G1_00183 3G BUSINESS STRATEGY BUILDING FOR VMS – MOBIFONE -COMPANY XÂY DỰNG CHIẾN LƯỢC KINH DOANH 3G CHO VMS – CÔNG TY MOBIFONE

G1_00183 3G BUSINESS STRATEGY BUILDING FOR VMS – MOBIFONE -COMPANY XÂY DỰNG CHIẾN LƯỢC KINH DOANH 3G CHO VMS – CÔNG TY MOBIFONE GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJECT REPORT 3G BUSINESS STRATEGY BUILDING FOR VMS — MOBIFONE COMPANY Group 7: Ngo Van Han Vu

=

MBA Program IBA Program (GaMBA)

CAPSTONE PROJECT REPORT

3G BUSINESS STRATEGY BUILDING FOR VMS —- MOBIFONE

COMPANY

Ngo Van Han

Vu Xuan Phong Pham Hai Linh Dao Minh Kinh

GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM

CAPSTONE PROJECT REPORT

3G BUSINESS STRATEGY BUILDING FOR VMS

— MOBIFONE COMPANY

Group 7:

Ngo Van Han

Vu Xuan Phong Pham Hai Linh

Dao Minh Kinh

HANOI 2011

VMS - MOBIFONE COMPANY

We, Vivi - Mobitoac Company confi :0|that we «gree the research group inchiding the

members m antioned below to be allowed to get access to the internal documents, data as

well as coniact wich the operation act to truáy about the strategic orientations of VMS — Mobifone “omypeny serving the resear ch purpise of the group to: complete the MBA

Grice 3G Business Strategy Building for VMS — Mobifone Company

We also send our heartiest thanks to the lecturers and staff of our faculty for their supervision, guidance and invaluable encouragement during the time when we studied at class X0410

Also we would like to thank the staff of Vietnam Mobile Telecom Services Company (VMS - Mobifone) for helping us finish our project

Finally, we show our gratefulness to our friends, colleagues, relatives for their encouragement during this course

Sincerely yours!

1 Ngo Van Han

2 Vu Xuan Phong

3 Pham Hai Linh

4 Dao Minh Kinh

: Group 7 -

Global Advanced Master of Business Administration Ị

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GRIGGS 3G Business Strategy Building for VMS — Mobifone Company

Calculation unit Gross domestic product Mobile communication International standard International Telecommunication Union Limited

Mobile Communication Information and Communication Property

Vietnam Mobile Telecom Services Company

Vietnam Posts and Telecommunications Group World Trade Organization

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On April 2™ 2009, Ministry of Information & Communication Technology officially announced the list of four investors getting allowance for 3G implementation in Vietnam They are Viettel Corporation, Vietnam Posts and Telecommunications Group VNPT (VinaPhone and MobiFone) and the joint venture of Electricity of Vietnam (EVN Telecom) and Hanoi Telecom Corporation This is not only a chance but also a challenge for both mobile businesses and Vietnamese consumers because these services are still new to Vietnamese people

Vietnam Mobile Telecom Services Company VMS (Mobifone) has gone to operation for 18 years and achieved considerable accomplishments VMS is not only the company that marked the beginning of mobile industry but also the first company to connect Vietnam’s telecom industry with international telecom system Since December 2009, VMS- Mobifone has officially supplied 3G services After one-year operation, the company has achieved encouraging accomplishments However, business environment has experienced fierce competition day by day, and this new technology is still new to Vietnamese market In order to help the company easily penetrate into the market our group decided to choose this topic:

"3G business strategy construction for VMS - Mobifone" as our graduation thesis

We hope that this study can construct effective business strategies that will help the -ompany to penetrate more easily in Vietnamese telecommunication market

Global Advanced Master of Business Administration

G RIGGS sexe) IG Business Strategy Building for VMS ~ Mobifone Company Oe Ou -

3G services can be considered as a strategic business unit (SBU) of MobiFone because of the following reasons:

- MobiFone just established an Separate Department for 3G This department

is independent and fully functional department as both cost and profit center

2.1.2 Specific objectives

- To understand the literature review of strategic management and construct

business strategies for the company

- To understand the business performance of VMS - Mobifone, analyze strengths and weaknesses as well as opportunities and threats of external environment to 3G services of the company

- Based on that, set up strategic plans, select and suggest solutions to help the company enhance the business effectiveness in 3G services in coming time

3 Scope of the study

- Regarding content: The study focuses on constructing business strategy construction and suggesting solutions to implement the recommended strategies to 3G services of VMS -Mobifone

- Regarding space: The study was implemented in VMS - Mobifone located

in Lot VPI Plot Yen Hoa Ward, Cau Giay District, Hanoi

Gries 3G Business Strategy Building for VMS — Mobifone Company

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UNIVERSIT

+ The collected data is in 2008, 2009, 2010

+ The study was implemented from 25/10/2011 to 25/11/2011

4 Methodology

4.1 Data collection methods

- The collected data is from different sources such as VMS - Mobifone reports, newspapers, magazines and Internet Data includes tables of reports on business performance, reports on staff performance and other information from Financial department Personnel and Labor department, Planning department and Marketing department of VMS - Mobifone

- Information about 3G services in the official website of VMS - Mobifone www.mobifone3gcom.vn and history of the company in the website

www.mobifone.com.vn and other information channels

- Collected information about 3G mobile markets in social network such as http://vneconomy.vn and http://dantri.com.vn

4.2 Data processing methods

- Methods of comparison, analysis, synthesis: Analyze data from financial reports, compare data of fiscal years and synthesize data to withdraw remarks

- Statistic method: Collect statistic from charts and diagrams to draw conclusions and trends to evaluate the business performance of the company as well

as the telecom industry

- Analysis method: Analyze SWOT, EFE, IFE, QSPM, ete

5 Structure of the study:

Except for Introduction and Conclusion, the study contains 3 chapters:

Chapter 1: Literature review of strategic management and business strategy construction in enterprises

Chapter 2: Evaluation of business performance of VMS- Mobifone and factual situation of 3G business

Chapter 3: 3G business strategy construction for VMS- Mobifone

Griccd 3G Business Strategy Building for VMS — Mobifone Company

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CHAPTER 1 LITERATURE REVIEW OF STRATEGIC MANAGEMENT AND

BUSINESS STRATEGY CONSTRUCTION IN ENTERPRISES

1.1 Definition of strategic management

Strategic management is a field that has received much attention from economists and administrators In term of wide study scope and feature-rich forms

of practical application, from each point of view, there is another different definition

of strategic management There are some definitions of strategic management

- Strategic management is a set of decisions and administrative actions Which determine the long-term success of the enterprises

- Strategic management is a set of decisions and successful methods which lead to strategic planning and implementation in order to meet the organizational

goals

- Strategic management is the process of studying current and future environment, setting organizational goals and implementing and inspection implementation process in order to meet the objectives in current and future environment

Definitions of strategic management are widely used and accepted by

businessmen

- Strategic management is the art and science of constructing, implementing and evaluating the synthetic decisions which help each organization achieve its goals

The above definitions show that strategic management focuses on the coordination of administration, marketing, finance, accountancy, product, operation, research — development and information system to reach organizational success

1.2 Strategic management process

According to Ferd R David, strategic management process contains 3 stages: strategic planning strategy implementation and strategy evaluation

Global Advanced Master of Business Administration

External evaluation, Setting Setting

identify opportunities long-term : general '

& threats goals : | objective

objectives company allocation : | performance and

strategy

7

Internal evaluation, Selecting k '

identify strengths and feasible Department

weaknesses strategy policy

ST ST STRATEGIC PLANNING STRATEGY STRATEGY

— IMPLEMENTATION —]| EVALUATION ¬ Source: Griggs MBA’s text book, 2010

1.2.1 Stage of strategic planning

Stage of strategic planning contains the process of developing business tasks, identifying external opportunities and threats to the organization, analyzing internal strengths and weaknesses, setting long-term goals, constructing alternative strategies and selecting specific strategies to pursue

Stage of strategic planning also makes decisions to these issues: which business should the company take part in? Which business should not it? How are resources allocated? Should or should not promote or expand the operation? Should

or should not penetrate into international market? How to avoid the controlling power of competitors?

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UNIVERSITY

1.2.2 Stage of strategy implementation

Stage of strategy implementation requires companies to set annual targets, set up the foundation, encourage staff and allocate resources to ensure the implementation of strategies Strategy implementation includes the process of developing support culture for the strategy to establish an effective organizational Structure, redirecting marketing activities, preparing budget This stage also requires developing and effectively using information system, encourage individual activities

1.2.3 Stage of strategy evaluation

Stage of strategy evaluation will inspect the performance of set-up activities and strategy implementation This stage includes measuring individual and organizational achievements, as well as making necessary adjustment Although making effective strategic decisions is the responsibility of the organizational Owners or senior executives, managers and staff also have to connect with set-up

factor to achieve organizational unity for necessary adjustments

1.2.4 Internal controlling to identify strengths and weaknesses

According to Ferd R David, internal environment contains the main factors such as administration, finance — accountancy, manufacturing, research & development, human resources and information system

1.2.4.1 Administration

* Planning: including all the administrative activities regarding future preparations such as forecast, goal setting, strategic planning, policy and plan making activities

* Organization: including all the administrative activities to establish structure of the relationship between power and responsibility The specific tasks are establishing organization; specializing, describing and elaborating jobs: expanding control; synthesizing orders: coordinating, arranging, designing and analyzing jobs

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* Leading: including the efforts to make orientation people’s activities such

as leading: communicating; team-working: changing activities: delegating: improving business performance: satisfying jobs and demands; renewing organization; raising spirit of the staff and managers

* Control: including all the management activities to ensure that the actual results are compatible with planning results The main activities are inspecting the product quality and finance activities: controlling sales and inventory sales; controlling cost; analyzing changes and giving award and punishment

1.2.4.2 Marketing

Marketing is the process of identifying, forecasting, establishing and meeting customer demands to products and services According to Philips Kotler, marketing consists of 4 main tasks: (1) analyzing market competitiveness; (2) selecting target markets; (3) establishing marketing mix program (including product, price, distribution and promotion); (4) conducting marketing activities

1.2.4.3 Finance - Accounting

Financial condition is considered as the most effective method to evaluate competitive advantages of companies It is also the most attractive factor from the view of investors The main functions of finance — accountancy are investment decisions, financing decisions and decisions on dividends

The basic factors of business financial analysis includes: the ability of short- term capital mobilization, the ability of long-term capital mobilization, the ratio between loan stock and capital stock, capital expenditure compared to the whole sector and competitors, the tax and interest rate issues, etc

1.2.4.4 Production - Operation

Production — operation consists of all the activities to transform inputs into products and services The production process includes 4 kinds of decisions (or functions): process (establishing physical production system), power (producing the best output for the organization), inventory (managing raw materials and work in process and finished products), labor force (managing administrative staff, skilled

7 Group 7 -

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employees) and quality (ensuring to produce high quality products) Strengths and Weaknesses in these five functions have decisive influences on organizational success or failure

1.2.4.5 Research & Development (R&D)

Research & development activities aims to developing new products well ahead of competitors, improving the quality of products, controlling prices or reforming production process to reduce costs The organizational performance of research & development efforts can help companies remain the leading position or make companies lag behind leading competitors in the sector

1.2.4.6 Human resources

Human resources play an important role to the success of companies Although how right the strategy is, it can not take any effect without competent working staff The company has to prepare human resources to achieve set-up goals

The main functions of human resources including employee recruitment, interview, examination, selection, orientation, training, development, concern, evaluation,

award & punishment, promotion, transfer, demotion and layoff

1.2.4.7 Information system

Information system is an important strategic source because it collects raw data from external and internal environment, helping the organization monitor environmental changes and identify threats in competitions Moreover, the company can also support implementation, evaluate and control strategies Besides, an effective information system provides companies with special abilities such as low costs, satisfactory services to customers

1.2.5 Setting long-term goals

Long-term goals show the expected result of strategy implementation Strategies indicate methods to achieve long-term goals The time frame for goals and strategies has to be appropriate, normally from 2 to 5 years

1.2.6 Strategy construction and selection

The process of strategy formation and selection consists of 3 stages:

1.2.6.1 The input stage

In order to make a feasible strategy, the company has to collect sufficient, accurate and in-time information and analysis techniques to evaluate external and internal environment, identify strengths & weaknesses, opportunities & threats Therefore, the company can use tools for strategy integration and selection more effectively

According to Fred R David, in the input stage, the company needs to collect sufficient information about external and internal environment with the using tools such as EFE, IFE and Competitive Profile Matrix

1.2.6.2 The matching stage

The techniques used in the second stage consist of Strengths - Weaknesses - Opportunities - Threats matrix (SWOT matrix) and the grand strategy matrix These matrices use the input information from the first stage to match external opportunities & threats with internal strengths & weaknesses, thereby forming

feasible strategies for selection

1.2.6.3 The decision stage

This stage uses Quantitative Strategic Planning Matrix (QSPM) as the only technique QSPM uses the input information from the input stage to objectively evaluate feasible strategies for selection in the matching stage This matrix expresses the relative attractiveness of feasible strategies, thereby providing the objective basis for selecting specific strategies

Due to limitation of organizational resources, the company could not implement all the feasible strategies It has to select the best strategies to put them

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1.3 Tools for strategy construction and choice

1.3.1 Content and analysis tools for strategy construction

1.3.1.1 External Factor Evaluation Matrix

* PEST model

PEST model is used as a tool to do research on the impacts of the factors

from macro environment These factors are Political, Economics, Socio-cultural,

Technological factors

- Political factors: The elements of political factors have great influence on all the businesses in a territory Legal institutions can endanger the existence and development of any sector When a company operates in an area of an administrative unit, it is forced to comply with legal institution in this area

- Economic factors: The major impacts of economy consist of GDP trend;

interest rate and its trend; the periods of economic cycle; inflation, the trend of

exchange rate

- Socio-cultural factors: including leisure interests, ethic standards, living standards, business community and female workers, etc and other changes of macro factors As a result, these factors often occur more slowly with the long-term influences whose scope is wide and very hard to notice

- Technological factors: The world has witnessed more and more inventions

of new advanced technologies, opening opportunities as well as threats to all the sectors and enterprises The development of technology can make new markets As

a result, it also leads to the rapid growth of new products, which has changed the competitive relationship in the sector The current products soon become outdated

- Integration factors: It cannot be denied that globalization is the popular trend nowadays, and this trend does not create opportunities for enterprises and countries to develop production and business activities

~ Globalization creates competitive pressure among competitors from all areas Integration process requires companies to make adjustment in accordance with comparative advantages and labor allocation of the area and the world

Global Advanced Master of Business Administration

* Analyze impacts of sector environment

We apply Five Forces Model of Michael E Porter (1980) to analyze the microenvironment of enterprises:

Figure 1.2: Michael E Porter’s Five Forces model

Threat of New Entrants

r

Bargaining Industry Competitors Bargaining Power of Power of Suppliers Buyers

Source: Gary D.Smith, Danny R Arnold, Boby R.Bizzell, Translator: Bui Van

Dong (2003), Business strategies and tactics, Statistics Publishing House, Hanoi

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* Buyers (Customers): an integral part of every business Customer loyalty

is the most valuable property of enterprises Another important thing regarding customers is their capacity to pay

* Suppliers: Suppliers refer to people who use material, equipment, financial and labor resources to make things for sale Similar to customers, when suppliers have advantages, they will build up high pressure and disadvantages to companies

* Potential entrants: Potential entrants may be the factor reducing the company’s profit because they know how to exploit new production capacity with the desire to gain market share and necessary resources

* Main entrants

Figure 1.3 Main content of competitor analysis

What Drives the Competitors?

What the Competitor Is Doing

and Can Do?

Future Goals

At all levels of management

and in multiple dimensions

™~ ea

make?

Competitor’s Response Profile

- Is the competitor satisfied with its current position?

- What likely moves or strategy shifts will the competitor

- Where is the competitor vulnerable?

- What will provoke the greatest and most effective

retaliation by the competitor?

Assumptions

Held about itself (competitor)

and the industry

Capacities Both strengths & weaknesses

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* External Factor Evaluation Matrix (EFE)

FE Matrix is used to synthesize summarize and evaluate the major opportunities and threats from external environment which have impacts on the company EFE Matrix helps strategists evaluate the response of the company to opportunities and threats, giving assessment of external environment which creates adv antages or difficulties to companies

There are five steps to conduct an EFE Matrix:

- Gather a list of 10- 20 factors of two groups: opportunities and threats Which play a decisive role to the organizational success or risk

- Assign a weight for each factor, ranging from 0.0 (not important) to 1.0 (very important) This classification shows the correlative important level of each factor to the success of the company Weights are identified based on comparison with competitors or expert method and group discussions Opportunities often receive higher level than threats The total weight must sum to 1.0

- Rate from | to 4 to each critical success factor to indicate how effectively the company’s current strategies respond to the factor In which, 4 shows superior response, 3 shows above average response, 2 shows average response, and 1 show poor response These ratings are identified based on the performance of the company Thus, the weights of the second step are based on the industry whereas the ratings of this step are based on business responses

- Multiply each factor’s weight by its rating to identify total weighted score

- Add the weighted score for each variable to identify the total weighted score of the company (The highest possible total weighted score of a company is 4, the lowest possible total weighted score is 1, and the average total weighted score is a)

The total weighted score of 4 shows that the company is flexibly responding {0 opportunities and threat from external environment It means that the current strategies of the company have effectively taken advantages of opportunities from external environment and successfully avoided the external threats On the contrary,

* Competitive Profile Matrix

Competitive Profile Matrix is used to compare a company to its main competitors, based on the factors which have influences on competitive capacity of businesses in the industry Competitive Profile Matrix helps strategists to identify main competitors and their strengths & weaknesses In addition, this matrix also helps the company define its competitive advantages and disadvantages which need adjusting Competitive Profile Matrix is the expansion of EFE Matrix in case of weights, ratings and total weighted score are the same Different from EFE Matrix,

in Competitive Profile Matrix, we can put in the external environmental factors which influence the organizational development such as financial stability, marketing efficiency and worthwhile R&D investment

There are five steps to conduct Competitive Profile Matrix:

- Gather a list of 10 factors which have great influences on competitive capacity of companies in the industry

- Assign a weight for each factor, ranging from 0.0 (not important) to 1.0 (very important) The weight of each factor depends on the level of its influence on competitive capacity of companies in the industry The total weight must sum to 1.0

- Rate from 1 to 4 to each critical success factor to indicate how effectively the company’s current strategies respond to the factor In which, 4 shows superior response, 3 shows above average response, 2 shows average response, and 1 show poor response These ratings are defined by expert method based on the performance of the company

- Multiply each factor’s weight by its rating to identify total weighted score

- Add the weighted score for each variable to identify the total weighted score of the company (The highest possible total weighted score of a company is 4,

Griccd 3G Business Strategy Building for VMS — Mobifone Company

1.3.1.2 Internal Factor Evaluation Matrix (IFE)

IF E Matrix is used to synthesize, summarize and evaluate basic strengths and weaknesses of companies This matrix shows the strengths which need to promote and weaknesses which need improving to enhance its performance and competitive

Step 4: Multiply each factor’s weight by its rating to identify total weighted score

Step 5: Add the weighted score for each variable to identify the total weighted score of the company

The highest possible total weighted score of a company is 4, the lowest possible total weighted score is 1, and the average total weighted score is 2.5 The total weighted score of 4 shows that the internal environment of the company is

Group 7 -

1.3.2 Tools for feasible strategies construction

1.3.2.1 Strengths — Weaknesses — Opportunities — Threat Matrix (SWOT)

SWOT Matrix is an important integral tool to help administrators establish 4 groups of strategies: Strengths — Opportunities strategies (SO), Weaknesses - Opportunities strategies (WO), Strengths — Threats strategies (ST), Weaknesses — Threat strategies (WT)

- SO Strategies: improve internal strengths in order to grasp external Opportunities

- WO Strategies: overcome internal weaknesses to grasp external opportunities

- ST Strategies: take advantage of internal strengths to avoid or minimize the loss due to negative impacts of external threats

- WT Strategies: the defense strategies used to overcome internal weaknesses

in order to avoid threats from external environment

According to Fred R David, there are 8 steps to conduct a SWOT Matrix:

1 Listing the firm’s key external Opportunities (Oj, Oo )

t© Listing the firm”s key external Threats (Tì, T› )

Listing the firm’s key external Strengths (Sj, S> )

1.3.2.2 Grand Strategy Matrix

All organizations can be positioned in one of 4 quadrants of Grand Strategy Matrix This matrix evaluates company’s position based on two dimensions: competitive position and market growth The appropriate strategies are enlisted in sequential order for the attractiveness of organizations in each quadrant of the matrix

1.3.3 Tools for strategy selection: Quantitative Strategic Planning Matrix (QSPM)

According to Ferd R David, QSPM uses the input information from all the above matrices such as EFE Matrix, IFF Matrix, Competitive Profile Matrix, SWOT Matrix and Grand Strategy Matrix to objectively evaluate the best alternative strategies There are 6 steps to conduct QSPM:

Step 1: List the firm’s key external Opportunities/Threats and the firm’s key internal Strengths/Weaknesses at the left column of QSPM Information should be collected from EFE and IFE Matrix QSPM consists of 10 external critical success factors and 10 internal critical success factors

Step 2: The opportunity, challenges from the external, the strengths and the weaknesses from the internal need to be classified from 0.0 (not important) to 1.0 (very important) The sum of the classified level of opportunities, challenges from the external equals that of the strengths and the weaknesses from the internal and the result of each one is 1.0

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Step 4: Calculate the Attractiveness Score (AS) As is the value which indicates the relative attractiveness of each strategy in a group of alternative strategies

Attractive Score is determined by examining each internal and external critical success factors separately, one at a time, and asking the following: ‘‘Does this factor make a difference in our decision about which strategy to pursue?`` If the answer to this question is “Yes”, the strategies should be compared relative to that key factor In terms of each factor, Attractive Score is assigned to each strategy

to indicate the relative attractiveness of each strategy compared to different Strategies

Attractive Score is 1 = not attractive, 2 = somewhat attractive, 3 = reasonably attractive, 4 = highly attractive

If the answer to the above question is “No”, then the critical success factor has no effect on the decision In this case, Attractiveness Score would be 0

Step 5: Calculate the Total Attractiveness Score (TAS) Total Attractiveness Score is defined as the action of multiplying the weights (step 2) by the Attractiveness Score (step 4) in each row In term of the influence of internal and external critical success factors in beside column, the Total Attractiveness Score indicates relative attractiveness of each alternative strategy The higher the Total Attractiveness Score is, the more attractive the strategy is (in term of beside critical success factor)

Step 6: Calculate the Sum Total Attractiveness Score by adding all Total Attractiveness Scores in each strategy column of the QSPM

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Gri oa 3G Business Strategy Building for V\IS— Mobifone Company

CHAPTER 2 EVALUATION OF BUSINESS PERFORVMIANCE OF VMS - MOBIFONE

AND FACTUAL SITUATION OF 3G BUSINESSES 2.1 Overview of VMS - Mobifone

2.1.1 History

Vietnam Mobile Telecom Services Company - mobfo Ne VMS, a state-owned company under Vietnam Posts

„„ and Telecommunications Corporation, was founded

in April 16'" 1993, VMS has become the first GMS 900/1800 mobile telephony services provider in the brand name MobiFone By January 2011, Mobifone has been operating as the model of Limited Co., under Vietnam Posts and Telecommunications Corporation

MobiFone’s main scope of business are organizing, designing, constructing, developing network and providing new services of mobile communications with high technology and doing business in the field of mobile communication services

GSM/1800, UMTS 3G technology all over the country

In the last 18 years, network and services systems of MobiFone have great movements MobiFone is always the leading company of technology innovation, with accomplishments in applying modern science and technology to improve the quality of services Moving forward, the company has successfully provide plenty

of non-speech services, value added services and many applications of 2G & 3G technology meeting the demand of customers of all classes MobiFone is highly appreciated about the quality of services and customer care; facilities and modernity Vietnam Mobile Telecom Services Company has been awarded “Labor medal First Class” by President in 2008 “The excellent mobile operator” granted by Vietnam Ministry of Information and Communications in 2008, “The best customer care operator” from 2008 to 2010 Continuously in six years (2005-2010), MobiFone network was awarded “The most favorite mobile operator of the year” and ~The best customer care operator” voted by Vietnamnet cyber newspaper and

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Grice) 3G Business Strategy Building for VMS — Mobifone Company

In July 2011, VMS Company is honored to receive the medal of “Hero of Labor during the Renovation” awarded by President

* Detailed information about the company:

- Vietnamese name: Công ty Thông tin Di động

- Business model: Limited Co

- International trade name: Vietnam Mobile Telecom Services Company - VMS

- Address: MobiFone Block, Lot VP1, Yen Hoa Ward, Cau Giay Distric, Hanoi

Telecommunications Group)

- Assembling and manufacturing mobile communication devices

-Maintaining, repairing devices of mobile communications,

telecommunications, electronics, information technology and related equipment

- Consulting, investigating scheme and constructing mobile communications

equipment for organizational business activities

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Griccs) 3G Business Strategy Building for VMS — Mobifone Company

- Always provide customers with new value added services

- Every piece of information will be shared transparently

- Place to send and share the most reliable benefits of officers, employees, customers,

stakeholders and the whole community

* Core value of Mobifone

1) Transparency

Transparency is expressed from awareness to action of every individual in the company The principle of the company is “Being transparent in administration, cooperation, responsibility and benefit”

2) Consensus

Mobifone appreciates consensus and coordination in a friendly working environment to help Mobifone become the strongest and the most reliable partner of stakeholders in telecommunication industry in Vietnam and International market

3) Prestige

The company is proud of the superiority of a leading brand of mobile communication industry of Vietnam Customers always receive the best customer services and have plenty of choices Friendliness and ability make it different to 1elp Mobifone achieve a special position in customers’ mind

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oe

Not satisfied with current achievements, Mobifone always move forward by researching creating, innovating to better satisfy the increasing and continuously changing demand of the market

5) Responsibility

Development associated to social responsibility is the tradition of Mobifone The company commits to provide advanced products and services of mobile communication services to society, take responsibility to society for a sustainable future

* Cultural standards of Mobifone

1) High quality Services

2) Polite and Fun

3) Transparent and Cooperative

4) Fast and Accurate

5) Dedicated and Creative

2.1.4 Business performance

Business performance is an important indicator to assess the business efficiency of enterprises In order to know more about the operation of VMS - Mobifone Company, we should have look at these following criteria of business performance:

Table 2.1 Business performance of VMS - Mobifone (2006-2010)

CU: Billion VND

Gri a) 3G Business Strategy Building for |} MS — Mobifone Company

in their market

Business performance for 3G service of VMS — Mobifone by 30th, September 201 1

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(Source: Finance - Accounting department of VMS - Mobifone)

It can be seen from table 2.2 that business performance for 3G service of VMS — Mobifone is very positive Revenue for 3G service in the following year is always higher than the previous year with the growth rate of 42.96% (2,929 billion

VND) Besides, profit over the years increased to 46%, this shows 3G is very

potential to develop in Vietnam Although there are many difficulties in early stage

of service deployment, the company achieves remarkable results due to the effort of leadership and suitable business strategies

According toa survey of mobile Internet market share in Vietnam (2011)

of YahooGroup, MobiFone stand intop 1 at a rate of 60% This result is due to

a pioneer in promoting the development of 3G services in Vietnam Following by VinaPhone and Viettel with 26% and 11%

In fact, at the moment, we provide 3G network MobiFone is always leading the stimulus of this service The opening series of large deals, with the advertising campaign for the general 3G_ service, subsidizing terminals this has helped the network won the hearts of users Comes with it, 3G is always stable quality, high- speed access is what makes a winning MobiFone user's preference.(According

to Nguyen Tuan, ICT News)

With these results can be seen as 3G is a strategic business unit of VMS - Mobifone and to further the continued success of the company to build their own policies, its own strategy to bring services best to consumers

2.2 The factual situation of 3G business of VMS - Mobifone

2.2.1 3G concept

Generally understanding, 3G technology (third generation technology) is the 3rd generation of broadband standards for mobile communication 3G standard allows wireless transmission of voice data (speech) and non-speech (emails, photos, videos, ete.) Thus 3G services are application-based services including:

Griccd) 3G Business Strategy Building for VMS — Mobifone Company

Video Streaming: Watching videos on mobile phones with high quality picture and sound, no stutters or sound delays, Internet access

Video Downloading: Users of 3G service can download movies directly via mobile phones with high speed thanks to broadband transmission

Mobile Payment: Allows users to connect with electronic devices in the office or at home via mobile phones

Music, game, e-mail downloading and other application of broadband [Internet can be performed based on 3G technology

In general, 3G technology is mobile broadband connection

2.2.2 Development of 3G services in the world

Eight years after the Japanese carrier NTT DoCoMo launched the first 3G network, the total number of subscribers worldwide to date has reached 500 million

This is a major surprise statistics even the professionals operating in the telecommunications sector, by 3G technology is still arelatively new contacts in many areas, many countries around the world More impressed to learn that, in the history of telecommunications development, the telephone network to a fixed table

in the world it takes more than 100 years to achieve equivalent total subscribers, while mobile 2G also takes action to a decade to achieve that remarkable milestone

To statistics, the world has more than 300 UMTS networking, including more than 35 HSPA networks are active, with more than 200 million customers In other words, nearly 40% of 3G_ subscribers worldwide are currently using the technology transfer of high-speed HSPA data (Le Anh, Vietnam post office)

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2.2.3 Development of 3G services in Vietnam

On August 11" 2009 Ministry of Information and Communications issued 3G_ licenses to Viettel, VinaPhone, MobiFone and the joint-venture of Hanoi Telecom - EVN Telecom It is the first time Vietnam has licensed in the form of examination based on international experience and factual condition

After 18 months of deploying services, enterprises have had 30.334 3G base transceiver stations all over the country, and even some companies have implemented in excess of commitments in 3 years after licensing date 3G coverage

by population and areas of national territory reached from 54.71% to 93.68% Businesses reused 100% available 2G BTS infrastructure to deploy 3G BTS The average growth of 3G capacity per month for data services is from 5.4% to 34.32%

Regarding services, the total number of 3G subscribers reaches more than 8

million subscribers with Internet access speed up to 7.2Mb/s and the call success ratio achieves more than 98%

By the time of December 31“ 2011, the total number of investment capital in 3G network after one year deploying the license will have reached the amount of more than 1700 billion VND The expected time for turnover capital is from 3.21 to 5.63 year The total revenue of 3G services includes revenue rate of voice service

and data transmission service, which made up for 3,600 billion VND

The use of 3G USB to access Internet quickly brings the services to remote areas with the competitive charge of ADSL service, contributing to narrow the gap between rural and urban areas, improving living standard and information accessing ability in rural areas

2.2.4 3G business performance of VMS - Mobifone

Mobifone is the 2" mobile network after Vinaphone officially launching 3G

on December 15" 2009 Mobifone provides 5 main services: Video Call, Mobile

Internet, Mobile TV, Fast Connect (access Internet via mobile broadband) and WAP

portal Mobifone's 3G network allows customers to access the Internet, receive emails or digital services with speed up to 7.2 Mbps In addition, Mobifone has

Gpío3) 3G Business Strategy Building for VMS — Mobifone Company

After a year of deployment, the total number of 3G subscribers of VMS - Mobifone has been over 4 million In 2010, the company has invested nearly 2,500 billion VND in installing 3G stations The initial investment has earned 6,818 billion VND from 3G services Although initial business performance is not quite high, rate of 3G Mobifone’s success is high due to the advantages of service quality

According to experts in telecommunications, the demand for 3G services depends not only on the mobile network, but also depends on the customer's terminals 3G mobile is still quite expensive, so customers using 3G in the first few years are in mainly in the largest urban areas, densely populated Therefore, the

guaranteed to meet demand for using services of potential customers but not to waste the network When demand began to increase in the densely populated urban areas, MobiFone will invests in other urban areas to catch the market demand Networks are always the most optimal in investing and using In addition, the reasonable investment of this network also helps to remain the best quality network

- this makes MobiFone be No 1 in quality in the market today (Source: attp://mtsjsc.com.vn/index.php/vien-thong/mobifone/408-mobifone-co-th-mnh-gi- shi-trin-khai-3g.html)

2.3 External environment analysis

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ee) 3G Business Strategy Building for VMS — Mobifone Company

2.3.1.1 Political - Legal factors

Deriving from an agricultural country Vietnam has gradually shifted

telecommunications and Internet have been increasingly focused in investment and development On September 22" 2010, Prime Minister approved the project

“Bringing Vietnam soon becomes a country with information technology — telecommunications strengths” On November 10" 2009, XII National Assembly approved “Bringing information to mountainous areas, remote areas, border and island” They were the good chances for telecommunication enterprises to develop and penetrate into new market

telecommunications enterprises, the Assembly approved the telecommunications law on November 11" 2009 The promulgation of this law would enable eligible telecommunications companies to have standard framework for operation Besides,

it also prevents the ineligible enterprises from investing in the industry It is not only a chance but also a challenge for all current telecommunications businesses

2.3.1.2 Economic factors

In recent years, due to the impacts of global economic crisis, GDP growth of Vietnam decreased in 2008-2009; however, there witnessed the positive recovery with the growth increasing by 6.8% Besides, the income of Vietnamese people is increasing day by day In 2006, the capita income was 11,694 VND whereas in

2010, it rose to 22,787 VND, nearly doubled (Table 2.3) According to economic experts, the economy of Vietnam has the possibility of recovery but not stable in coming years It also has considerable impacts on investors’ psychology when they want to invest to expand business

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2.3.1.3 Socio - cultural factors

Vietnamese income has increased dramatically, it was 11.694 thousand VND (2006) the figure reached 22.787 thousand VND When income rises; viewpoint of life demand of using high quality branded services will change much especially in