of Africa”. It is the leading operator in term of infrastructure and subscribers. Movitel was honored with six international and regional telecom awards.
International telecom experts have hailed Viettel’s strategy to quickly expand market size. It is considered a wise decision for Viettel to join the international market because market size is the most important factor in achieving success in telecom and retail.
In Vietnam, Viettel has been successful with its robust investment and expansion strategy in its early stages so that very soon it became the leading mobile service provider.
The trend of expanding research and development (R&D) and use of IT in telecommunications will undeniably benefit from Viettel’s large market size. However, exploring three new markets within a year, from late 2014 to 2015, increased Viettel’s expenditure in Africa from $50 million in 2014 to $230 million in 2015. But usually a telecom project takes five to seven years to break even.
Profits from Viettel’s international markets have not met expectations. Last year its total after-tax profit was only VND500 billion (about $23 million) although profits from other markets were good - VND1.235 trillion ($55 million) from Asia and VND213 billion ($9.5 million) from America. Notably, after five years of operations, the American market has moved from a loss of VND87 billion ($4 million) to a profit of VND213 billion ($9.5 million) in 2015.
Exchange rate volatility has affected network providers all over the world. In Africa, for instance, exchange rate fluctuations were estimated to account for 32 percent of expenditure. All figures were reported based on current foreign currency exchange rate. Viettel’s business figures in Africa are based on local currencies and yet show good growth.
In the latest news, Viettel has won a $1.5 billion bid in Myanmar to establish a 4G mobile network in the country.
The Vietnamese group will cooperate with two Myanmar companies - MEC and SPV - to set up a joint venture to provide both internet and mobile networks.
By the end of May, Viettel and its two partners will finish procedures to establish the joint venture, in which Viettel will hold 49 per cent and contribute $1.5 billion in investment. The government will then issue a mobile telecommunications license to the joint venture - the fourth in the country. With a population of 53 million, Myanmar has significant potential because it still in the initial stages of development.
Late last year the Vietnamese government permitted Viettel to raise its charter capital from VND100 trillion ($4.4 billion) to VND300 trillion ($13.2 billion) in the 2015-2020 period.
Viettel has become Vietnam’s leading enterprise in the field of information technology and telecommunications, with a rapid yet sustainable rate of growth for many years in a row.
The group earned VND193.134 trillion (US$8.5 billion) in total revenues in 2014, a 3.2-fold increase against 2009, and VND42.219 trillion (US$1.85 billion) in profit, 4.1 times higher than the 2009 figure, ensuring stable jobs for over 27,000 employees with an average monthly salary of VND25 million per capita.
At the end of 2014, Viettel’s total assets were VND140.876 trillion (US$6.2 billion), with the owner’s equity at VND101.813 trillion (US$4.47 billion).
In the 2015-2020 period, Viettel is looking towards becoming a global telecom and information technology corporation with an enhanced international competitive capacity.
Viettel’s total revenues are estimated to reach VND548.784 trillion in 2020, a 2.8-fold increase over 2014, while its total pretax profit is estimated at VND415.979 trillion from 2015 to 2020, a 2.9-fold rise against the 2010-2014 period.
Tran Long