Viet Nam News
ASEAN @ 50 series
The giant of telecom in Việt Nam, Viettel, has achieved major success after 10 years of investment in foreign countries, including ASEAN. On the occasion of ASEAN’s 50th anniversary, Lê Đăng Dũng, Viettel’s Deputy General Director talks with Việt Nam News reporter Vũ Hoa about the group’s contributions to their overseas markets in general and the regional community in particular.
Could you tell us about Viettel’s achievements after 10 years of overseas investment, especially in markets in the ASEAN region?
After a decade of investing in foreign countries, Viettel has 10 markets with a total population of around 230 million. Viettel has built the biggest telecommunication infrastructure in every country it has entered. The total number of subscribers in the 10 markets is about 36 million. Viettel Global — a subsidiary of Viettel — brings an annual revenue of US$1.4 billion to the group from overseas investment.
Viettel has been confident in opening new spaces and markets for the group’s development thanks to its expansion in foreign countries over the last decade. The Vietnamese telecom market has been saturated. If Viettel focused only on the local market, its growth rate would not have been high. When we joined the market in 2004, only 4 per cent of the Vietnamese population had mobile phones. However, we forecasted the saturation of the country’s telecom market after four years of our operation. This urged Viettel to find new roads despite the fact that there was no local telecom provider investing overseas at that time.
Currently, the average growth rate of Viettel’s overseas markets is 30 per cent annually, which would be hard to achieve in the domestic market. The overseas investment has brought meaning in terms of geopolitics as it has well implemented the party and the government’s undertakings in foreign economic relations. Viettel has been the pioneer in promoting Việt Nam’s image to the world. It has also been the leading group for other local firms to invest in foreign markets.
Laos and Cambodia were the first two countries in which Viettel had invested. The two markets were officially inaugurated in 2009 after three years of preparation. There are many criteria to evaluate whether a market has potential or not, including a stable political environment. Laos and Cambodia have a close relationship with Việt Nam. We also received support from their governments. The most important factor is the market. When we entered into the two countries, their telecom infrastructure was poor, resulting in expensive service costs. We were confident that we could build a better network, and we did.
The biggest achievement was that Viettel became the number one telecom provider in the two markets with Metfone in Cambodia and Unitel in Laos. The two markets recouped investments after three years of operation. We are proud to build a network, which ranked first in the ASEAN region and even on the global level.
Another success was the enhancement of friendship among the three countries. Recently, Viettel has applied the roaming charge among three countries equivalent to the domestic charge.
What contributions has Viettel made for the development of the telecom infrastructure in particular and socio-economic in general, in overseas markets?
Our vision is to build a telecom infrastructure, which meets with the regional standards of the country where we make investments. Viettel has always ensured that. For example, when we ventured into the Cambodian telecom market, the country had only a few hundred kilometres of fibre optic cable. We built more than 20,000 kilometres of fibre optic cable for Cambodia, covering the whole country.
A staff of Viettel installs a 4G base transceiver station (BTS) in severe weather in Fansipan Mountain in the northern Lào Cai Province. — Photo courtesy of Viettel
In Mozambique — the first country we entered in Africa — we built a nearly 28.000-kilometre fibre optic cable system from zero. We are proud that the telecom infrastructure we built in Mozambique is equal to South Africa — the most developed country in the continent.
Viettel has yielded many awards, which was the world’s recognition of our contributions to the telecommunication and socio-economic development in our foreign markets. After building the telecom infrastructure, Viettel helped overseas markets to build public services.
Viettel has always been determined to build a network for countries where it makes investments. Even brand names in foreign markets were decided based on their culture and desire. Viettel has been well-known both inside and outside Việt Nam for its corporate social responsibility activities.
We built Internet networks for schools, healthcare networks for the underprivileged and special preferential packages for students. We have also supported governments in building public services and providing free heart and eye surgery.
Viettel has provided remote and mountainous areas with Internet services. Several places have Viettel’s networks despite having no electricity. We have also deployed 4G. For example, Viettel has covered all the cities of Laos and Cambodia with 4G service.
Last week, we became the first mobile service provider to operate a 4G network in Timor-Leste. The 4G network, designed and built by Viettel, is now available in all 13 cities and provinces in this country.
In Myanmar, where we received the licence to become the fourth network provider in the country, we will directly offer 4G service. We have been rushing to build the infrastructure and officially inaugurate by the beginning of 2018 — only one year after receiving the licence. We saw a lot of potential in Myanmar as the economy has been growing rapidly.
Unitel - the brand name of Viettel in Laos - is a hugely popular telecom service provider in Laos. — Photo courtesy of Viettel
Could you talk about Viettel’s business plans in the country and the region? What are your assessments about the local firms’ competitiveness in the deep integration into the region, especially with the establishment of the ASEAN Economic Community, AEC?
Viettel will continue to maintain its leading position in the telecom market in Việt Nam. We have already built a wide network nationwide. We would further develop applications based on the foundation, smart city and Internet of Things.
We have been the pioneer in leading the development of applications and digitalisation. When talking about the AEC, most people worry about the disadvantages. We should look at the issue in two dimensions — both advantage and disadvantage. It was hard to enter into the Indonesian telecom market. However, when the door is open with equal tax policies, Viettel will have opportunities to penetrate into bigger markets such as Indonesia with over 200 million people, the Philippines with 100 million people, or even compete with Singtel in Singapore.
The average revenue per user, ARPU, in Việt Nam was $4-5 per person while in Singapore it was $40 to $50 per person. We welcome other rivals and are ready to seek foreign markets for fair competition. I think it would be a great opportunity for all Vietnamese firms. The issue is how to capitalise on it.
There has been a lot of talk about the Fourth Industrial Revolution. It would be suitable for the Vietnamese people who are professionally at par with other countries. The government should look into what we should do and where we should do it.
ASEAN was established 50 years ago. However, till today we talk about AEC while Viettel has had multinational companies in foreign countries for years. What are Viettel’s advantages as the forerunner?
Profit is the most important factor for all businesses. We must venture first if we see opportunities. When governments sit together, we would be strengthened by their support. Businesses have to always move forward on their own.
We would have advantages if we do business early. Regarding the story of opening the market, we would surely face more fierce competition from rivals. The ASEAN telecom market has been saturated with services as almost 100 per cent of the population in all ASEAN countries use mobile phones. The business, therefore, would be difficult. However, there are still plenty of opportunities for us and we have to look for them.
We have been investing in markets, both near and far away, from Việt Nam. We realised that the nearby markets have more advantages due to similarities in culture, tax system and support from governments. — VNS