After dominating the local market Viettel now has its sights set firmly on international markets.

At the end of 2009 Vietnam had 100 million mobile phone subscriptions, out of a total population of 86 million. With seven telcos locked in fierce competition, the local market is fast becoming saturated. Vietnams telecom market saw an important milestone in 2004 when the military-run Telecom Company (now the Viettel Group) joined a market dominated by two giants: MobiFone and Vinaphone. The two companies had long instituted high cost schedules on users but Viettel created major competition in pricing, making it much more affordable for Vietnamese people. From 500,000 subscribers in 2004, Viettel now leads the pack with 34 million, or a market share of more than 35 per cent. From 2004 to 2008 its turnover doubled each year and stood at $2 billion in 2008 and is estimated to have increased to VND 60,000 billion ($3.2 billion) in 2009. Viettel was also Vietnams first telco to invest overseas and is now targeting the worlds next billion mobile subscribers. When Viettel first went overseas, to neighbouring Cambodia, four years ago, one of its leaders at the time, Mr Le Quoc Anh, Director of the Board of Overseas Investment Projects, commented that a stable organisation is a dead organisation. We will lose opportunities if we wait until everything is stable before starting a new task. This is why when competition with MobiFone and Vinaphone was at its fiercest and Viettel was yet to carve out a stable niche in the local market, it set long term plans for investing overseas. Investing overseas has become one of Viettels most important strategies, as it gives us new markets, new customers and new development opportunities, said Mr Nguyen Duc Quang, General Director of Viettel Global, the groups company that takes charge of overseas investment. The success in Cambodia, which has nine telcos operating and 20 per cent of the population using mobile phones, has been encouraging for Viettel. After three years investing in its wholly owned telco and more than ten months after launching services under the brand name Metphone, Viettel has become the only telco with a fibre optic network nationwide and has the largest number of customers, at 3 million. With experience from Vietnam and Cambodia, the Lao market was not difficult for Viettel to penetrate, except for the fact that the number of mobile phone users is much lower as the countrys population is only some 7 million and the group contributed 49 per cent to Unitel rather than set up wholly-owned companies. Three months after officially launching its services in Laos, among the four telcos in operation Viettel has become the leader in terms of infrastructure, with nearly 1,000 BTS and 8,500 km of fibre optic cable. These will increased to 2,000 BTS in 2010, together with 10,800 km of cable covering the whole country, able to serve 3 million subscribers. At present it has 500,000 subscribers in Laos and targets to sign up 1.4 million more this year. Viettel has gained a 3G licence for the two overseas markets and will deploy 3G services in the first half of 2010. It also announced recently that it had completed all necessary procedures to open a representative office in Myanmar. After that, Viettel joined Bangladeshs state-owned mobile phone company Teletalk, with an investment of $300 million. Viettel also has plans to invest in Haiti. Despite the recent earthquake, Viettel leaders are still determined to continue their investment in one of the worlds poorest countries, which also has an unstable political situation. We look at the recent difficulties as opportunities for our development, so we are keen to invest in the market, said Mr Quang. Its now working at completing the necessary procedures. Under its plan the group will invest in other Asian, African and Latin American markets, which are

evaluated by group leaders as being developing areas with their share of difficulties, especially in their telecom sectors and telecom services. Others countries are also being mentioned by Viettel, such as Venezuela and Cuba. By expanding its operation to foreign markets, Viettel aims at being among the Top 30 telco and Top 10 companies investing overseas in the telecom sector in the world within the next few years. In some of the new markets, Viettel will continue to provide its traditional telecom services, with a strategy of infrastructure first, services to follow. To 2015, the turnover from investing overseas is forecast to be equal to half of all turnover gained from telecom services in the domestic market, where the corporations total turnover is to be $15 billion. There are around 30 multinational companies joining world telecom markets with nearly 1,000 licences in 170 countries. Sixty countries now have a telephone density of less than 40 per cent, with a total population of two billion people. This gives companies like Viettel a great deal of opportunities despite the fact that, at present, its market share in the world is just 0.02 per cent. The group is aiming at raising the figure to 0.32 within the next five years and have an estimated turnover of $3.2 billion, with its network covering 10-20 countries. When it first launched mobile phone services in Vietnam Viettel aimed high and planned to be the biggest telco in Vietnam within three years. And they have made it work. In Laos and Cambodia they have beaten other multinational telcos to become the leader in just a short period of time. People working in the field are curious about how they will compete in other markets, which are far away and are culturally very different. They must deal with issues in relation to market size and penetration growth, political stability, regulatory environments, and cultural fit. By doing this we also present ourselves with new challenges, said Mr Quang. But they are necessary. Each new market will be a new challenge and we view it as a school for us to learn and develop. Thanks to the experience gained from our international investment, we feel more confident when we compete in our own backyard and in new markets. Viettel is the first group in Vietnam to invest overseas in the telecom sector, which accounts for a small percentage of the countrys total overseas investment. More and more Vietnamese enterprises are looking at overseas markets as potential playing fields. From 1989 to November 2009 the Ministry of Planning and Investment licensed 454 overseas investment projects belonging to Vietnamese enterprises with total registered capital of more than $7.47 billion. Laos, Malaysia, Russia and Cambodia are the four biggest destinations, with $6.1 billion in registered capital. Coal exploration and mining have the biggest percentage, at 47 per cent. One of the barriers for Vietnamese enterprises in investing overseas is administrative procedures in Vietnam and complex regulations on foreign currency causing difficulties for domestic businesses to transfer money abroad. Remarking that at present procedures are much more open and simpler than before, Mr Quang also expects that the process will be shortened even further and made even simpler. The slow licensing process can result in enterprises losing opportunities in foreign markets, he said. Another issue he touched on was the need for information about foreign markets to be more diversified and thorough. By investing in many countries Viettel is expected to become one of Vietnams first multinational companies with a real niche in international markets. The Vietnamese business community has long waited for a major Vietnamese brand in the international market, like Sony from Japan or Samsung from South Korea, changing the image of Vietnam as an agricultural exporter to being a major player in the high-tech field.