Viettel Group’s total overseas investment increased by 9 per cent to nearly US$1.5 billion in 2015. According to UK-based OVUM - a market-leading research and consulting firm specializing in global coverage of information technology and telecommunications industries – the global industry rate was only 2.3 per cent (a fourth of Viettel’s).
Viettel Group’s total overseas investment increased by 9 per cent to nearly US$1.5 billion last year. According to UK leading research and consulting firm OVUM this compared favourably with the global industry rate of 2.3 per cent.
Viettel out-competed rivals in several markets, including Vodacom – a more experienced and larger African mobile communications company that saw turnover grow by only 2.1 per cent in 2015. Vodacom’s subscriber numbers grew 7.2 per cent, a quarter of Viettel’s 27 per cent.
Last year Viettel launched operations in Cameroon, Burundi and Tanzania. The three have a combined population of 80 million, representing substantial growth in Viettel’s coverage from its initial African investment in Mozambique. The expansion has increased Viettel’s reach to 10 nations with a combined population of 270 million.
Tanzania is now Viettel biggest overseas market with 50 million people. By hitting 1 million subscribers in just 3 months, it is ranked as the fastest growing affiliate of Viettel, and the fastest growing firm in the global telecom market.
In March 2016, Viettel’s joint venture Lumitel in Burundi became the leading operator in the country with 1.6 million subscribers after adding a million subscribers in just 5 months. In Cameroon, Viettel signed up 2 million subscribers in 9 months.
The firm’s Mozambique outfit, Movitel was described as the Miracle of Africa. It is the leading operator in term of infrastructure and subscribers. Movitel has won 6 international and regional telecom awards.
International telecom experts have hailed Viettel’s strategy to concentrate on rapid market expansion.
Expanded research and development and use of IT in telecommunications will undeniably benefit from Viettel’s large market size. However, the launches in three new markets within a year between late 2014 and 2015 increased Viettel’s expenditure in Africa from $50 million in 2014 to $230 million in 2015. It usually takes a telecom project 5 to 7 years to break even.
Profits from Viettel’s international markets have not met expectations. Last year post-tax profits reached just VND500 billion (USD22.47 million) despite the fact that profits from other markets were good -- VND1.235 trillion from Asia and VND213 billion from the US. After 5 years of operations, the American market has moved from a loss of VND87 billion to a profit of VND213 billion in 2015.
Furthermore, exchange rate volatility has affected network providers all over the world. In Africa, for instance, exchange rate fluctuations were estimated to account for 32 per cent 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 have shown good growth.
