Strategic developmentof joint stock company for telecom and informatics in period 2011 - 2015

ally try to reduce operating costs, either by cutting "excess fat" and operating more efficiently or by reducing the size of operations; - Divestment: Divestment involves selling off a p

Class: GaMBA01.C0409

Ho Chi Minh City, 2011

GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM

CAPSTONE PROJECT REPORT

Nguyen Xuan Hoang Pham Cong Khanh Nguyen Quoc Khanh Mai Huong Lan

1.7.8 Quantitative Strategic Planning Matrix (QSPM) 25 CHAPTER 2 BUSINESS OPERATION OF JOINT STOCK COMPANY FOR

3.2.2 Successful models in the regional countries 67

LIST OF ABBREVIATIONS

ISPs Internet Services Providers

LIST OF TABLES

Tables 1.1 Strategy formulation process 20

Tables 1.2 External factor evaluation matrix (EFE) 20

Tables 1.3 Competitive Profile Matrix 21

Tables 1.4 Internal Factor Evaluation Matrix (IFE) 21

Tables 1.5 SWOT matrix 22

Tables 1.6 Matrix of Strategic Position and Action Evaluation (SPACE) 23

Tables 1.7 Quantitative Strategic Planning Matrix (QSPM) 25

Tables 2.1 Business performance of CT-TN from Y2008 to Y2010 34

Tables 2.2 Analyzing changes in balance sheet of CT-IN during Y2008 – Y2010 35 Tables 2.3 Status of revenues and profits from 2006 to 2010 38

Tables 2.4 Analysis of some basic financial indicators 39

Tables 3.1 Targeted revenue of each year from 2011 to 2015 71

Tables 3.2 External factor evaluation matrix 72

Tables 3.3 Competitive Profile Matrix 73

Tables 3.4 Internal factor evaluation matrix 74

Tables 3.5 SWOT matrix 76

Tables 3.6 The Strategic Position and Action Evaluation matrix (SPACE) 78

Tables 3.7 Internal – External Matrix (IE) 81

Tables 3.8 Recommended strategies of each kind of matrix 81

Tables 3.9 The matrix to select the strategies (1/2) 82

LIST OF FIGURES

Figures 1.1 Comprehensively strategic management model of Fred R.David 14

Figures 1.2 Factors impacting the macro-environment 15

Figures 1.3 M Porter five-force model 17

Figures 1.4 SPACE matrix 24

Figures 2.1 Organizational chart of VNPT Group 28

Figures 2.2 Organizational chart of CT-IN 32

Figures 2.3 Charts the development of CT-IN 38

Figures 2.4 GDP growth on the monthly basis during 2008-2010 45

Figures 2.5 Month-on-month inflation rate in 2010 46

Figures 2.6 The number of Internet-users in the world 49

Figures 2.7 Managed Services market drivers 55

Figures 2.8 The circle of Managed Services growth 57

Figures 3.1 Managed Services structured from a scope and reward perspective 67

Figures 3.2 SPACE matrix diagram of CT-IN 80

FOREWORD

The Information and Communications Technology (ICT) is a crucial driver to the sustainable development and growth of our country, transparency improvements in the activities of state agencies, the saving of time and expenditure of agencies, organizations, enterprises and inhabitants The Project of "Turning Vietnam into a strong ICT country” approved by the Government is considered to be a “gold opportunity” for foreign and local enterprises/or incorporations to invest in the ICT industry

The ICT sector of Vietnam is a dynamic market bringing not only great potentials but also many challenges to ICT solution and service providers Telecommunication

- Computing - Post Joint Stock Company (also called Joint Stock Company for Telecom and Informatics or CT-IN) belonging to General Post Office (currently called Vietnam Post and Telecommunications Corporation - VNPT) has nearly 40 years of experience in the ICT industry and is one of the leading ICT-related product/service suppliers in Vietnam

Through the analysis of the current condition of the socio-economy and ICT industry in Vietnam, and of CT-IN’s business performance of, we would like to contribute to the Company some recommendations about development strategies in the 2011 - 2015 periods

Objectives and applicability of the research

The main objective of the thesis is to build up the development strategy for CT-IN from 2011 to 2015 (the period in which integrated managed services and mobile broadband technology are expected to develop strongly) With its many-year experiences in the ICT industry, CT-IN will take advantage of this opportunity to develop more diversified service/product packages to meet the market demand

Research methodology:

We use both qualitative and quantitative approaches Besides, the thesis is herein based on a market research data collection, ICT experts’ viewpoints, forecasts about the demand and growth rate of the ICT industry, and is referred to some successful integrated managed service models in regional countries and in the world

The data used in this thesis is partially provided by CT-IN and published on websites of authorities (i.e General Statistics Office, Ministry of Information & Communications, and VNPT) or the ones specialized in ICT

Thesis structure: includes 03 chapters as below:

to the research scope

to 2015; accordingly, it focuses on the model of integrated managed services

CHAPTER 1 THEORY OF BUSINESS STRATEGY

1.1.1 The concept of strategic management

The strategy is often considered to be a “product” of a rational planning process which is led by senior executives, but not everything In many cases, valuable strategies can arise even from the inside of the company, but without anything planned in advance

The strategic management is a set of management decisions and actions to

determine long-term performance of a company The strategic management includes continuous actions such as internal and external environmental review, strategy construction, strategy implementation, and strategy control and assessment Therefore, the strategy research focuses on the monitoring and assessment of external opportunities and threats that a company will potentially face by its internal strengths and weaknesses

The strategic management originates from business policies and long-term

projection However, contrary to the strategic management, business policies aim at the general management orientation and focus on the integration of internal departments’ functions Meanwhile, the strategic management focuses on not only

“strategic management” is commonly used instead of “business policy”

1.1.2 The role of the strategic management

The strategic management and build-up help enterprises:

- To fulfill long-term objectives of the company sustainably;

- To dominate the market or market segment in which the company is doing business; and to determine business tactics which should be applied in the coming time;

- To identify how to dominate market segments (with respect to each specific targeted customer group) in comparison with its competitors;

- To identify what resources should be used (human, skills, property, finance, know-how, etc ) to fulfill the goal;

- To determine potential external risks/ threats that may possibly affect the strategy implementation (i.e environment, competition, politics, natural resources); and to come up with risk mitigation plans; and

- To determine the values that the company will bring to end-users and the whole society;

1.2 CLASSIFICATION OF BUSINESS STRATEGIES

1.2.1 Specific kinds of strategies

According to Fred R David, strategies can be classified into 14 specific types and categorized into four groups as follows:

1.2.1.1 Integrative strategies

- Forward integration is related to increasing the ownership or control over

distributors or retailers An efficient way to implement the forward integration strategy is the franchise model Enterprises may possibly grow rapidly with franchise business model in which the cost and opportunities will be shared to many individuals

- Backward integration is related to looking for the ownership or control of the

company's suppliers This strategy particularly makes sense in case that the existing suppliers of the company are unreliable or incapability of satisfying requirements of the company

- Horizontal integration is related to finding out the ownership or control over

competitors The merger, acquisition and domination of the control power over competitors possibly enable the company to enhance the efficiency and the exchange of resources

1.2.1.2 Intensive strategies

- Market penetration: Pushing up the market share of existing products/ services

by intensifying marketing and promotion programs; the market penetration strategy includes rises in the number of salespersons, advertising costs, and promotional products or advertising efforts

- Market development: Introducing the existing products and services in new

regions/markets;

- Product development: Pushing up the sales by renovating or modifying the

existing products or services; As usual, research and development (R&D) costs are quite high

1.2.1.3 Expansion strategy

- Concentric diversification: Launching new products or services which are

related to each other;

- Horizontal diversification: Offering to existing customers new products or

services which are not related to each other;

- Conglomerate diversification: Launching new products or services which are

not related to each other;

1.2.1.4 Other strategies

- Joint Venture and/or Alliance: Being an independent company which is founded

from two or more sponsoring firms for the purpose of cooperation;

ally try to reduce operating costs, either by cutting "excess fat" and operating more efficiently or by reducing the size of operations;

- Divestment: Divestment involves selling off a part of the business, which can be

a SBU, a product line, or a division;

- Liquidation: Selling all assets separately at their tangible value;

- Simultaneous: Pursuing two or more strategies simultaneously;

1.2.2 Viewpoint of Michael Porter on typical strategies

According to Porter, specific strategies give the company competitive advantages from three different drivers:

- Targeting at the cost-price (low-cost strategy): Producing standardized products

at the low unit cost to serve price-sensitive customers;

- Differentiation: Producing typical products/ services of the industry to serve

customers who are insensitive to price;

- Focusing on key points: Producing products/ services that meet needs of a small

Market penetration and market development strategies drive many centralized advantages

1.3 THE STRATEGIC PLANNING PROCESS

According to Fred R.David, the strategic management process comprises three phases, namely strategy formulation, strategy implementation and strategy evaluation

Vision &

Mission

Statements

Adjust entrepreneur’

s business mission External Audit

Internal Audit

Long-Term Objectives

Generate, Evaluate, Select Strategies

Annual Objectives

Allocating resources

Management Issues

Measure and Evaluate Performance

Feedback

Formation Strategies Implement Strategies Evaluate

Strategies

Feedback

Source: Strategic Management and Business Policy, 11th Edition

Figures 1.1 Comprehensively strategic management model of Fred R.David

Strategy formulation is a process of setting business tasks and doing researches/

surveys in order to determine internal and external drawbacks, to define long-rum objectives and to pick out alternative strategies This phase is sometimes also known as "strategic planning" including three basic tasks such as doing research, intuitive integration and analysis, and decision-making

Strategy implementation (also called the action stage of the strategic management)

is to mobilize administrators and staffs to implement the given strategies Three basic activities of the strategy implementation are to set annual goals, to put forward

Strategy evaluation is the ending stage of the strategic management All strategies

depend on changes in the future because all internal and external factors change regularly Three main activities of this phase are to determine what elements are the base for the current strategy, to measure achievements and (3) to make adjustments

1.4.1 Macro-environment

The external environment comprises all external factors which cannot be controlled

by business managers but have great influence to the objective fulfillment, growth and profitability of each company The analysis of the external environment includes macro-environment and industry analysis The analysis of these factors helps enterprises to identify their market position, and environmental characteristics and the era at which they are present, to determine influences of the external environment on business, and thereby to make relevant decisions

Source: Strategic Management, Session 1- part 1

Macro-environmental changes possibly influence directly on any forces in the industry, which results in changes in relative strengths of these forces and in attractiveness of the industry The macro-environment consists of six factors, namely economic, socio-cultural, demographic, political, legal, technological and global elements

- Economic elements

Economic elements include the growth rate and stability of the economy, purchasing power, price stability, monetary, inflation, foreign exchange rate, etc These factors all affect business activities of enterprises

- The socio-cultural factors:

The social characteristics are also the concern of enterprises as they do market research These social factors will split the community into customer groups, each

of which has different characteristics, psychology and income; for example:

- Demographic factors

Including issues related to population, age structure, geographic distribution, ethnic communities and income distribution;

- Political and legal factors:

1.4.2 Analysis of industry environment (micro-environment)

According to Mr Michael Porter, five forces orienting the competition within the sector are (1) threats of new entrants, (2) rivalry among existing players, (3) bargaining power of buyers, (4) bargaining power of suppliers; (5) threat of substitute products/ or services

Source: Strategic Management, chapter 3(concept 03)

- Bargaining power of suppliers is expressed by:

- Bargaining power of buyers

Customers are categorized into two groups, namely end-users and distributors Both groups put pressure on enterprises (in terms of price, product quality and enclosed services); besides, they can impact on the competition in the industry with their purchasing decisions

- Competition pressure from new entrants

According to M-Porter, potential rivals are firms who currently have no presence in the market but may affect the industry in future

- Threats of substitute products

Substitute products and services are the ones having the same ability to satisfy customers’ needs as that of existing ones

- Rivalry among existing firms in the industry

Firms operating in the same sector will compete directly with each other, which in its turn put pressure on the industry and enhance competitive intensity In any sector, the following factors will increase the competitive pressure on rivals:

1.5 INTERNAL ENVIRONMENT ANALYSIS

In order to survive and develop, all organizations must conduct the following tasks: management and administration, finance, accounting, manufacturing, trading, professional executing, R&D, marketing, and building up an information system In each activity, each organization has its own strengths and weaknesses

Internal environment analysis is an important and indispensable part of the strategic management If the management team does not analyze the internal environment or cannot recognize strengths and weaknesses of the company exactly, they cannot set

1.7.1 Grand strategy matrix

According to Fred R David, the strategy formulation process includes three stages, namely input stage, matching stage and decision stage

Tables 1.1 Strategy formulation process

Phase 1: Input stage

External factors

evaluation matrix

(EFE)

Evaluation Matrix (IFE)

Phase 2: Matching stage

Matrix of Boston Consulting Group (BCG)

External matrix (IE)

Internal-Grand strategy matrix

Phase 3: Decision stage

Quantitative Strategic Planning Matrix (QSPM) From the current situation of CT-IN, we mainly focus on the EFE and IFE matrix in the input stage, SPACE and SWOT matrix in the matching stage to form strategies

of CT-IN, and QSPM matrix in the decision stage to pick out an appropriate strategy for CT-IN

1.7.2 Industry analysis: External factor evaluation matrix (EFE)

The EFE matrix helps strategy-planners to summarize and access the economic, social, cultural, demographic, geographic and political information, and the one about government, legal regulations, technology and competition

Tables 1.2 External factor evaluation matrix (EFE)

Main external factors Weight(*) Rating Weighted score

List of external factors

1.7.3 Industry analysis: Competitive Profile Matrix (CPM)

The CPM matrix helps the firm to identify competitors, as well as his/or her strengths and weaknesses, and to put forth an appropriate business strategy eventually

Tables 1.3 Competitive Profile Matrix

1.7.4 Industry analysis: Internal Factor Evaluation Matrix (IFE)

The IFE matrix summarizes and reviews key strengths and weaknesses affecting important functional departments and operation of enterprises

Assigning a rating to each variable to determine the total weighted score of the firm; the highest rating is 4, the lowest is 1, and the average is 2.5

Total weighted score of less than 2.5 indicates that internal factors of the firm; and vice versa

Tables 1.4 Internal Factor Evaluation Matrix (IFE)

1.7.5 SWOT matrix

The SWOT matrix is an important integrative tool to help develop 4 kinds of strategies as follows:

- Strength - Opportunity strategy (SO)

- Strength - Threat strategy (ST)

- Strength - Weakness strategy (SW)

- Weakness - Threat strategy (WT)

We have a SWOT matrix as follows:

Tables 1.5 SWOT matrix

1.7.6 The Strategic Position and Action Evaluation matrix (SPACE)

Steps to develop a SPACE matrix:

- Step 1: Choose a group of factors indicating financial strength (FS), competitive

advantages (CA), environmental stability (ES) and industry strength (IS)

- Step 2: Assign a numerical value (ranging from “+1” (worst) to “+6” (best)) to

each of variables that make up the FS and IS dimensions;

- Assign a numerical value (ranging from “-1” (best) to “-6” (worst)) to each of variables that make up the ES and CA dimensions;

- Step 3: Calculate the average score for FS, IS, ES and CA;

- Step 4: Plot the average scores for FS, IS, ES, CA on the appropriate axis of the

SPACE matrix;

- Step 5: Add two scores of IS and CA together, and then plot the resultant point

on X-axis; Add two scores of FS and ES together, and then plot the resultant point on Y-axis; Consequently, we have the coordinate (X, Y);

- Step 6: Draw a directional vector from origin of the SPACE matrix to the

coordinate (X, Y) This vector indicates kinds of strategies: aggressive, competitive, defensive or conservative

Strategies in quadrants:

Tables 1.6 Matrix of Strategic Position and Action Evaluation (SPACE)

AGGRESSIVE

quadrant

Company is in the best position

Market penetration, market development, product development, forward/ backward/

diversification, concentric diversification, horizontal diversification

Market penetration, market development,

Retrenchment, divestiture, liquidation, concentric diversification

COMPETITIVE

quadrant

Market penetration, market development,

horizontal integration, joint venture

FS

ES

ISCA

+4+3+2+100-1-2-3-4

+1 +2 +3 +4-4 -3 -2 -1

Aggressive Conservative

Competitive Defensive

Figures 1.4 SPACE matrix

1.7.7 Internal - External Factor Matrix (IE)

IE 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

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

1.7.8 Quantitative Strategic Planning Matrix (QSPM)

The QSPM matrix aims at evaluating and ranking the strategies so that we have the base to pick out the best strategy for the firm

This matrix uses all information and data from the above matrices (namely EFE, IFE, SWOT, and SPACE matrix) This is a tool to evaluate alternative strategies objectively; firstly, based on the pre-determined key internal and external success factors

Tables 1.7 Quantitative Strategic Planning Matrix (QSPM)

Key factors Rating

Usable strategies Strategy 1 Strategy 2 Strategy 3

CHAPTER 2 BUSINESS OPERATION OF JOINT STOCK

VNPT is the leading group in Post and Telecommunications

in Vietnam

With the contribution and achievements gained in the process of Socialism build-up and Homeland protection, VNPT was honorably awarded as “Hero of Labor in the 1999-2009 period” by the President on December 22, 2009

Experiencing 65 years of construction and development in the Telecommunications market of Vietnam, VNPT is the first service supplier who lays the development foundation of the Post and Telecommunications industry of Vietnam, and is the Group who plays a key role in turning Vietnam into one of the ten countries having the fastest growth of Telecommunications industry in the world

With more than 90 thousand employees, advanced telecommunications technology infrastructure and service network covering 64 provinces nationwide, VNPT prides itself on being the leading Post and Telecommunications service-provider (who serves more than 71 million mobile-subscribers, approximately 12 million fixed-telephone subscribers and dozens of millions internet-users) in Vietnam

In January 2006, VNPT officially became Vietnam Posts and Telecommunications Group (replacing the preceding Corporation model) pursuant to Decision No 06/2006/QD-TTg by the Prime Minister, with the strategy to develop upon a key economic corporation model of Vietnam and to operate in the conglomerate industry but core business still being Post – Telecommunications – IT

On 24 June 2010, Vietnam Post and Telecommunications Group were officially converted into a State owned One-member Limited Liability Company pursuant to Decision No 955/QD-TTg by the Prime Minister

2.1.2 Business scope – key products/services:

- Telecommunications and IT products and services;

- Communications products and services;

- Surveying, consulting, designing, constructing, installing, maintaining Telecommunications and ICT projects;

- Producing, importing and exporting, supplying telecommunications and ICT equipment;

- Financial - Credit - Banking services;

- Advertising services and event; and

- Real estate (offices for lease)

BOARD OF MANAGEMENT OF THE GROUP BOARD OF DIRECTORS OF THE GROUP

Focal (optical fiber and

accessories manufacturing Company

P&T Institute of technology

Mobile companies (VMS, Vinaphone)

Vietnam Data Company

(VDC) P&T hospitals I, II, III

P&T Consulting companies

VASC

Nursing &

Rehabillitaion Hospital I, II, III

Finacial service companies

60 municipal and provinicial telecoms

Telecommunications equipment manufacturing companies

P&T Construction and trading companies

Other companies

unication joint ventures

Telecomm-Vietnam Posts Corporation (member of VNPT Group)

100% VNPT-owened one

member limited 100% VNPT-owened Over 50%

VNPT-Under 50% VNPT-owened limited and joint stock

Joint Venture (Voluntary State-owned companies

2.2 INTRODUCTION OF CT-IN

2.2.1 Company history

Established pursuant to Decision No 537/QD-TCBD dated on July 11, 2001 by the General Post Office, Joint Stock Company for Telecom and Informatics (in short CT-IN) is currently a member of VNPT Group and engaged in Telecommunications – Informatics segment Its former was the Informatics Equipment Manufacturing - Science Enterprise No.1, established pursuant to Decision No 33/QD dated on January 13, 1972

- Company name: Công ty Cổ phần Viễn thông Tin học Bưu điện

- Int’l trade-name: Joint Stock Company for Telecom and Informatics (CT-IN)

- Head office: 158/2 Hong Mai Street, Hai Ba Trung District, Hanoi

- Telephone: (84 4) 3863 4597 - Fax: (84 4) 3863 0227

- Certificate of Business Registration: No.0103000678 issued by Hanoi Planning

and Investment Department on December 12, 2001

- Chartered capital (as of 31 July 2010): VND157 billion

- Number of employees: 607 people

Some achievements CT-IN has gained for recent years:

ISO 9001: 2000 Certificate; awarded gold medal at EXPO-2005 International Trade Fair; Prized as the most excellent Software Company in 2005 by the Ministry of Post and Telecommunications (currently renamed the Ministry of Information and Communications – or called MIC); Awarded Sao Khue prize in the ICT field in 2007; Prized as the most excellent Software Company in 2008; ranked in Top 4 of the largest Telecommunications and IT private enterprises pursuant to the list of VNR500 in 2008

Specifically, CT-IN was officially certificated as Partner Silver by Cisco System

2.2.2 Functions and missions of CT-IN

Core business of the Company is to manufacture and trade Post - Telecommunications – Informatics equipment and consultancy services In particular:

2.2.2.1 Providing Telecommunications and IT equipments

- Trading (exporting and importing) Telecommunications and IT equipment (including microwave transmission, multi-service access equipment, multi-media services, terminal server, network devices (i.e routers, switches, firewalls, etc ), Data Center, Contact center and others equipments serving mobile information network, WiMAX, NGN, etc…

- Trading (importing and exporting) software products (i.e including operating system, application software, Billing Customer Care System (BCCS), etc…);

2.2.2.2 Manufacturing equipments for Telecommunications and IT network, and application software

- Manufacturing telecommunications network and auxiliary equipment such as warning device, antenna bracket, cable bridge rack, etc…

- Manufacturing application software in the fields of exploitation and management of value added services in Telecommunications network and internet; and

- Insourcing and exporting application software;

2.2.2.3 Leasing Telecommunications–Informatics infrastructure and equipments

- Leasing workstation to mobile network operators;

- Operating lease of Telecommunications and IT equipments such as microwave and optical transmission, multi-service access equipment, Data Center, etc…

2.2.2.4 Providing Telecommunications and IT service

- Installing partially turnkey projects of Telecommunications and IT (i.e installation of microwave and optical transmission, switchboard, access, mobile network devices (BTS, MSC, BSC), network devices (i.e routers, switches, etc…) ;

- Maintenance of Telecommunications equipment (such as microwave and optical transmission, switchboard, multi-service access equipment, DSLAM, BRAS, Server…);

- Monitoring and controlling the quality of Telecommunications and IT network;

- Labour export pursuant on each project;

- Fixing Telecommunications and IT equipments;

2.2.2.5 Telecommunications – computing related consultancy service

- Project planning, design, and consultancy of the Telecommunications and IT network;

- System integration;

2.2.2.6 Managed services

- Installing services, updating and troubleshooting;

- Monitoring and maintenance of on-site or remote systems;

- Having service quality agreements for each level of service with each customer;

- Periodical subscription (charge per port, per user, per month);

2.2.3 Organizational structure of CT-IN

MEETING OF SHAREHOLDERS

Management Board

General Director

Deputy General Director

Sales Unit

Telecom & IT Unit Finance Unit

NGN Technology Center (Cnext)

Mobile Network Integration Center (Cmobile)

Project Development Unit

Design &

Commissioning Unit

Telecoms Technology Center (Ctelecom)

Maintenance &

Emergency Support Unit

Project Development Unit

Informatics Center

Software Unit (Csoft)

System Integration Unit (Cis)

Electronics &

Mechanics Center

Electronics Assembling Unit Mechanics Workshop

Da Nang Branch Office

Sales Unit

Telecom & IT Unit

Finance Unit

Can Tho Branch Office Administration Unit Administration Unit

2.2.4 Existing customer base and partners

In development process, CT-In has established and kept steady relationships with a great number of customers and local and foreign partners

- Customers: VNPT Group, Mobile Telecommunications Company

(VMS-Mobifone), Vinaphone, Viettel, Interprovincial Telecommunications Company (also called Vietnam Telecom National - VTN), Vietnam Data Communications Company (VDC), Vietnammobile, Central Post Office, etc… Among customers, VNPT is one of the major and traditional customers of CT-IN

- Partners: Alcatel-Lucent, Motorola, Ericsson, Cisco, Huawai, Rosenberger,

IBM, HP, SUN, OPNET, NEC, ADTRAN, NORTEL, MICROSOFT, Amdocs, NOKIA-SIEMENS, etc…

2.2.5 Business performance of CT-IN within 3 recent years (2008 to 2010)

Unit: VND (Source: CT-IN)

Absolute comparison Relative comparison 2008-2009 2008-2010 2009-2010 2008-2009 2008-2010 2009-2010

2 Provisions for devaluation of stock value (3,329,475,014) (7,704,767,237) (4,375,292,223) 88.56% 204.94% 61.72%

IV Other short-term assets (15,023,732,715) (27,903,900,389) (12,880,167,674) -47.83% -88.84% -78.62%

2 Other long-term investments 9,191,000,000 9,191,000,000 0 0.00%

III Other long-term investments 380,495,859 (2,705,473,988) (3,085,969,847) 10.04% -71.36% -73.97%

II Long-term liabilities 96,598,587,749 47,640,804,484 (48,957,783,265) 10904.65% 5377.99% -50.22%

Changes in total assets

- In general, total assets of CT-IN increased during last three years Especially, the year 2009 witnessed a robust asset growth of 34.09% in comparison with 2008 figure, driven by a boom of 170% in account receivables

- Inventories plunged by 66.05% in 2010 against in 2008, attributable to rising provisions for devaluation of stock value and the fact that the Company paid back a portion of inventories to VNPT Group

- Fixed assets approximately doubled (around 214.63%) in 2010 against in 2009 because the Company made a property investments of VND85 billion for setting branch office in Ho Chi Minh City

- Meanwhile, its long-term financial investments has declined strongly by around 76.77% since 2009, driven the Company’s capital withdrawal from some associated companies from

- Finally, there was a plunge in other assets in 2010 due to a half in deferred corporate income tax (CIT)

Changes in total resources

- Compared to the 2008 figure, total capital resources rocketed in 2009, driven by:

(approximately a rise of 16.02%) due to rising bank loans to finance the project

of supplying MAN Ethernet service package to 17 provinces That means CT-IN used capital efficiently

- Retained profits surged by VND52.2 billion, approximately fourfold against the result of 2008

- Equity also went up for two years (2008-2010); accordingly, the year 2010 witnessed a stronger growth than in 2009