G1_00223 STRATEGIC DEVELOPMENT OF 3G PRODUCTS - SERVICES OF MOBIFONE PERIOD 2011-2015 CHIẾN LƯỢC PHÁT TRIỂN SẢN PHẨM - DỊCH VỤ 3G CỦA MOBIFONE GIAI ĐOẠN 2011-2015

G1_00223 STRATEGIC DEVELOPMENT OF 3G PRODUCTS - SERVICES OF MOBIFONE PERIOD 2011-2015 CHIẾN LƯỢC PHÁT TRIỂN SẢN PHẨM - DỊCH VỤ 3G CỦA MOBIFONE GIAI ĐOẠN 2011-2015

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GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM

Duong Quang Minh

CHAPTER I: THEORYTICAL BASIS OF BUSINESS STRATEGIC PLANNING

Tà 1n 1n 1n n1 c5 ceeded bits etd levis cetcttcetettvsetsctetiecestsitscietieciectesttiesettiseesiettesieettececn II 1.1 Definition of strategy in business ¬"¬ et tetececcetetees ee ee eT II 1.1.1 Definitlon 0Ï SETA[€ĐV 22002222 nh HH nhanh ne 1] 1.1.2 Roles of strategy to the enE€TDTISC 2 2221222 Hee II 1.2 Classification of businesS SrAt€ØICS 22222222 222 hnh 12 Lak Toyo øÍ typlenl SITHEGPÍGS ae: aes 86 cee vs wn wd GD Rk wi Se 5 a a 12 1.2.1.1 Intergration strategy QrOUp 222220222 nh HH HH kh 12 1.2.1.2 Intensive strategy 8TOUD 22.222 c2 chanh ere 12 I.2.1.3 Expansion strat€ØV ĐØTOUD co ch HH hà HH haee 13

1.2.2 Point of view of Michael Porter about typical strategies 13 1.3Strategic developmen[ DFOC€SS Q.20 22H He 14 1.4 Analysis of external enVironmef che 15 1.4.1 Analysis of macro enVvITOnm€II à 22 22ha 1Š 1.4.2 AnalySis OŸ miCrO enVITONT€TI à 0 22112 122tr HH HH He 17 1.5 Analysis of internal enterprise envIronimm€nI{ c che 18 1.6 SWOT analÌySIS 2 22 222002222 nhàn HH HH kg 19 l.7 Assessment matrixes to facilitate effective strategy selectlon 19

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1.7.1 Process of forming an overall strategv TH nà He 19

1.7.2 Sector analysis: External Factor Evaluation (EPE) 0 20

1.7.3 Séeter analysis: Comipetitrve irtaE THAHTDX ca si nà Bố nở ph Hà vớ nở Hới nàng mà 20 1.7.4 Analysis of company operation: Internal Factor Evaluation matrix (IFE) 20 1.7.5 Strength, weakness, opportumty threat matrtx (SWOIT) 20 1.7.6 Strategy position and action evaluation Matrix (Space) 21

I.7.7 Internal - External Factor Matrix (IE) 222222222 22222 Hinh 2I

1.7.8 QSPM mA[FIX L2 2222222202222 22 nh ng nh HH neo 2] CHAPTER If; THE CURRENT SITUATION OF PRODUCTION AND BUSINESS

OF MOBILE TELECOM SERVICES COMPANY re 22 2.1 General introduction about the Mobile Telecom Services Company an

22 Yistory of formation amd de weko pment os os wc ne ors BH wm om nm cart se ee ges ors arse ee pon 22 2.3 Vision, mission key values, cultural values of Mobifone 23 2.4 Organizational structure of COmpany ch ee 25 2.5 Currently exploited products and S€FVIC€S ccc 26 2.5.1 ProdUCfS 2.2222 2c020022 nnnHhHh hHà Ho Hà nhà HH Ha 26

PP ›° ccc eee cede tec bteeecceeeceseeescentiteenirentresietentteee 27 2.6 Some noble rewards granted to MobiFone in the recent years 27 2.7 Production and business outputs of MobiFone In the recent years 28 2.7.1 Properties and capital in the recent years oo etter 28 2.7.2 Growth in subsCrIb€FS 2 222 12 hen Hà He He 30

sp 5 n ẽ ẽ eeu ee we xe MS MLW de SOG OE SE 3 a 30

su N : na 32 2.7.5 _Implementation of responsIbilities to the Stafe 33

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2.8.1.3 Financial resource eee ce eect eect te tte tetecteeeeseeennees 35 2.8.1.4 Human reSOUTC€ 222 022220222 nh HH ghe Hdk ng 35 2.8.1.5 Corporate Culture Q2 c2 nh HH HH Hà HH Hà Hành Hàn ch 2.8.1.6 InÍTASITUC[UT€ 2.22220222000222 c1 nh HH HH 35 2.8.1.7 Distributon channeÌ 22222022222 nh HH ho 36 2.8.1.8 PrOdUCS 222222 2200200022222 2c n1 11111 k xá 36 2.8.l.9 Cheality mia erent Sy SHOT se aes cok soe are matte A td aw nll 3, Oh a WR SỬA 37 2.8.2 Weakn€©sS©S 222 020220112221 1n thành HH kh hay a7 2.9 Analysis external environment of MobiFone 0000.0 cee 38 2.9.1 Analysis of macro €nVvITOnNM€TI 2222 nh HHHhHehere 38 2.9.1.1 Domestic economic situation in 20 Ô c2 c2 hreeeeo 38 2.0.1.3 Population, gebđ6T, đữ6 sec các co óc tte wo II Cấu # hd Sn a 38 2.9.1.3 Cultural — soctal SIIUAHOR 222022 2 nhanh re 38 2.9.1.4 Scientific, technological situation 0.00.0 c2 nh no 39 2.9.1.5 Globalization ooo ec HH HH kh Hàng 39 2.9.1.6 Political, legal situation c2 221122112 HH He 39 2.9.2 AnalysIs of sector environment (Micro environment) 40 2.9.3 Analysis of COmp€(IOFS 22.02 02212 2 HH HH Hành Heo 43 2.10 Identification and analysis of limitations and weakness of 2G products — services in the Currenf SIUALIO' s22 222 22 Hee 47

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3.1.2 Some terecast the market trend of mobile communication in the world and

VCC AIN eee ete b ebb cb be teeeeeeeeebeeeeeeeestnreteeeescrttettensrtsenenees 49 3.1.3 Objectives of MobiFone in period of 2011 — 2015 oes 50 3.2 Strategic selectloOn MAatriX ee eee et tee tienen 32 3.2.1 External factor evaluation matrix (EFE) 2222222222 52 3.22 Internal factor evaluation matrix (TFE) 22ha 54 D235 ClơtfiB6LHiffve iriãaEE THấUTÌN so cà các, wok BA BI BH G BI G028 TH E33 9M 55 3.2.4 SWOT analysis Matrix ooo ccc eect HH net 56 3.2.5 Matrix on strategy position and action analysis (Space) ee 58 3.2.6 Matrix of internal — external factors (IE) eects 6] 3.27 Strategic planning matrix with quantitative QSPM 62 3.3 Stratepy imifl6ffieTÍSG@H oi „set nà tấn SH Bn HƠI AG Oa AG HH Ket AG eA 67 3.3.1 EFinanclal fiafasefieffẨf se s vớ Đĩ ye 4h oh Ba BMS Bm OR GHI D714 67 3.3.2 Human resource manaØ©em€I c2 nhe 67 3.3.3 Differentiation SIra[€ØV ch nha HH ghi 67 3.3.3.1 Methods to ensure quality Of SErVICE oo ccc cence eter etter 69 BD) CNMSBORRET CATE ee nen cr wow me onisenm oven ene rene aeons nv eevee P 8 20 2 Oe wD IE 70 3.3.4 Market development Sfrat€8yV chua rai 3.3.4.1 Network developmen( cc cv nh HH HH He 7] 3.3 AD, Mier eel cee hope I ae sa co ees cn coo sn se am > ee mo tes oe 72

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Figure 1.1: A comprehensive model of strategy management .00.0000 14 [Figure I2: The factors aflecting the macro environment 16 Figure 1.3: Model of five competiton forces by M Porter 17 Figure 1.4: Prowess Ơf etraley [OTTHGIIGH e gác vại HÝ nh wt 1x9 mee wis more wa oe as we L) Figure 2.1: Organization structure Of VMS óc che aa Figure 2.2: Growth in subcribers of MobiFone In the recent years 30 Figure 2.3: Revenue of MobiFone mn the Tecent YOArSs vas care ws os sce oa ere pee ore ew oe an es 3l Figure 2.4: Weight ratio of revenue voice and services in the recent years 3] Figure 2.5: Weight ratio of revenue services In 201Q 0 ee a2 Figure 2.6: Profit of Mobilone in the recent years 32 Figure 2.7: Weight ratio of profit and revenue in the recent years 33 Figure 2.8: Implementation of responsibilities to the State of MobiFone in the T€C€n{ y€aFS TT TT tt xnxx 111111111111 này 33 Figure 2.9: Market share of mobile operators in WTA aca oo cha Hà ose ome om a a oe 34 Figure 2.10: Market Share of mobile phone subscrIber 44 Figure 2.11: ARPU comparison diagram by years (prepaid-postpaid services) 48 Figure 3.1: Number of 3G subscribers 1s expected ee 51 Figure 3.2: Market share 2G/3G subscribers of MobiFone is expected S| Eigure 3.3: Total 3Œ revente is 6XP€ClG on sơn sài Sẽ so nee aoe ome an oe aD a 52 lipure 3.4: The position oF MobiFone in Space MatrIx 60 Figure 3.5: Brand awareness in the market of mobile communication .0 68 Figure 3.6: Positioning the brand - 3G services of MobiFone 69 Figure 3.6: Network imvestment pÏan cà c2 che 72

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Vietnam Mobile Telecom Services Company (VMS) is the first mobile phone Operator exploiting GSM 900/1800Mhz in Vietnam VMS has provided the services since 1994 and operated with the brand name of MobiFone, marking the start of mobile telecommunication market in Vietnam The business operation of MobiFone

is to construction design, supply of mobile telecommunication services Since 1994, MobiFone has successfully exploited products, services based on 2G Customers are provided with various products, services and charge package with the best customer Services

The mobile telecommunications market in Vietnam is an active, harshly competitive market between service suppliers and restricted in developing potential To help VMS to rapidly provide varied 3G products, services to gain market share in Vietnam, we carry our the theoretical research about product - service development strategy, competition strategy, analysis of business and production situation of Company in order to develop a development strategy for 3G products and services of MobiFone in the period of 2011 - 2015

- Research objective and application capacity:

The objective of this thesis is to develop the development strategy for 3G products and services of MobiFone in the period of 2011-2015 expected to

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Research method:

We make use of qualitative and quantitative method based on the market research data forecasts from specialists, customer feedback, or expected demand for mobile service, subscriber growth rate, as well as the situation of 3G product and service deployment of some countries in the region and in the world, the data 1s provided by VMS In addition, we also base on the data publicized on the websites of the agencies or branches such as General Department of Statistics, Ministry of Information and Communication, or specialized websites on information — communication, especially in 3G sector

Structure of the research: This thesis consists of 03 chapters:

Chapter 1: Theoretical Basic of Business Strategic Planning;

Chapter 2: The Current Situation of Production and Business of Vietnam Mobile

Telecom Services Company (VMS),

Chapter 3: Development Strategy of 3G Products - Services of VMS in the Period of 2011-2015

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THEORETICAL BASIS OF BUSINESS STRATEGIC

PLANNING

i.| Definition of strategy in business

1.1.1 Definition of strategy

Some definitions of strategy:

According to Alfred Chander: “Strategy is the process of determining long- term basis targets of company, selection of way or action direction and distribution

of essential resources to perform those targets";

According to James B Quinn: " Strategy is a form or plan to coordinate main targets, policies and procedures into an united form",

According to William J Glueck: “Strategy is an united, comprehensive and coordinative plan which is designed to ensure that basic targets of company will be performed”

There are many definitions about strategy However, we can generally define strategy as follows: “Strategy is a series of the complicated action plans to mobilize the resource of an organization to achieve a specific objective”

1.1.2 Roles of strategy to the enterprise

The development and management of strategy facilitate the enterprise in following issues:

- To achieve the long-term and sustainable objectives of the enterprise

- To grasp the market or market segment traded by the company or the business strategy to be applied

- How can the enterprise hold the upper hand compared with the rivals in the market in term of specific customers?

- The resources to be used (people, skills, properties, finance, technological know-how) to achieve such objectives

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- The values brought to the owner and the society by the enterprise as a member

Classification of business strategies

1.2.1 Types of typical strategies

According to Fred R.David, it is possible to divide strategies into 14 types of typical strategies and 04 groups as follows:

1.2.1.1 Integrated strategy group

Forward intergration: this type is related to the increase of ownership or control

to distributors or retailers An effective method to implement this combination strategy is transfer of right The enterprises can develop rapidly through transfer

of right since the cost and opportunity are divided to many individuals:

Backward integrated: this type is related to the search for ownership or control of company’s suppliers This strategy 1s especially suitable when the current suppliers of the company are not reliable, expensive or fail to satisfy the requirements of the Company;

Horizontal integrated: this strategy is related to the discovery of ownership or control to rivals The merging, acquisition helps to improve the effectiveness of the scope, and increase the exchange of resources and capacity

1.2.1.2 Intensive strategy group

Market Penetration refers to the search for additional market shares for current products and services in the existing markets through marketing efforts Market penetration includes the increase of sales staff, advertisement cost, production products or advertisement efforts;

Market Development refers to the launching of existing products and services to

new sectors;

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Product Development refers to the increase of turnover by the improvement or adjustment of existing products or services Product development requires high research and development cost

1.2.1.3 Expansion strategy group

Diversification of concentric activities means the addition of new but interacted products or services;

Diversification of activities in horizontal manner means the addition of new products and services those have not relation for existing customers,

Diversification of activities in combined manner means the addition of new products or services without interaction

1.2.1.4 Other strategy group

Joint venture: two or more companies form an independent company for cooperative purposes;

Operation contraction refers to the consolidation through cost and property cut to save the dropping revenue and profit;

Activity cut-down refers to the selling of a branch or a part of the company; Liquidation means the selling of all the properties, partially, with tangible values;

Combination pursues two or many strategies at the same time

1.2.2 Point of view of Michael Porter about typical strategies

According to Porter, typical strategies enable company to get competitive advantages from three different aspects:

Cost strategy refers to the manufacturing of standardized products at low unit price for price-sensitive customers;

Differentiation refers to the strategy aiming at the production of service products considered as specific in the sector for customers those are not sensitive to the

price;

Focus on the main point refers to the production of products and services to meet

the demands of small groups of customers;

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One reason for pursuing forward strategy, backward strategy or horizontal strategy 1s

to gain the benefits of price orientation

Product development is a typical strategy with many advantages for the product distinction (differentiation strategy) The successful product distinction means the higher product flexibility, greater combination ability, lower cost, improved services, fewer maintenance, more comfortability, or more specific traits

The strategies such as market penetration, market development provide much advantage

1.3 Strategic development process

and current} | business natural | | | and

development | implementatio evaluation

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Figure 1.1: A comprehensive model of strategy management

(Source: [3,page.27])

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Strategy implementation or action period of the strategy management aims at mobilizing managers and staff to implement the proposed objectives The three basic activities of strategy implementation involve establishment of annual objectives, policy introduction and distribution of natural resources This period

is considered as the most difficult period in the strategy management;

- Strategy evaluation is the last period of strategy management All the strategies depend on the future changes due to regular changes of internal and external factors The three basic activities of this phase involve (1) review of factors as basis for current strategy, (2) achievement measurement, and (3) implementation

of adjustment activities

1.4 Analysis of external environment

1.4.1 Analysis of macro environment

The external environment refers to all the external factors those can not be controlled

by managers but impose significant influence on the growth and profitability of each company Analysis of the external environment is involved in the analysis of the macro environment and the sector environment (micro) The analysis of these factors helps the enterprise to identify its position and the features of the environment, the current age, and to learn the impact of the external environment to the enterprise so that it can make decision suitable with the strategy planning

The changes in the macro environment may impose direct impact on any force in the sector, resulting in the change of relative power between the forces and the

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Cultural and social factors

Social factors also attracts the interest of enterprises in the market research Social factors will divide the community into different customer groups of different features, psychology, income

- The average expectation of life, health situation, nutrition, feeding;

- Average income, income distribution,

- Living style, knowledge, aesthetic opinion, living psychology;

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Demographic factors refer to population, age structure, geographical distribution, ethnic community and income distribution

Political, legal factor : The factors of influence are:

According to Michael Porter, there are five competition orienting forces within the sector including: (1) New entrant; (2) Rivalry between the current firms: (3) Bargaining power of buyers, (4) Bargaining power of sellers, (5) Threats of

Suppliers Competitors h= Buyers

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Competition pressure of supplier

- The quantity and scale of suppliers:

- Product substituting ability of suppliers:

- Information about suppliers

Competition pressure of customers

Customers are classified into 2 groups including retail customers and distributors These both groups can create pressures to enterprises in term of product price, quality as well as the enclosed services They can control the competition in the sector by deciding to buy the goods and services

Competition pressure of implicit rivals

According to M-Porter, the implicit rivals of the enterprises have not appeared in the sector market but can influence the sector in the future

Competition pressure of substitute products

Substitute products and services refer to those can satisfy the similar demand of customers for products and services in the sector

Competition pressure within sector

The enterprises in the sector will compete directly with each other to create the pressure on the sector and form the competition intensity Following factors of the sector will increase pressure on the rivals:

- Sector situation;

- Sector structure

1.5 Analysis of internal enterprise environment

To exist and grow, all organizations must carry out the activities including management, finance, accounting, production, business, research & development, marketing and have information system In each operation sector, each organization has its own strength and weakness

Analysis of internal environment is an important and essential part of strategy management If the analysis of internal environment is not carried out well without the right identification of strength, weakness; perfect strategy can not be established

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The enterprise identifies the opportunities and threats through data analysis of the changes in the environment including economic, financial, political, legal, social enviroment and competiton in the markets in which the enterprise is currently operating or plans to enter

Regarding the analysis of the enterprise’s internal environment, the strength in enterprise organizing may be skills, resource, and advantages over the rivals (key capacity of the enterprises) The weak aspects of the enterprise is expressed through the shortcomings or weakness or poor skills, resources and the factors reducing the competitiveness of the enterprise

i.7 Assessment matrixes to facilitate effective strategy selection

1.7.1 Process of forming an overall strategy

According to Fred R David, the strategy formation includes 3 stages including penetration, combination and decision

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Stage 1: Penetration External Factor - Competitive ‘image matrix External Factor Evaluation —

External Factor Evaluation enables strategists (o summarize and evaluate economic, cultural, social, demographic, geological, political, government, technological and competing information

1.7.3 Sector analysis: Competitive image matrix

Competitive image matrix helps company to identify the rivals, their strengths, and weakness to help Company to develop proper business strategy

1.7.4 Analysis of company operation: Internal Factor Evaluation matrix (IFE) This matrix summarizes and evaluates the important strength and weak point effecting the functional business departments and the production business of the enterprise

1.7.5 Strength, weakness, opportunity, threat matrix (SWOT)

SWOT matrix is an important combined tool for the development of 04 types of strategy as follows:

- Strength - opportunity strategy (SO): Use strengths to make use of opportunities,

- Strength — Threat (ST): Use strengths to avoid threats;

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- Weakness - Opportunity (WO): Overcome weakness by taking advantage of opportunities:

- Weakness — Threat (WT): Minimize weakness and avoid threats

1.7.6 Strategy position and action evaluation Matrix (Space)

Strategy position and action evaluation matrix is used to evaluate the operation of the business, and determine the location of the business in the market The axis of this matrix represent the two aspects within the organization: financial strength (FS) and competitive advantage (CA) and two outside business aspects: environmental stability (ES) and strength of the sector (IS)

1.7.7 Internal - External Factor Matrix (IE)

IF; matrix is based on the two main aspects including the total scores of importance

of IFE on X axis and the total score of importance of EFE on Y axis

[E: matrix may be divided into 3 big sectors, each of which is comprised of various strategies

1.7.8 QSPM matrix

QSPM (Quantitative Strategic Planning Matrix) aims at the evaluation and ranking

of strategic options so that we can have basis to select the best strategy for the enterprise

This matrix makes good use of information, data from the matrixes mentioned above including EFE matrix, Competitive image matrix, IFE matrix, SWOT matrix, Space matrix, IE matrix, and the grand strategy matrix This is the tool to carry out objective evaluation of alternative strategies, which is firstly based on the grand

internal and external factors to success

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THE CURRENT SƯFUAA THON OF PRODUCTION AND BUSINESS OF

MOBILE TELECOM SERVICES COMPANY

2.1 General introduction about the Viobile Telecom Services Company

Official name: VIETNAM MOBILE TELECOM SERVICES COMPANY

International transaction name: VIETNAM MOBILE TELECOM SERVICES

2.2 History of formation and development

Vietnam Mobile Telecom Services Company - VMS, a state-owned company under Vietnam Posts and Telecommunications Corporation, was founded in April 16th

1993 VMS has become the first GMS 900/1800Mhz mobile telecommunication

services provider in the brand name of MobiFone, marking the beginning of the mobile telecommunication industry in Vietnam

MobiFone specializes in building, developing network and providing mobile telecom

Services

1993: Foundation of Vietnam Mobile Telecom Services Company (VMS),

1994: Foundation of the Mobile Telecom Services Center I & II with the headquarter located in Hanoi and Ho Chi Minh City;

1995: Foundation of the Mobile Telecom Services Center II with the headquarter located in Da Nang city;

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2009: Receipt of the most excellent mobile network in 2008 granted by Ministry

of Information and Communication; official supply of 3G service; foundation of Billing Center;

7/2010: Conversion into a one member limited company owned by the State: 12/2010: Foundation of Mobile Telecom Service Center VI located in Bien Hoa City

2.3 Vision, mission, key values, cultural values of Mobifone

+ Continual creativity aims at providing new added values to customers;

+ All information is shared in the most explicit manner;

+ VMS will be the trustful place for interest sharing for staff, customers, shareholders and community

- Key vaiue of the Company

+ ‘Transparency

Transparency is expressed through the awareness to action of each individual

in the Company Transparent management, cooperation, responsibility and right are always ensured

+ Consensus

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We are proud of the outstanding of the top trade mark in mobile telecom sector in Vietnam Customers are always cared, served and provided with various options The closeness and determination to make the difference helps MobiFone to take a special position in the heart of customers

+ Creativity

MobiFone does not satisfy with what it is having but always strives, learn, creates and innovates to better meet the increasing demand and continuous changes of the market

+ Responsibility

The development attached to the social responsibility 1s tradition of MobiFone We commit to provide the society with the advanced mobile products and services, to share the responsibilities with the society for a sustainable future

Cultural standard of MobiFone:

High-quality service

Politeness and joy

Transparency and cooperativeness Rapidness and accuracy Dedication and creativity

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GENERAL DIRECTOR

DEPUTY DIRECTORS

EXPLOMATION PPERATING ssn CUSTOMER CARE DEPT

_ TARRIF AND MARKETING ©

PLANNING AND SALES DEPT —-—~ STRUCTION INVESTH

PROJECTASSESSMENT = _| .| IMPORT AND EXPORT DEPT

|| Provincial District || Provincial {Provincial [provincia Provincial L TM

Figure 2.1: Organization structure of VMS

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Title “The most favorite mobile network 2008”, “The best customer care

network 2008” voted by Vietnamnet Online and EchipMobile Magazine,

Title “The most excellent mobile phone enterprise” granted at Vietnam ICT Awards 2008 by Ministry of Information and Communication;

- Tithe “The best customer care mobile phone enterprise 2008” granted at Vietnam ICT Awards 2008 by Ministry of Information and Communication

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2.7.1 Properties and capital in the recent years

2.7 Production and business outputs of MobiFone in the recent years

Table 2.1: Properties and capital in the recent years

Unit: million dongs

I Short-term financial investments 2 589 185 882 4.484 74o 024 1,634 401,758

1V Other long-term properties 141,561,885 250,423,403 432,640,930

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Table 2.2: Properties and capital structure of Mobifone in the recent years

- Long-term- properties/ Total properties 26.83 30.61 50.56

- Short-term properties/ / Total properties — 73.17 69.39 49.44

- Payable debts/Total capital source 21.28 25.40 31.10

‘| - Owned capital/ Total capital source 78.72 74.60 68.90

(Source: Internal documents of MobiFone company [14])

- Property structure: Company has short-term properties/total properties decreasing from 73.17% in 2007 down to 49.44 in 2009 In this period, Company focused on expanding the network, devices, coverage; however, the possibility to convert

properties into the money Is still high;

- Capital source structure: Company has the low ratio of debt/owned capital, which shows good and secure financial situation of the Company

29

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Figure 2.2: Growth in subscribers of MobiFone in the recent years

(Source: Internal documents of Mobifone company [14 ]) 2.7.3 Revenue

Since the establishment, company has gained outstanding growths in term of revenue The revenue of the previous year is also higher than that of the following year and higher than the plan

In recent years the proportion of service revenue increased especially from 2009,

2010 by the company to provide 3G services and offer new services on the 3G network

The growth in revenue and the share of services increased during the period 2009 to

2010 also proved to provide 3G services aspect to be effective and true to the trend

of the market

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Figure 2.3: Revenue of Mobifone in the recent years

Figure 2.4: Weight ratio of revenue voice and services in the recent years

(Source: Internal documents of MobiFone company [14])

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i MCA (0.26%) m™ Mobilist (0.06%) others (0.16%)

Figure 2.5: Weight ratio of revenue services in 2010 (Source: Internal documents of MobiFone company [14])

2.7.4 Profit

Billion Vnd

6,500 6,000 5,500 5,000 4,500

| 4,000 3,500 3,000

| 2,500 ' 2,000

(Source: Internal documents of MobiFone company [14]) Ratio of annual profit/revenue increases highly, which creates conditions for

company to re-invest in infrastructure

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Figure 2.7: Weight ratio of profit and revenue in the recent years

(Source: Internal documents of Mobikone company [14]) 2.7.5 Implementation of responsibilities to the State

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- Mobile network are most popular;

- Mobile network has best customer care;

- Mobile network has best quality of products and services,

- The best mobile network

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Figure 2.9: Market share of mobile operators in Vietnam

(Source: Internal documents of MobiFone company [14,15,16]) With a market share in the top two mobile operator in Vietnam, the advantages for MobiFone in implementing the business strategy

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Mobifone is evaluated as an enterprise with strong and transparent financial capacity

In the recent year, Mobifone always leads in the state tax contribution In 2010,

MobiFone has been listed to Top 20 biggest enterprises in Vietnam by Vietnam Report,

2.8.1.4 Human resource

Scale of more than 4,500 employees nationwide, in which 83.2% hold university degree or higher and the average age of 32, is evaluated as the work force of young, dynamic, honest and always work hard for the survival and development of the company

2.8.1.5 Corporate culture

Mobifone creates company culture with the objective, mission and vision suitable with the Company strategy:

High-quality service Politeness and cheer

‘Transparency and cooperativeness Rapidness and accuracy Devotion and creativeness Enterprise culture has penetrated into each company staff, customer contact officers, customer care officers and customer answering staffs

Annually, Company carries our or has other enterprise implement audit on corporate culture implementation and commitments to customers by MobiFone

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Mobifone establishes huge material facilities with the number of 20,000 BTS (2G) and 6000 node B (3G); 13,000 transmission lines, 65 millions of subscribers In the recent years MofiFone has expanded the coverage to the rural, mountainous area and islands: however, the coverage is stil] weaker than some rivals in the industry

In 2010, Mobifone and Vinaphone opened subscriber roaming with each other, which is a big competitive advantage for two networks to make use of infrastructure

of each other and expand the coverage

2.8.1.7 Distribution channel

From the slogan “Strong agencies support strong MobiFone”, the distribution network of MobiFone is established on the basis of three main distribution channels including MobiFone shops, Direct Sales Networks and MobiFone Agency System,

in which, MobiFone agency system 1s a breakthrough to gain effective business Agency system includes general agency, specialized agency and retail store

- Mobifone stores: 125/ country and expected to expand each district/store in the

country in 2011;

- General agency: 75,

- Specialized agency: 2500;

- Retail stores: 15,000 selling points;

- Direct sales: 15,000 charge collecting and sales collaborators

2.8.1.8 Products

With more than 10 products and 50 services, MobiFone products and services are diversified, direction specific to each customer segment, with each specific package, Incentives, appropriate, meet customer needs

Some packages of products and services:

- Business: Mbusiness;

- Young: Mfriends, Qteen, Mobi4U;

- Family: Mhome, MobiZone;

- Student: Qstudent, Mobi4U;

- Farmer: Mobi365

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2.8.1.9 Quality management system

The company has developed and successfully applied the process of ISO 9001:2008 quality management, are assessed and issued by TUV Nord Vietnam in 2008

2.8.2 Weaknesses

Although MobiFone’s network are covering 63/63 provinces/cities, however in some rural, island and border region has not been focused investment, the network

in there is limited compared to some competitors

Technical infrastructure is more hire outside, less redundancy, causing loss of network safety, especially in backbone transmission network

As a member of VNPT, so MobiFone is entangled more procedures related to mechanism such as: policies, scale and administration Especially equitization Although current rates of MobiFone services 1s competitive prices compared with competitors, or even lower, but communication low charge strategy 1s not good, in part due to the effects from brand strategy So feeling of customers about cost Is still high

Although the company has a network of distributors throughout the country, but retail is not good, depending on a number of major dealers, making the intermediate cost increases

Table 2.3: General strengths and weaknesses of Mobif one

Protound financial resource; | - Weak retail channels, high

Powerful image, trade mark; intermediate charge;

Nationwide retail network; - Depending on the distribution

Well-trained, active, and young personnel, network of some large agents;

Varied products to meet the demand of - Mechanism: policy, scale,

Being voted as the best-quality mobile - Weak Charge communication;

network, best customer care network for - Limited Coverage, especially rural

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The lowest fee: | - Infrastructure depending much on Transparency; partners, especially axis

High market share in Vietnam: | transmission

2.9 Analysis external environment of Mobikone

2.9.1 Analysis of macro environment

2.9.1.1 Domestic economic situation in 2010

According to General Statistics: Economic growth of Vietnam in 2010: the GDP, by the actual price, reaches 1.98 million of billion dongs This figure is equivalent to 104.6 billion USD (by the inter-bank exchange rate dated 28 December), higher than that in 2009 as 13 billion USD

If comparing with the original period (1994), the GDP growth rate of Vietnam in this year is about 6.78% against 2009 This figure is 0.3 higher against the plan approved

by the National Assembly in the beginning of the year The growth rate is on the increase with the peak in quarter IV (about 7.3%) In term of sector structure, industry and construction gains the strongest rate (7.7%), service 7.5%, while agriculture 2.8%

With the stable growth of domestic economy, help VMS have long-term strategy in developing business

2.9.1.2 Population, gender, age

According to General Statistics: Vietnam’s population by 2010 is young with the high ratio of 10-20 year olds (> 18.5%), 20-40 (>33%), this trend has not changed much in the period of 2011-2015 This is a young, active force as the main labor force in the society These two age groups will become the potential customer target

of MobiFone within the next 5 years

2.9.1.3 Cultural — social situation

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The period of 2011 — 2020 will be considered to gain high rate of industrialization, globalization, improvment in people life, which will attract people from rural area to the urban area industrial parks, resulting high increase in the population of the urban area In parallel with industrialization globalization, the deland for IT and communication will increase; therefore, the potential of communication enterprises

is stl high requiring strong approach to the new communication as 3G,

2.9.1.4 Scientific, technological situation

In the aspect of communication, especially mobile information, the third-generation technology (3G) will develop strongly, replacing traditional mobile information service (2G) Various type of services based on 3G will come into existence including voice and non-voice services According to Pyramid, it is possible to expect in the development of 3G to shorten the gap between the ratio of internet access in the areas and the ratio of low-brand use However, the mobile tele- communicatione operators must ensure the capacity of the network and the data transmission since 3G is the effective lever for the development of mobile broad- brand service

This is the opportunity for MobiFone in developing 3G products, services in order to increasing the market share and revenue, ocupying the local 3G market

2.9.1.5 Globalization

The globalization trend is the feature governing the age, in which our active integration to the international scale expressed through the joining of WTO, carries both opportunities and threats The technological innovation, especially ITC, and digitalization of production and service phases is taking place strongly, enabling the cooperation at the largest scale and highest rate ever The communication demand Is forecasted to increase strongly, which is the opportunity for domestic tele- communication including MobiFone to increase the revenue and ARPU/ subscriber 2.9.1.6 Political, legal situation

The political and legal environment of Vietnam in the period of 2011 — 2015 is considered as stable and improved in accordance with the trend:

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