Mobile networks racing to go abroad as domestic market reaches near saturation point

Following Viettel, MobiFone is planning to export “mobile services” to foreign countries. Specialists assessed, this was the vital tendency in the context that Vietnam’s telecommunication market is going to saturation threshold.
Le Ngoc Minh, MobiFone’s chairman has unveiled an ambition to become one of the top Asian mobile telecommunication firms. In a short time, the firm will launch overseas investments through associating and joining ventures with foreign partners. “Our target is to become one of mobile telecom providers in the 200-million-person-country”, he shared. In order to actualize the ambition, MobiFone has started master plan such as human resource training, and an expected growth of 25-30% per year.

Earlier, Viettel also had expressed the target to be in top 10 telecom firms expanding overseas in the world. After big investments in Laos and Cambodia, Viettel wants to occupy majority market share in Haiti, Mozambique and Peru.

In 2010, Viettel implemented at least 3 deals in foreign countries. By the year early, the firm spent $300 million to take over 60% stake of Teletalk mobile network in Bangladesh. Then, another $59 million was invested in acquiring 70% holding ratio of Teleco in Haiti and the firm also won the bid of $28.2 million in Mozambique.

According to Hoang Anh Xuan-General Director of Viettel, last year, the global financial crisis forced many global telecom firms to sell their stakes at prices lower than 4 times. This was the reason that’s why Viettel decided to boost overseas investment. So, the leader also admitted that challenges they had to face were very high because of coping with a lot of multinational corporations and groups. Viettel now has a modest market share of 0.02% in the world, which is expected to be raised to 0.32% equaling to $3.2 billion by 2015 with the coverage of 500 million people in 10-20 countries.

A VinaPhone official said that his firm had offshore investment plans without details on investment time.

The overseas expansion of seven telecommunication companies showed that the 86-million population in Vietnam was not a highly potential market any more. Big companies have to both maintain their market share and draw up long-run strategies.

However, despite catching good opportunities as buying back stakes of some foreign partners amid the crisis period, Viettel still had to cope with an array of barriers such as language, culture, difficulties in asking telecom license, strong competition. – Vietbiz24

Tags: Vietnam Telecom, Vietnam telecom maket

Posted by VBN on Jul 19 2011. Filed under Telecommunication. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry