Viettel: The Business Philosophy

Telecom – A View Of Viettel
Nguyen Manh Hung
Vice President
Viettel Group
Telecom – The Important Infrastructure
• Telecom Infrastructure Like Roads & Highways
• Telecom = Infrastructure Of Information Society
• High Telecom Density = High GDP Growth
• 10% Mobile Penetration => 1% GDP Growth
• 10% Broadband Internet => 1.5% GDP Growth
• Telecom Services = Big Industry (3-5% GDP)
• Telecom Growth Can Be High: (2-4)xGDP Growth
Vietnam: A Developing Country
With A High Telecom Density
• A Developing Country:
• Big Population: 86M
• 70%+ Population Living in Rural Areas
• Low GDP/Capita: 1,000$
• A High Telecom Density:
• Mobile: 100%
• Fixed: 20% (80% Households)
• Broadband Internet: 5% (20% Households)
• High Telecom Revenue: 5-6% GDP (Average=3%)
• Telecom Growth = (3-4)xGDP Growth
Vietnam: 5 Years = 60 Years
• The Number Of Subs Developed In 60 Years:
• From 1945-2005: 15M Subs
• The Number Of Subs Developed in 5 Years:
• From 2005-2010: 80M Subs
• The Reasons
• Competition
• New Concept And Philosophy Of Doing Business
Viettel: The New Telecom Operator
& The Fastest Growing Company
• Telecom Market Entry: 2000
• Mobile Market Entry: 2004
• Growth (2000
2010):
• Revenue: From 3M$ To 5B$ (1,500+ Times)
• Subscribers: From 0 To 50M (#1 Mobile)
• BTS : From 0 To 50,000 (#1)
• FO: From 0 To 150,000Km (#1)
Viettel: The Business Philosophy
A Business Needs a Philosophy To Be Guided !
Viettel: The Business Philosophy
• Telecom Service = Commodity
• Any Where: 100% Population Coverage
• Any Time: No Congestion For Peak Time
• Any Body: Different Packages
• Any Price: 0 & Under 0 (1-2$/Month For Free Calling)
• When Telecom Service = Commodity ?
• Network Capex/Subscriber = 20-30$
• Handset = 20-30$
Viettel: The Business Philosophy
• High Tech = Economy Of Scale
• High Tech Cost = R&D Cost (Mainly)
• Cost Per Unit = 1/N => More Users = Less Cost
• ICT Inputs = Sand & Brain (Unlimited & Cheap)
• ICT = Economy Of Free
• Basic Service Is Becoming Free
• If It’s Digital, Sooner Or Later It’s Going To Be Free!
• The Business Strategy:
• Make The Price Cheaper First
=> Service Is Affordable For Most People
Viettel: The Business Philosophy
• The Poor Are Not Poor Forever
• If We Help Them
• If We Give Them Education
• If We Give Them Basic Needs – Basic Telephone
• The Business Strategy:
• Doing Business With Poor = Investing In Future Customers
= Investing In Country Future
• Give Poor People Basic Telecom Services FOC
Poor Get Richer And Become Our Customers Later !
Viettel: The Business Philosophy
• Branding = Big Money
• 100-150M$/Year
• By Paying To TV & Newspaper
• The Business Strategy:
• Branding By Giving Basic Services FOC To The Poor
(Free Internet For Schools, Free Telephone For Farmers,
…)
The Company Has Stronger Brand Recognition !
Viettel: The Business Philosophy
Viettel Vision:
• Every Person: One Broadband
Mobile
• Every Family:One Fixed Phone;
One Broadband Internet; One
HD Television
• Timing: The Next Decade
Viettel: The Business Philosophy
The Solution For BB Internet Booming:
• Network: 3G (Viettel: 22,000 Nodes B)
• Tariff: The Lowest Package Of 2$/Month
• CPE:
• Smartphone, xPad: Free Market
• PC For Home: Government Subsidy (Universal Service Fund)
Viettel: The Business Philosophy
BB Internet And New Horizons:
• Communications For M2M: 15B New Subs
• Contents For Education, Health & Every Thing
• Cloud Computing
• And More, Depending On Your Imagination!
Viettel: The Business Philosophy
Operator Transformation:
• Service Provider -> Information Provider
• Service Provider -> Service Deliver
• Main Asset: Customer Base
• Revenue Sharing:
• Content Provider
• Apps Store
• Handset Manufacturer (iPhone)
• And Customers !!!
Viettel: The Business Philosophy
The Speed Of Telecom Development:
• Not Decided By GDP/Capita
• Not Decided By GDP Growth
• It’s Decided By Operator’s Strategy: 2 Options
• 80% Penetration in 15 Years: High Price & Gradual Reduction
• 80% Penetration in 5 Years: Cheap Price From Day One
Viettel Strategy: ABC
• Advanced Technology, Best Quality
• Big Network: Coverage & Capacity
• Cheap Price & Big Customer Base
Viettel: The Social Responsibilities
Social Responsibility Is An Investment In Our Future
Investment In Our Future Is A Sustainable Development
Viettel: The Social Responsibilities
Free Internet To Every School
• 40,000 Schools: From Primary to University
• 25M Students
• Broadband Internet: EDGE, 3G, ADSL, FTTx
• Free Installation, Free Monthly Fee, Free Usage
• And Free Forever !
Children Are Our Future !
Viettel: The Social Responsibilities
Every Farmer’s House One Fixed Phone
• 15M Farmers
• 10M Farmer’s Households Not Having Fixed Phone
• Free Installation, Free Monthly Fee, Free1$/Month Calling
• After 6-12 Months, The ARPU Reaching 2-3$
Farmers Are Our Parent !
Viettel: The Social Responsibilities
Wireless Coverage For Border, Islands & Coastal Areas
• 2,500Km Border Coverage
• 2,500Km Coastal Coverage
(100Km Radius)
• 100 Islands
• Viettel:
The Only Company To Cover
These Areas
Viettel: The Social Responsibilities
E-Government Programs
• Do First Get Paid After
• If Not Paid, It Will Be Viettel’s Contribution To The
Government
Government Is A Country’s Brain !
Conclusions
• A Developing Country Can Have a High Telephone Density like
a Developed Country
• A Developing Country Can Have High Telecom Penetration In
Short Time
• Investing In Poor People By Giving Them Telecom Access - The
Fastest Way of Country Development
• The Operator Not Giving Money For Free But Investing In Future
Customers => Benefit Both Operator & Customers, & The Country
Investment In Future is Sustainable Development
Thank you!