FINAL PROJECT VIETTELS INTERNATIONAL BUSINESS STRATEGY IN LAOS MARKET

THE UNIVERSITY OF DANANG VIETNAM – KOREA UNIVERSITY OF INFORMATION AND COMMUNICATION TECHNOLOGY Faculty of DigitalEconomy and E – Commerce FINAL PROJECT VIETTEL'S INTERNATIONAL BUSINESS

General overview of Viettel

With 76 million users, the military telecommunications firm Viettel is presently the biggest telecommunications business in Vietnam The Group is made up of more than

20 businesses that operate in a variety of industries such as telecommunications, investment, real estate, international commerce, and technical services.

Viettel generate 11.8 billion USD in sales and 1.7 billion USD in profit in 2021,making it one of the most profitable firms in Vietnam.

Business activities

Main lines of business: providing telecommunications, mobile, Internet-TV services, digital applications, information technology, postal, communication, and delivery

Related business lines: material trade, distribution, retail, equipment, information goods, information technology, communication Finance, banking, and real estateTraining and supplying human resources to support the Group's local and international manufacturing and commercial operations.

Goals and Missions

Goals

The goal is progress, the driving force is reform, and the foundation is humanity, peace, and unity These are three interconnected factors But the most important aspect

TIEU LUAN MOI download : skknchat123@gmail.com moi nhat remains unity Solidarity at Viettel must be defined as every Viettel individual, every division in Viettel thinking and acting in the highest consensus, putting the interests and future of the whole business first.

Missions

With the objective of “Creation for People”, Viettel treats each consumer as an individual who must be appreciated, cared for, listened to, understood, and treated independently The cornerstone of a successful company is social Viettel is also devoted to reinvesting in society by integrating manufacturing and economic operations with social activities, including initiatives for health care, education, and poverty assistance.

Viettel's dedication to customers, partners, investors, society, and ourselves is reflected in all of the company's actions These ideals serve as the foundation for Viettel's efforts to create an innovative company for people.

Milestones of Viettel Global

Viettel Global Investment JSC was established according to the Business Registration Certificate no 0102409426 issued on October 24, 2007 by the Department of Planning and Investment of Hanoi city The initial share capital was 960 billion VND.

1/2008: Viettel Global received the investment project in Cambodia from Viettel

2/2008: Viettel Global concluded a joint venture contract with Lao Asian Telecom

(LAT) to establish Star Telecom Co., Ltd in which Viettel holds 49% share capital, officially started investment in Laos.

2/2009: official launch of telecommunications network in Cambodia, started business operation and services provision in the country.

10/2009: official launch of telecommunications services in Laos.

2/2010: establishment of Viettel Overseas Co., Ltd to implement the investment project on the expansion of the telecommunications network in Haiti.

TIEU LUAN MOI download : skknchat123@gmail.com moi nhat

11/2010: Viettel Global won the tender of the investment project of a telecommunications network in Mozambique.

9/2011: official launch and started business operation of telecommunications services in Haiti.

5/2012: Official launch and started telecommunications services provision in the

7/2012: Viettel Global won the tender of an investment license in East Timor.

12/2012: Viettel Global won the tender of the 3rd mobile license in Cameroon.

3/2013: Official launch of mobile services in East Timor.

8/2013: Viettel Global’s Extra-Ordinary Shareholders Meeting made decision on

- Change the Company’s Vietnamese name from: “Company” to “Corporation”

- Increase share capital from VND 6,219,052,000,000 up to VNĐ 12,438,112,000,000

- Supplement: "Rent of machines, equipment and other tangible facilities" to the

Business Registration of the Company.

2/2014: Receive investment license in Burundi.

9/2014: Official launch of mobile services in Cameroon 10/2014: Official launch of mobile services in Peru

ANALYSIS OF VIETTEL'S BUSINESS ENVIRONMENT IN LAOS 4 2.1 Macro-environmental analysis – Pestel Model

Political and legal environment

The Lao People's Democratic Republic is a politically institutional state that leads and implements a centralized form of democracy The only legitimate political party is the Las People's Revolutionary Party.

The Lao People's Army is small, has little budget and insufficient resources; Their mission focused on border and domestic security, mainly against Hmong rebel groups and other opposition Together with the Lao People's Revolutionary Party and the government, the Lao People's Army is the third pillar of the state apparatus and is expected to prevent political and civil unrest or similar emergencies There is no external threat to Laos, and the Lao People's Army maintains strong ties with Vietnam.

The political environment and social order and safety throughout Laos have been considered stable for many years This is evident in the view of the most important policy of the Party and the State of Laos This political stability has always been considered as the most favorable and attractive opportunity for investment and production and business activities for Vietnam But Laos as well as other socialist states, Laos also followed the path to socialism, which from this point has greatly affected the psychology of investors from the socialist countries.

Enterprises investing in Laos are currently difficult to anticipate the difficulties and risks especially when the legal system related to investment in Laos is in the process of being revised and completed, so there are many changes, inconsistencies, lack of transparency and difficulty to access, leading to regrettable obstacles in the process of implementing projects in Laos.

Currently, the Lao state has developed and promulgated the legal system with enterprise law, tax law, customs law, foreign investment law, telecommunication law, documents under the law of the government, ministry of commerce, other competent state agencies The above legal system has created a safe environment and legal corridor for economic activities taking place in the Lao market, including the provision of telecommunication services However, the legal and policy system of Laos currently has many inadequacies and is not synchronized and unified.

In the field of telecommunications, state agencies in Laos are responsible for promulgating policies and regulations related to the field of telecommunications and information technology, including National Agency for Post and Telecommunications (NAPT), National Agency for Science and Technology (NAST) and Ministry of Culture and Information (MIC), Ministry of Communications, Postal, Transport and Construction (MCTPC) The Department of Post and Telecommunications is a functional unit in MCTPC that has the task of managing and operating long-term development policies and strategies; issuance of licenses and regulations related to post and telecommunications.

NAPT was established by Decree 375/PM of January 22, 2007 NAPT is responsible for policymaking in the field of telecommunications, postal regulation, telecommunications and information technology and developing strategies for the planning of the long-term development of the telecommunications industry NAST establishes policies on information technology and manages Internet service providers, Internet cafes and information centers in Laos The Ministry of Culture and Information (MIC) is responsible for promulgating policies and regulations related to culture, media, information, and issues related to Internet services The division of management responsibilities of the above agencies is not uniform and transparent so there is still a overlap of responsibilities between NAPT, NAST and MIC in issuing licenses to Internet service providers.

Customs procedures are unclear, and the collection of taxes is often not in line with the set tax rates Trade law and the commercial court system in Laos are growing slowly and not transparently Trade disputes are rarely adjudicated in favor of foreign investors Cumbersome investment procedures and approval periods are not in accordance with the law Lao Holdings N.V and its subsidiary Sanum Investment

Limited submitted an application to the International Center for The Settlement of Investment Disputes – an independent division of the World Bank (WB) proposing to resolve legal disputes related to assets made up of Sanum Investment's direct investments in Laos, to date, more than $85 million has been raised According to Sanum, the Lao government's policies have affected investments and led to the risk that they could lose assets worth up to $400 million There are also some operating licenses and franchises of projects worth hundreds of millions of dollars As a result, Lao Holdings N.V lost $1.8 million per month.

In February 2018, the Lao Government issued Order No 2 on Improving Business Coordination Regulations and Mechanisms in the Lao PDR, with the expectation of improving Laos' position in the World Bank's Ease of Doing Business rankings As a result, the process of establishing a business is faster due to the simplification of the procedures for applying for licenses and registering company seals from 174 days to less than 40 days Tax administration has always been considered one of the biggest barriers to trade in Laos in surveys for small and medium-sized enterprises The World Bank ranked Laos 154th out of 190 economies in 2019 in terms of ease of doing business.

In addition to these challenges, the Lao government is also creating a series of more suitable conditions through revised laws, aiming to create a foundation for investor trust such as land incentives, corporate income tax reduction, ensuring an equal competitive environment.

Vietnam and Laos are two countries with a long tradition of friendship Under the leadership of the two Parties, the two peoples have "committed to suffering" throughout the historical journey against the aggression of the empires as well as in the period of national defense and construction and development The two countries always attach great importance to this special traditional relationship, help each other in all aspects, overcome difficult roads together, stand together on the path of renovation and development of the country in the direction of socialism.

In the economic field, up to now, trade agreements have been signed with the aim of further expanding trade relations between the two countries on the basis of mutually beneficial equality, respecting the tradition of cooperation and international trade 6

TIEU LUAN MOI download : skknchat123@gmail.com moi nhat practices With efforts, Vietnam - Laos trade exchange is constantly increasing The two countries are working to boost bilateral trade in 2021 by 10 to 15 percent from last year, potentially reaching $1 billion as planned Vietnam remains Laos' third largest trading partner (after Thailand and China), one of the three largest investors in Laos with 413 projects and a total registered capital of US$4.22 billion, up 35% from 2010 Preferential mechanisms on import and export tax for goods originating from the two countries are continued by the two sides with an ever-expanding list Especially in 2020, there was a breakthrough with 9 new and adjusted projects, accumulated capital of more than 143 million USD, up 130% over the same period in 2019 Many investment projects promote efficiency, production, and business profitably, contribute positively to the development of the two countries, create jobs, increase social welfare, help Laos well implement poverty eradication policies Although there are still difficulties in terms of capital,Vietnam always gives certain development aid to Laos, in the period of 2016-2021 isVND 3,250 billion, funded for many different fields, the most priority for human resource development.

Economic environment

Laos has one of the fastest economic growth rates in ASEAN and has maintained a rate of about 7% per year in recent years (from 2009 to 2017) The inflation rate is quite low (1.3-2% per year) Simple investment mechanism, expanding bank credit for agriculture and small businesses, developing special economic zones it has contributed to attracting foreign investors and helping the Lao economy develop well Laos' total GDP reached 18.17 billion USD, the GDP growth rate was 4.7% and in 2019 according to the World Bank report.

Despite this, the Lao economy still has many difficulties, the infrastructure is in the development stage, labor productivity and labor quality are still low Laos' economic development depends largely on mining, electricity, foreign investment (FDI) and foreign aid The road system is currently at a basic level, but is improving, and there are restrictions on telecommunications in internal and external lines Electricity is available to 83% of the population Recently, the country has faced persistent current account deficits, falling foreign currency reserves and growing public debt.

International companies are developing special economic zones in Vientiane, Savanna khet and Champassak provinces and others Special economic zones offer a wide range of incentives and tax exemptions to investors depending on the industry, besides the Lao Government constantly strives to improve the business environment. International investors have been attracted by the abundance of cheap electricity, low labor costs, Laos' central location in the expanding Mekong Subregion, the improvement of transport infrastructure.

The level of infrastructure development in Laos is still low but is improving rapidly The China-Laos railway, scheduled to begin operations in 2021, will soon connect Vientiane with Kunming, Yunnan province via high-speed rail, and will connect northern Lao cities such as Boten, Vang Vieng and Luang Prabang with Vientiane The 113.5 km-long Vientiane-Vang Vieng Highway is expected to be completed by 2021. Other new infrastructure projects include a highway linking Boten in Northern Laos with Thailand in northwestern Laos; a new highway connecting Vientiane to Boten on the Laos-China border; road reclamation on the East-West Economic Corridor in Savanna khet Province of Southern Laos; and in the future may be a highway connecting Vientiane with Hanoi of Vietnam.

Access to capital: The accessibility of SMEs (small and medium-sized enterprises) is still difficult because banks require some steps to force small businesses to borrow capital from microfinance institutions, they may even have to pay higher interest rates. SMEs hope the Lao government can ask banks to consider improving the lending process in an easier way, thereby enabling SMEs to grow faster.

Laos joined the WTO in 2013 and continues to integrate with its ASEAN neighbors through the ASEAN Economic Community The following countries have granted Common Priority System (GSP) status to Laos: Australia, Belarus, Canada, Iceland, Japan, New Zealand, Norway, Russia, Switzerland, Turkey, Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Germany, Greece, Finland, France, Hungary, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom The following items provide duty-free treatment under the LDC for Laotian goods: Chile, China, Taiwan, the Republic of Kyrgyzstan, Tajikistan, and Thailand.

Laos has also signed trade agreements with all nine other ASEAN members and participated in a series of negotiations as a member of ASEAN Laos has also signed many bilateral agreements with Vietnam, China, Cambodia, Burma, Thailand, North Korea, Mongolia, Malaysia, Russia, India, Belarus, Argentina, Kuwait, and Turkey.

The World Trade Organization (WTO) in its annual Trade Profile 2020 publication noted the global trade ranking in 2019, Laos ranked 107 th in exports and 119th in terms of imports of goods in the world In terms of services, Laos ranks 128th in terms of exports and 131 st in terms of imports Laos' economic freedom index is 53.9, making it the 141 st free economy in 2021 (Source: Heritage) The index fell 1.6 points mainly due to a decline in free trade Laos ranks 32 nd out of 40 countries in the Asia- Pacific region and has a lower economic freedom index than the regional and world average The Lao government began decentralizing control and encouraging private enterprise in 1986 The country's economic growth averaged more than 6% per year between 1988 and 2008, and it can be said that Laos' growth rate reached the fastest rate in Asia, averaging more than 7% per year for much of the past decade.

The export value of Laos in 2019 reached 5,764 million USD and imports reached 6.252 million USD, a deficit of 488 million USD In terms of services, in 2019, Laos exported 1,101 million USD, imports reached 1.274 million USD, a deficit of 173 million USD Thus, the total balance of import and export turnover of Laos reached a negative growth of 661 million USD in 2019 The export value of Laos in 2019 reached 5,764 million USD and imports reached 6.252 million USD, a deficit of 488 million USD In terms of services, in 2019, Laos exported 1,101 million USD, imports reached 1.274 million USD, a deficit of 173 million USD Thus, the total balance of import and export turnover of Laos reached a negative growth of 661 million USD in 2019.

LAOS TRADE BALANCE FROM 2014 TO 2019

2.1.2.2 Investment activities between Vietnam and Laos

According to statistics on the trademap.org (ITC International Trade Center), Vietnam is the third largest supplier of products to the Lao market and the third largest partner to import goods from Laos.

According to statistics of the General Department of Customs, in 2020 alone, the total value of import and export of goods between Vietnam and Laos reached 1,030 million USD, down 11.5% compared to 2019 In particular, the export of goods of Vietnamese enterprises to the Lao market reached 572 million USD, down 18.6% compared to 2019, accounting for 0.2% of the total export value of Vietnam to the world.

In the opposite direction, imports of goods from Laos reached 458 million USD, down 0.7% over the same period, accounting for 0.17% of the value of Vietnam's imports from all trading partners.

In the period of 2016-2020, Vietnam's trade balance held a surplus of more than US$100 million due to the situation of super-continuous exports to Laos In 2020 alone, both exports and imports will be reduced due to the impact of covid-19.

Vietnam and Laos export, import turnover, and trade balance from 2016 to 2020

VN exports to Laos VN import to Laos Trade balance

- Some of Vietnam's main export products to Laos in 2020:

Leading among Vietnam's exports to the Lao market in the period of 2016-2020 is iron and steel of all kinds According to statistics of the General Department of Customs, in 2020, exports of this item to Laos reached 72 million USD, down 16.5% compared to the same period last year, accounting for 12.6% of total exports to this market Thi "Lao Enterprise Product Introduction Week in Ho Chi Minh City" lao school accounted for only 1.4% of total exports of products of the same type of Vietnam Previously in 2018 and 2019, Vietnam's iron and steel exports were the strongest in the whole period with the value of 87.1 million USD and 86.2 million USD, respectively.

Laos' economy has a growth rate comparable to Vietnam's, and many developed countries are looking to invest in Laos Most recently, Laos has signed the RCEP Agreement, although there are still some issues that are not ready, but the fact that Laos actively participates in the new playing field and tries to exploit the advantages of joining this Agreement shows the high determination in Laos' integration, at the same time, when participating in the RCEP Agreement, Laos will have to amend and reform much to meet the new requirements Recently, the investment situation of Vietnamese enterprises in Laos has shown signs of slowing down, some State-owned enterprises investing in Laos have not been effective, however, there are still many enterprises that are operating effectively According to the assessment, the economic cooperation between Vietnam and Laos is not commensurate with the political relations between the two countries.

In the coming time, Vietnamese enterprises will have to compete with businesses in some countries, especially when those governments have strong investment policies in Laos in the fields of banking, energy and telecommunications; at the same time, Laos is 11

Socio-cultural environment

Laos' current population was 7,467,424 as of May 13, 2022, according to the latest figures from the United Nations Laos' population now accounts for 0.9% of the world's population, ranking 105th in the world in the ranking of populations of countries and territories.

The population density is 32 people/km2 with a total land area of 230,612 km2 Of these, 36.94% of the population lives in urban areas (2,706,847 in 2019) The average age is 25 years old.

The population structure in Laos is quite young, so the workforce in Laos is abundant and abundant However, the level and capacity of the labor force here is still weak The skill level and professional skills of workers are still low, the sense of discipline, industrial behavior, labor productivity has not met the requirements.

2.1.3.3 Culture and level of class division in society

Lao culture is heavily influenced by the Venerable Buddha This influence is reflected in the language and arts, literature and performing arts of Laos.

Laos is clearly bureaucratic, decision-making often focuses on a few, if any, top- down mandates The Lao people prefer cautious leaders who are able to give clear instructions Personal initiatives don't seem to be popular in this environment.

Technology environment

The Lao Party and State always attach great importance to the cause of science and technology development, the 9th Congress of the Lao NDCM Party continues to affirm that the development of science and technology together with the development of education and training is the leading national policy, the foundation and motivation for industrialization, modernize the country.

In the context of economic globalization, with the path of multilateralization and diversification of international relations, Laos has a favorable opportunity to acquire scientific knowledge, technology, resources, and experience of advanced management organizations of foreign countries to quickly strengthen the capacity of national science and technology, meet the requirements of socio-economic development.

Taking advantage of the achievements of the modern science and technology revolution, Laos can go straight to modern technologies to shorten the process of industrialization, OS and the economic development gap compared to previous countries.

The process of national renewal has created new premises for the development of science and technology of Laos in the coming time Laos' economy has a high growth rate, continuously in recent years is a favorable condition to increase investment in science and technology development, while promoting technological innovation and applying scientific and technological achievements in the economy, especially in the face of pressure on competition in the conditions of regional and international integration.

In the process of international integration in economy and science and technology, Laos is facing difficulties in transforming and building new institutions of economy, trade, finance, banking, intellectual property In accordance with international practice. This situation, if not overcome soon, will hinder the success of regional and international integration.

In the face of opportunities and challenges in the current situation, without breakthrough decisions on economic institutional reform and innovation of science and technology management mechanisms, strong measures to strengthen the capacity of science and technology of Laos, the risk of economic and scientific and technological lag is further and long-term dependence on sources foreign technology is inevitable.

Micro-environment analysis – Porter’s 5 Forces Model

2.2.1 Overview of the telecommunications industry in Laos 2.2.1.1 Laos' telecommunications network and infrastructure

In nearly a quarter of a century of innovation, reform, opening up and integration (since19986), the face of road traffic in Laos has made great progress The current domestic road system with a total length of about 31.2 km has given people and international visitors access to all important points in the country and can go to neighboring countries in all directions ODA aid and loans from foreign countries and international financial institutions Accordingly, the north-south direction connects the South (Guangxi, Guangdong ) and southwest (Yunnan) China and Myanmar with Cambodia in southern Laos and east-west, connecting Vietnam in the east with Thailand and Myanmar in the west The road system in Laos connected to countries in the greater Mekong subregion (GMS) contributes greatly to laos' socio-economic development and enhance its international standing.

Although there have been many improvements compared to the past, the transport system, electricity, and water system in many localities in Laos, especially in rural and mountainous areas, is still quite sketchy and does not meet the living and production needs of the people.

Relying on the aid of the World Bank and other countries, the Lao government has begun to build modern telecommunications infrastructure based on the 19 89 9th Flagship Plan with the help of the International Telecommunications Organization (ITU). After the installation of Fujitsu FETEX 150 switches, year 1994 at the main centers, the national switching system of Laos reached 55% digital form Shanghai Bell's equipment is deployed in several provincial centers After being supplied by Alcatel and installed in

1994, 1995, the transmission axis was built between Vientiane and LuangPrabang in the north, Paksane and Thakhek in the central and Savanakhet and Pakse in the south.

In 2008, Plessey Asia Pacific Pty Ltd was contracted to expand the micro- transmission network, phase 1 was completed between 20 09, phase 2 was completed in year 2010.

Thailand's Shin Satellite has provided Lao Telecom with a Thaicom satellite- powered backbone system connecting Vientiane to five provinces, with hubs in LuangPrabang, Savanakhet, Bokeo, Xiengkhuang and Champasack However, so far, the service has not officially been put into operation.

In November2008, Thailand's TTI company was contracted to upgrade the micro- triple axis from Vientiane to the southern regions of the country under a $5 million project.

The German-funded rural telecommunications project was started in 1994 and ended phase 3 at the end of 2 10 Phase 3 has an investment capital of about 2.7 million USD and provides services in 30 districts The German government has also approved a $4.9 million cost for phase 4 and phase 4 that has begun to be underway Phase 4 is the final part of a $17 million project from German aid to Laos' telecommunications industry.

In2011, StarTelecom in Laos cooperated with Viettel Vietnam and Viettel Cambodia to complete the construction of the Vietnam-Laos-Cambodia axis network using wavelength optical channeling (DWDM) technology with a total capacity of

400Gb/s connected to many border crossings to facilitate economic development and for people in the region including Laos.

The international switchboard was set up at Vientiane in 1987 under Australian aid In addition to the micro-triple connection to Thailand, all traffic to and from Laos over a long period of time is via satellite channels Much of this traffic is transferred through Australia's Telstra network After 1996, traffic was transferred through more providers The main change in the international market is the emergence of VoIP services In year 2002, both Lao Telecom and ETL began offering prepaid VoIP cards even though the majority of VoIP traffic was illegal and illegal.

With German aid, Laos has been involved in a fiber optic cable project from Shanghai to Singapore that runs through Vietnam, Laos, Thailand and Malaysia (China- Singapore Cable – CSC) The participating representative is ETL with a design capacity of 2.5Gb /s, the cable uses Synchronous Digital Hierarchy technology (SDH) and transfers traffic between East and Southeast Asian countries based on the Droit de Passage principle (DDP) and provides connections to other main cable systems.

It can be seen that the network and telecommunications infrastructure of Laos today has improved much compared to before, but it is still quite sketchy and disproportionate to develop a modern and dynamic telecommunications market.

2.2.1.2 The demand of the Lao telecommunications market

With a population of over 7 million people, Laos is a market with great demand for instant food items, cereals, plastics, sanitary porcelain products and especially telecommunications-related services However, compared to other countries in the ASEAN region, the development of the telecommunications sector in Laos is still in the beginning stages, consumption is still low and limited mainly in big cities The reason is that the intellectual level, the population is not large, the purchasing power and income of lao people are not high Besides, Laos also lacks experts in this field, the school offers specialized courses in information and communication technology in Laos currently very few, the schools most do not meet international standards.

Starting from 2008, with the emergence of foreign joint venture providers, the proportion of people with access to telecommunication services such as the Internet and

TIEU LUAN MOI download : skknchat123@gmail.com moi nhat telephone increased significantly Along with the rapid growth of the economy, Laos' demand for telecommunications services tends to increase rapidly, requiring suppliers to adopt new technologies to satisfy the needs of the people.

Among Indochinese countries, Laos entered the telecommunications market relatively late, the competition has only begun since2002 with a limited number of operators However, the growth rate in the Lao telecommunications market is very rapid.

From the beginning of 2003, due to the participation and investment capital of foreign operators, the Lao telecommunications market began to develop, the number of subscribers increased 7 times in just two years by the end of June 2012, the total length of fiber optic telecommunications cables in Laos had reached 51 thousand kilometers.

There are 6780 mobile phone base stations, covering 138 districts in 17 provinces and cities throughout Laos, of which 3G networks have covered2,000 villages In 2020, according to a global digital overview report released by We Are Social and Hootsuite,79% of the Lao population now uses mobile phones and internet access rates reach 43% Facebook, in particular, accounts for 43%, which means that everyone who accesses the internet in the country uses social networks In addition, with the development of telecommunications infrastructure, Laos' internet speed reached an average of 25.54 Mbps and recorded a 68% increase in broadband internet connection speed per year In the context of an average population growth rate of 1.5%, the number of mobile device users in the country also recorded an increase of 1.3% in the period 2019-2020 and the number of internet users increased by 6.5%, the number of people active on social networks increased by 12% in the same period.

Supplier Delivery time Service provided

Lao Telecom Co Ltd (LTC) 1994 Mobile, Internet

Enterprise of Telecom Lao (ETL) 2002 Mobile, Internet

Star Telecom Co Ltd (Unitel) (51% thị phần) 2009 Mobile, Internet Milicom Lao Co Ltd (Tango, Tigo, Beeline) 2003 Mobile, Internet (Wimax

Sky Tel & Net Co Ltd 2006 Internet (Wimax)

Planet Co Ltd 2000 Internet (Wimax)

Lanexang Internet Co Ltd 2001 Internet (Wimax)

2.2.3 Barriers to entry into the industry

In February 2018, the Lao Government issued Order No 2 on improving business coordination regulations and mechanisms in the Lao PDR, with the expectation of improving Laos' position in the World Bank's Business Ease ranking As a result, the process of establishing a business is faster due to the simplification of the procedures for applying for licenses and registering company seals from 174 days to less than 40 days.

SWOT analysis

The SWOT model is derived from the four letters strengths, weaknesses, opportunities, and threats, and it provides a tool to help analyze strategy and review and assess the risks and orientation of a company or a business project.

We use the SWOT model to help UNITEL with business planning, strategy development, competitor evaluation:

+ Long term development and well + Limitations in human resources reputation management, especially in foreign

+ Stable development + Owned-state company with military

+ Operating in over 13 countries around the manner and inflexible working world, provides services to 72 million environment. customers.

+ Lao's government promotes + Unstable economy. telecommunication services in this market.

+ Relationship between Vietnam and Laos + Limited telecommunication services in this country.

VIETTEL'S INTERNATIONAL BUSINESS STRATEGY AND

Viettel's global standardization strategy

In 2006, Viettel Group decided to extend its business to overseas looking for more potential markets Viettel Global was established October 2006 with a vision and responsibility of turning Viettel into a strong telecommunications group on international stage.

After 9 years of development, Viettel Global is one of the biggest Vietnamese overseas investors It is now operating 9 telecommunications companies in 9 countries across Asia, Africa, and Asia with total population of over 175 million and 13 million customers Its total revenue for 2014 was US$1.2 billion.

Viettel embrace a sustainable investment strategy that balances the benefits of corporate, governments, the people, and customers We invest in strong network infrastructure covering nationwide and widespread supplying chain to every village so that our services are accessible to all people in those countries regardless of their locations and income conditions Besides, thanks to the long-term experience from operating telecom business in Vietnam and firm financial foundation of Viettel Group, we can master and apply the latest technology and diversify our services.

Viettel Global is proving its competences through the success of its subsidiaries when most of them taking the leading positions in their national telecom markets in term of subscribers/ revenue/ infrastructure, for instance, Metfone in Cambodia, Telemor in Timor-Leste or Movitel in Mozambique.

By the end of 2017, nearly 40 million customers from international markets used Viettel’s mobile services, broadband Internet, landlines, and wireless phones As mentioned earlier, as of June 2018, Viettel attained profit in 8 markets, of which 3 markets including Laos, Cambodia and Timor-Leste has returned the initial Capital investments To date, Viettel Global is generating profits of four-to-five times higher than the initial investments in these three markets (Thanh Thu, 2018) Encouragingly, Viettel was the top telecommunications provider in terms of market share in five countries, including Cambodia, Laos, Timor-Leste, Mozambique, and Burundi (Viettel Global, 2017).

Viettel Global’s revenue from telecommunication services on foreign markets has grown rapidly and continuously The annual growth rate was 21.5% in 2016, which was more than double that of 2015, and increased by 2.5% at 24% in 2017 (Viettel Global,

2017) The number of customers in foreign markets was 13% in 2017, which was four times higher than that of the global average (about 3%) New African markets continue to see strong growth rates at 1,343% for Viettel Tanzania, 43% for Viettel Cameroon 43% and 42% for Viettel Burundi (Minh Anh, 2018) In Myanmar - the newly penetrated market, Mytel (also known as Telecom International Myanmar Co) had more than 2 million subscribers just in over a month after the official launch on June 9, 2018, surpassing Viettel Global’s target of 2 to 3 million subscribers in the whole 2018 (Tu An,

2018), contributing to Viettel’s business achievements on foreign markets.

3.1.1 Selecting target markets and target groups of customers

Prior to the decision to invest in and penetrate into the international market, Viettel Global had conducted intensive research on the potential and development of telecommunication market in different regions o f the world The data compiled in 2015 on mobile-broadband telecom services, one of Viettel Global’s strengths, showed that there were over 7 billion mobile cellular subscriptions worldwide, up from less than one billion in 2000 (ITU, 2015) Correspondingly, the annual growth rate was over 14%. Also as of 2015, the number of mobile cellular subscriptions per 100 inhabitants worldwide was 46.1 while that of developed countries was 81.3 Whereas, these figures for the Asia-Pacific region and Africa were only 42.3 and 17.4, respectively (ITU, 2015).

According to Viettel Global (2015), the number of mobile subscriptions in the world between 2015 and 2019 is forecasted to increase by 1.3 billion (from 7.2 billion by the end of 2015 to 8.5 billion by the end of 2019), equivalent to an annual growth rate of 4.2% In this period, the 20 fastest-growing markets are predicted to be emerging markets in Africa and the Central and South Asia With the highest growth rate of 7.4% annually, Africa is considered a high potential market.

Forecasted annual growth rates of mobile subscriptions in the world and by region, (2015-2019)

Africa Middle&South Asia Middle East Southeast Asia&Oceania Latin America&Caribbean

The first factor that Viettel Global considered when selecting a target country was the potential of telecommunication Service business and its political, cultural and social

TIEU LUAN MOI download : skknchat123@gmail.com moi nhat environment They can have different impacts on the telecommunication market development.

Subsequently, the competitive environment, potential competitors, threats from substitute Products or pressures from customers and suppliers and so on were weighed up In addition, the natural environment factor that has an impact on input, output and the speed of implementation was also taken into account.

In South Asia, Laos, Cambodia, Timor-Leste, and Myanmar are the markets with high potential and low barrier to entry In addition to the advantage of similarities in the cultural, social, and natural environment, the density of mobile cellular subscriptions of these countries is low compared to the regional average and those of the Philippines and Vietnam More importantly, the annual growth rates of subscriptions in these countries were very high.

Table 2 Mobile cellular subscriptions per 100 inhabitants

Country 2005 2010 2015 annual growth rate (%) ASEAN

3.1.2 Market penetration and investment strategies

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Table 3 Viettel Global’s subsidiaries, their brands, and methods of investment in 10 countries

Country Enterprise Brand Method of investment

Cambodia Viettel (Cambodia) Pte., Ltd Metfone Direct investment

Laos Star Telecom Co., Ltd Unitel Joint venture

Timor-Leste Viettel Timor Leste Telemor Direct investment into Viettel

Myanmar Telecom International Mytel Joint venture (49%)

Cameroon Viettel Cameroun Nexttel Joint venture

Burundi Viettel Burundi S.A Lumitel Direct investment

Tanzania Viettel Tanzania Ltd Halotel Halotel Joint venture

Mozambique Movitel, SA Movitel Joint venture

Peru Viettel Peru SAC Bitel Direct investment

Haiti Natcom SA Natcom Joint venture

Viettel's entry into the Laos telecom industry

+ Company name: Star Telecom Co, Ltd.

+ Address: Nongbone road, Phonxay village, Saysettha district, Vientiane Capital, Lao P.D.R.

+ Website: www.unitel.com.la

+ Services providing: Mobile, Internet, fixed broadband

Unitel is the leading mobile operator in Laos accounting for 47% market share with 1.8 million customers, owning the biggest telecom network in terms of:

Network infrastructure with more than 21,000 km fiber optical cable and 3,100 base stations (2G and 3G).

Distribution channels with 143 shops, 174 agents and sales points, 400 salespeople.

Customer care system with 200 agents/shift at the same time.

International Awards achieved: Best Operator in Emerging Market by World Communications Awards (2012).

Star Telecom created 3,500 km of fiber-optic transmission network for 17 cities throughout the nation in less than a year, which is joined by Viettel Vietnam and Viettel Cambodia to establish a Vietnam-Laos-Cambodia Central transmission line Star Telecom completed the greatest fiber-optic transmission network of 17,000 km and 2,500 transmitters in July 2012, covering all districts and being utilized by 95 percent of Laos' population It was a similar approach to Cambodia's of investing in high-quality, systemized technology infrastructure to deliver the greatest services for local citizens by making communications services more accessible.

3.2.2 Viettel Global selected a joint venture to enter the Lao telecoms market

The entry modes always play an important role for any organization that wants to enter international trade and workplace They are very important in determining the profitability and success of an organization or a business entity It sets the objectives, goals, resources, and policies that always guides the operations international business It aims at ensuring that an organization attains sustainable growth in the global markets.

The main three entry modes to international markets will include:

The factors that influence the entry modes are the key issues that an organization has to check before it involves itself in selecting the way its going to enter the foreign market.

Based on the models, certain factors are suggested for Viettel's choice to choose a market entrance option in Laos The most appropriate market entrance strategy for Viettel should be joint venture for various reasons: a Government assistance

Viettel Global has a significant edge in the Lao market because to governmental backing and economic collaboration between Vietnam and Laos Viettel is a state-owned enterprise With government backing, notably in the telecommunications sector, Viettel may find it simpler to penetrate the new market.

Opening a joint venture with the Lao government's telecom business might be a huge chance for Viettel to compete with other current market competitors. b Lower the expenses

Because of the party's existing infrastructure, Viettel just has to engage in further modifications to deliver better quality telecom services generally to suburb regions, requiring less expenditure As a consequence, the costs of modifications and innovations may be reduced. c Suit the market's culture

Viettel has successfully implemented the worldwide business model of joint venture in 5 countries across the globe With the strategy of transforming the brand name into the local language and culture, the joint venture market entrance method may be the best option, as it has a high potential of agreement from the parties that share the same goals and achieve the same success.

In conclusion, internationalization currently is a business strategy that a lot of companies around the world chooses to expand their operations Without a doubt, this strategy could bring a huge of benefits to the enterprises, extent the market share and increase sales and profit However, it also brings challenges and obstacles, required the companies to have strategic plans to overcome Viettel Telecom Corporation has also gained a lot of success in internationalization The company expands its market share in over 13 countries in Asia, Africa and America areas, becomes one of the largest telecommunication providers in Southeast Asian area In each country, Viettel provides a new brand name of joint venture, provides high quality telecom services to local citizens.

In the potential context of global economy, Viettel can consider opening a new market into global The most suitable selected market is Laos Based on analysis of market analysis (both macro-environment and micro-environment) using theoretical frameworks such as PESTLE analysis, SWOT and Five Forces Models, a lot of reasonable characteristics that makes the company to choose Laos, for example, the supports from host country's government, the current situation of society and economy of the host country, the convenience in relationship between Vietnam and Laos, the current poor quality of telecommunication industry in the host country market, etc After choices of market selection, the company should focus on choosing market entry mode for the most suitable internationalization strategy The chosen market entry mode is joint venture which is a successful business model that Viettel has been operating in 5 countries around the world With the huge advantages from joint venture ownership model, it could be the most suitable one for Viettel to enter Laos market.

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