PROPOSAL ON DEVEPMENT STRATEGY FOR VMS mobifone 3g service

Concepts of strategy: Majority of world enterprises currently consider strategy development theirtop duty, especially in today’s severely competitive business environment.. The formation

Thesis topic PROPOSAL ON DEVEPMENT

STRATEGY FOR VMS MOBIFONE’S 3G SERVICE

COMMITMENT

We certify that the report is our group’s studies Figure and results in the report are

of credibility and from reliable sources

We also state that all analysis in the report is ours basing on references and learnedknowledge The analysis is not private statement of any one of the group as a staffmember in the organization where he or she works

Hanoi, January 2011

ACKNOWLEDGEMENTS

Our first sincere thanks will be extended to the University of Griggs in Vietnam,whose instruction is valuable to our report Besides, we would like to thankVietnam Mobile Telecom Services Company VMS-MobiFone for their whole-hearted support in provision of data, figures and days of working which help ushave a realistic look in the formation of the company’s strategy Last but not least,our thanks also go to the professors and doctors for their help, lectures on skills andbusiness administration knowledge during the course

Authors

TABLE OF CONTENTS

LIST OF FIGURES

LIST OF TABLES

LIST OF ABBREVIATIONS

3G Third generation technology-3G

BTS Base Transceiver Station

BSC Base Station Subsystem

CDMA Code Division Multiple Access

EDGE Enhanced Data Rates for GSM Evolution

GPRS General packet radio service

GSM Global System for Mobile Communications

MMS Multimedia message service

TDMA Time division multiple access

VMS Vietnam Mobile Telecom Services Company

VNPT Vietnam post and telecommunication

WiFi Wireless Fidelity

INTRODUCTION

1 Reason for subject selection.

In recent years, mobile information market has been flourishing There arenow seven mobile information service providers in operation; some others aretaking application procedures for market entrance like Indochina Mobile, VTCTelecom However, the market is getting to saturated point Competition isbecoming fierce; Growth of revenue, profit is weak, which urges companies to havenew strategies for development In this scene, 3G service (a set of internationaltelecommunication standards and technologies promoting mobile phone quality andefficiency) turns out to be a better solution for companies in attracting morecustomers

The Mobile Information Company (hereinafter called VMS) is the firstmobile information provider in Vietnam under the trademark “MobiFone” Since itsfully operating day, the company’s first ranking in terms of sales, competitivecompetence and experience in network operation and exploitation in Vietnam hasbeen recognized and will be maintained in the future

VMS is a 100% State capital enterprise under the Vietnam Posts andTelecommunications Corporation (VNPT) MobiFone network has covered 62cities and provinces and 86.64 percent of Vietnam’s population VMS is the firstand only mobile information service provider in Vietnam which was awarded withthe prize “Information Network of the Year” by Echip Mobile Magazine in threesuccessive years (2005-2007) In 2007, the company was ranked in the Top 20 ofthe 200 Vietnamese biggest enterprises by the UNDP United Nations

Being the leading mobile information service provider, VMS providesvarious mobile information services and products, including voice and dataservices In the financial year of 2010, its turnover was VND 36,000 billion Withthe number of 3,525 competent and experienced officers and workers, the company

is always ready to satisfy demands of more than 35 million customers nationwide

With desire to put the learned knowledge into practice in the companieswhere the authors are working, the Capstone Project Report “Development ofBusiness Strategy for VMS-MobiFone’s 3-G service” was chosen for the study

2 Objectives of the study.

- To re-systemize theories of strategic management, then on that basisrecognizing and solving problems in order to build an effective and suitable strategyfor product/service development

- To apply system of theoretical and practical basics for analyzing and evaluatinginternal, external environments in order to build 3G business strategy for VMS-MobiFone

- To recommend solutions, suggestions in order to complete VMS-MobiFone’sselected business strategy

3 Scope of the study.

Due to time and resource limitations, our group only had deep research inanalyzing and building 3G business strategy (one of VMS’s business fields) for VMSduring 2011-2016, the key period for the company’s 3G service expansion anddevelopment

4 Methods of the study.

To solve the above issues, the report mostly uses the qualitative analysis method(analyzing facts of the VMS-MobiFone Company) The specific methods of datacollecting such as questionnaire, expert interview have been used National statistics,professional information and data, secondary data on strategy and researches, reportspreviously done by the VMS-MobiFone company have been also utilized

5 Lay-out of the subject.

The subject is divided into 3 chapters with the main contents as follows:

Chapter I: Theoretical basis

Chapter II: Study of VMS-MobiFone’s 3G service strategy management issues

CHAPTER 1: THEORETICAL BASIS

Building a business strategy is a top-ranking task of enterprises In order tomake it viable and developmental in the currently changing and competitiveenvironment, each enterprise has to be active and creative in building suitablebusiness strategies

There are different ways of approach and analysis to build and select abusiness strategy in accordance with the enterprise’ specific characteristics

1.1 Main issues on strategy and business strategy

1.1.1 Concepts of strategy:

Majority of world enterprises currently consider strategy development theirtop duty, especially in today’s severely competitive business environment Tosurvive and develop, each enterprise should be dynamic and creative to set up itsown suitable business strategy Methods and approaches are available to set up andselect business strategy in accordance with the enterprise The following is theintroduction of theoretical method of developing and selecting business strategy for

a product or service, the process and experience in strategy development in theworld

The term “strategy” originated from the art of warfare in old times It isconsidered as the art of commanding means to win or reach one’s aims Carl vonClausewitz, a 19th-century strategy researcher, said” Strategy is to making plan forwarfare and plan strategic campaigns which determine the participation of eachsoldier” Edward Mead Earle, a historian described: “Strategy is the art ofcontrolling and using a nation’s resources to ensure and increase the effectiveness

of one’s essential rights”

The term of strategy is now used popularly and is regarded as the growingfor companies’ business activities The concepts of strategy are of variety, such as,

“strategy is modules of goals, purposes and plans to reach them” (Kenneth, 1965),

or “strategy is the striking thread through out a company or organization’s activity”(Ansoff, 1965) Kenneth Andrew is the first to point out out-standing ideology in

the book “The Concept of Corporrate Strategy” In his view, strategy is what a

company has to perform basing on its strengths and weaknesses in the scene of bothopportunities and challenges

The formation of concepts and viewpoints has undergone the process ofgeneralization of approaches, such as:

- Classic view supposes that it is possible to plan long term competitiveadvantages;

- Evolution view sees a company as a living thing which will struggle and adjust

to adapt to and survive competitive environments;

- Process view stresses that the survival and development of a company is aprocess of experience accumulation, struggle by all means to reach the goals,and a strategy is needed to carry out the process;

- Systematic view state that a company’s business activity must be donesystematically to reach a long-term success

The struggle and exchanges among those views gradually create newcommon views on strategy No matter how it is approached, a company’s businessstrategy is characterized by 3 commonest features:

- Setting up an overall action plans towards the future in terms of the company’slong-term business aims

- Company owner will decide important policies and methods;

- Setting up the steps, patterns and allocation of sources to carry out thecompany’s goals

1.1.2 Business strategy and selection of business strategy

Business strategy concepts

The above analysis of concepts and views leads to the concept of businessstrategy that orientates targeted business activities in a long time together with asystem of policies, measures and resources allocation to reach the company’s

A company’s business strategy is a general action programmer towardsreaching its goals It is not aimed at working out a specific way to achieve as it isthe duty of other supportive programmers and functioning strategies It is businessstrategy to create the frameworks for thought of business direction and action

According to a generalization, business strategy might be categorized into 3groups:

- Group 1: business strategy is an art to create business advantages;

- Group 2: business strategy is the special form of planning “business strategy,the way, the means to reach the goals” or “to identify long term goals”

- Group 3: business is both an art and a programmer to implement long termstrategic goals; it is the combination of policy, programmer, project and plan.From the above viewpoints, it is clear that business strategy is characterized bytarget orientation, long term, advancing ideology which is realized as a systematicestimation process

Features of business strategy

Although there are many different opinions and approaches on the term ofstrategy, main features of business strategy are concerted unanimously The featuresare:

Objectiveness : business strategies often determine the fundamental goals, the

business orientation of each enterprise in each period and policies to implement theobjectives set out

Appropriateness : this requires the company when building business strategy, to

evaluate precisely facts of its business performances In the mean time, it has toregularly revise and adjust to fit to environmental changes

Orientation, long-run : business strategy is built for long period (5 years) Therefore,

business strategy has character of route and is concretized by strategies with shorterterm, so called plan

Flexibility, elasticity : business strategy is built on the basic of future market

forecast, thus, strategy should be flexible, elastic upon market fluctuations

Continuousness: Business strategy is a continuous process from building,

implementation organization, checking, supervising to strategy adjustment

Competitiveness : Business strategy, nowadays, cannot be separated from

competition because business strategy partially ensures the company’s capability tocompete on the market

Classification of business strategy

Classification of business strategy comes into different types, creating thediversification of ways to carry out business strategy With strategic levelclassification, we have company level strategy, business level strategy, andfunctions level strategy To classify basing on the content of the strategy, Frenchmanagers state that the business strategy consists of commerce, technology, financeand human strategy And classification upon strategic process gives out orientationand action strategy

1.1.3 Role of business strategy

Business strategy has more and more become the tool help company orientateand develop after goals put forwards and in accordance with business environment.Proper business strategy will create a good way for the company Business strategycan be deemed to be guideline for the company heading on the right direction.Business strategy brings back many profits for the company Its importance isproved as in the following aspects: Firstly, it helps the company orientate itsactivities in the future through business environment analysis and forecasts;

Secondly it helps the company hold opportunities as well as challenges todevelopment of the company’s resources It helps the company exploit and useproperly all resources, prove the company’s strengths

Thirdly, business strategy creates an operation orbit for the company, helps thecompany unite personals with different benefits heading to a common target, todevelop the company

Fourthly, through comprehensive analysis of factors of macro-environment,micro-environment, it helps the company identify its competitors, then to launch anoverall solution to raise the company’s competitiveness

1.2 Process to develop strategy

To develop a strategy requires strategic thought and answers to 3 questions:

“Where are we now? Where are we going to? And how can we get there?” through

7 steps

1 Evaluation of the current task: task, goal, strategy

2 Analysis of business environment: market structure, development,

analysis of competition and company position

3 Macro-environment analysis: demographic, socio-economic,

financial, technological

4 Internal company analysis: structure, resources, procedures, labor

force and culture

5 Analysis of strengths, weakness, opportunity and threat (SWOT)

6 Analysis of strategy selection: in general or in particular

7 Evaluation and implementation: demand of labor force, risks and

benefit

Where are wenow?

Where are wegoing to?

How can we getthere?

It is obvious that the identification of business strategy relates to customers’needs, groups of customers or who will be satisfied and possibility of needs beingmet These decisions are the focus of company-level strategy selection as they formthe root of competitive advantages against the competitors

Strategic administration consists of: the analysis of external environment to

identify opportunities and threat, of internal environment to identify the strengthsand weaknesses Working out and selecting proper strategy basing on task, vision,strength, weakness, opportunity and weakness The implementation and evaluation

of strategy should be done so as to make the company’s organization suitable to thestrategy Strategic administration steps are illustrated in the followings:

Internal environment analysis

ooportunity Threat

Develop and select (SWOT)

Chosen strategy

Lead in low costProduct differentiationconcentration

TASK and VISION

Implement and revise strategy Supervise and review implementation of strategy

Make organizations

Suitble to strategy

Figure 1-1: Process to develop strategy

Source: Materials on strategic administration – Griggs

1.2.1 Strategic task and vision

Task is a concept used to refer to the highest goal, significance of the

appearance and survival of a company It is also the testimony to the company’s

usefulness to society The term is equivalent to others, namely, motto A company’s

task is valid throughout the company’s operation time if not revised However, it

will be made specific to suit strategic phase in form of strategic goals

Vision is understood as a statement on the company’s desirable status This

statement will draft the company’s future in its goals and aims The statements

might be of different length, e.g a short utterance or a long paragraph, but it has to

(1) the time it targets at, (2) scale and status in business circle and society; (3)setting up the vision towards ensuring the highest quality and lowest price product,(4) the company should pay attention to customers’ benefit

1.2.2 Strategic goals

Strategic goals are milestones or moods that the company want to reach instrategic periods Thus, the identification is really significant to the company as:

- Strategic goal is the means for the company to fulfill its tasks

- Strategic goal is the foundation for setting up priorities when allocatingresources

- Strategic goal is the ground for the development of strategy, policy and businessplans

- Strategic goal is the base for gathering and orientating relating entities, likecustomers, shareholders and staff

It can be seen that a company’s business strategy is shaped on the balancebetween 3 factors, strategic goals, business environment, and the company’scapacity

However, it does not mean that the company’s strategic goals, when setting up,can be as high as expected but restricted to the company’s circumstance andcapacity in general The goals should be proper and feasible To that end, theidentification of a company’s goals should be based on:

- the company’s business task in general and in specific periods

- business philosophy

- Overall understanding of business environment and company’s capacity

1.2.3 Analysis of external environment

The analysis of external environment is aimed at working out opportunitiesand threat to the company so as to implement and fully grasp the opportunities fromexternal environment as well as avoid threats The scope of the analysis is macro-

environment (or general environment) and micro-environment (or industryenvironment)

1.2.3.1 Analysis of macro environment

The company’s objective environment includes 6 partitions: economy,politics and legislation, socio-culture, demography, technology and globalization.Changes in macro environment can affect directly to any forces in the industry.Thus, it change relative strength to other forces and itself, and finally, it changes theattractiveness of an industry

The company must realize opportunities, threats brought by objectiveenvironment which the company has to get used to and also press for environmentchanges Factors of macro environment are shown by following model:

Figure 1-2: External environment

Source: Materials on strategic administration – Griggs

- Analysis of demographic environment

Population scale: observation of demographic change on population would raise the

importance of this partition Forecast of population will reveal global challengesabout population of 21st century and opportunities for businessman

Age structure: It reveals opportunities of old people care services, insurance

services However, it also hides a challenge to companies about labor resource

Geographic allocation: this can create advantage for telecommunication

technology By computer, human can stay at home and communicate with theothers via telecommunication

- Analysis of politics and legal environment

Politics, legislation environment includes: political regime, government institution,regime of political party, organizations, legislation system Factors of politics,legislation impact on the company’s development strategy in different ways Theymay be opportunities for one company, but also threats to the others Open policyencourages many economic elements to take part in production and businessactivities This is the threat for state owned enterprises but an opportunity forprivate companies joining the market

Impact of politics and legislation environment to the company’ business activitiesare deep and wide, and even decisive Generally, if a country is stable in politics,clear and consistent policies, strict legislation, its companies can develop healthilyand stably

- Analysis of economic environment

Economic environment is socio-economic situation and economic policy in thecountry where the company exists and develops Economic environment includes:socio-economic structure, level of economic development and macroeconomicpolicy

- Analysis of techniques and science environment:

Techniques and sciences environment: it is the factor of techniques and science and

a collection of social phenomena directly related to techniques and science at place

where the company exists and develops; government’s scientific institution; policy

of techniques and science and legal documents on techniques and science

- Analysis of socio-culture environment:

Social environment: it includes foundation and fluctuation of society classes,

population structure, population immigration, social power structure, people workand live custom Facts and fluctuation of these factors can affect the company’sbusiness

Cultural environment: it includes factors of philosophy, religion, language,

literature, art Impacts of these factors to the company’s business are mostly indirectbut cannot be underestimated

- Global environment:

Global environment includes related global markets, present changing markets,significant political issues, and basic institutional and cultural characteristics inglobal markets Macro analysis enables the company to evaluate macro-economicfactors affecting the company’s operation and changes in competitive environment

It can be illustrated as the followings:

Table 1-1: Analysis of macro environment Demographic

segment

Population scaleAge structureGeographical allocation

Race diversityIncome distribution

Economic segment Inflation rate

InterestTrade surplus or deficitBudget surplus or deficit

Rate of personal savingsRate of enterprise savingsGDP

Political and legal

segment

Laws on anti-monopolyLaws on tax

decentralization

Laws on trainingPolicies and educational trends

Environment concernsChanges in job selectionChanges relating to priority ofproducts and service

Technological

segment

Product innovationKnowledge application

Government’s spending o R&D

telecommunication

Global segment Major political events

Key global markets

Newly industrialized countries.Cultural and institutionaldifferences

(Source: textbook on strategic administration- 2007)

1.2.3.2 Analysis of micro environment (model of 5 competitors)

Industry is divided by characteristics of the product or service and its role inthe national economy In any industry, a company is always under 5-sidedcompetitive pressure, such as, the pressure from newly-participated company, fromthose in the industry, from the alternative products, the impact of supplier andcustomer Michael Porter’s 5-force model is a big help to strategists analyze theseforces’ competition as the following chart

Threat from potential competitor competitors

Providers’ bargain ability

Threat from alternative products

Buyer’s bargain ability

Competition from industry competitors

Figure 1-3: Model of Michael Porter’s 5 forces

Source: Lectures on strategic administration – Griggs The threat from a potential competitor:

The newly participated company is a newly founded one or the one withmany kinds of products The fact that there are many or few Potential Entrants, theirpressure to industry is strong or weak depends on attracting factors of the industry.These factors are showed by profit ratio, customer number, number of companies inthe industry

The threat from alternative product

Alternative products are those of the same usage If they are of greater

advantages, they will pose bigger competitive pressure If its producers quicklydevelop the production, the industry will be vigorously threatened

Buyer or customer’s bargaining capacity

A company’s customer can be a direct customer who might puts more pressure

on the company when demanding higher quality or lower price products However,

he or she can be a distributor or an agent The matter is who is the real customerwith bargaining capacity that the company should pay attention to; those specializedproducts serving the society, like the construction of a bridge or road, then customer

is the investors who demand high standards that the company has to satisfy,therefore, the company must be able to meet in the competition or bidding process

- Threat from industry competitors

The competition from existing companies in the same industry is exposedthrough the patterns and features The competition is related to the industry’characteristics, the scale, the number of companies and the market structure

- Threat from suppliers’ bargaining capacity

The suppliers of raw materials are able to raise the price or lower the quality orboth raise the price and lower the quality Companies are concerned much for theability to negotiate with the suppliers to fix the problems while achieving what theywant, such as, quality, price, ability to supply

In summary, the analysis of business environment which consists of macro and

micro-one is crucial to a company It is aimed at identifying opportunities andthreats to produce suitable administration These 5 factors always impact thecompany so the company is required to accumulate data regularly Some corecontents are drawn from these as the followings:

1 If the company meets the environment’s demands, its strategy will be moreeffective

2 The company’s recession is largely attributed to environment, not to internalfactors

3 Once dependant on environment, the company should focus on the analysisand estimation

4 Good analysis and estimation are needed if the environment is unstable andchangeable

5 A good strategist always knows well eternal and external environment

1.2.4 Analysis of the company’s internal environment:

The aim of internal environment analysis is to have a general andcomprehensive view beside the recognition of potential resources as well as existingones making sustainable competition advantage for the company Realize strengthsand weaknesses of the company creating foundation for planning and implementingbusiness strategy Objectives under consideration are primary factors inbound thecompany, within its control and include: human resource, finance, accounting,marketing, communication system, organization system

1.2.4.1 Value String

A company’s value created is measured by the mount paid by the buyer tothe product To have competitive advantages, the company’s functional departmentshave to produce a low-cost product or a distinguishable one In other words, thecompany has to pursue a low-cost or distinguishable product strategy

Michael E Porter introduced the term “value string”, divided into mainperformance and supporting performance, to analyze the process to create value,and add more value to the product Value String offers us an overall picture of acompany’s performance, the competitive strengths in a company’s strategy Theclassification of performances in Value String facilitate the checking of cost andresults of each activity, innovating and coordinating them as the way to createvalue for each product as well as the whole company Supporting performances arelisted as the followings:

Figure 1-4 Value chain Mode

Technology development: including required activities to improve product

value and process used to manufacture products The term of technology is thought

in broad sense including both production and management technology, having closejunction with each other making common value for the company Technologydevelopment includes also research and development (R&D) This is an importantactivity contributing to creation of new value for product and to value chain ofproduct or the company Besides R&D, production technology level also plays avery important role For many fields, development level of production technology isdecisive greatly to final value of value chain

Personnel management: including activities related to employee

recruitment, hiring, training, development and payment Personnel management is

an important activity appeared in all chains of value creation process Facts showthat any company, who really cares to invest for human development andmanagement, will make the differentiation on the market and take long termcompetition advantage

Company infrastructure: including general management activities, planning,

financing, accounting, legislation supports, relation with government agencies tosupport whole value chain

Like basic activities, support activities are considered in correlation withcapabilities of opponents Therefore, each company has to judge if each of itsactivity is superior, equal or lower These goals can be seen as the junction ofdifferent departments to create values in a company

1.2.4.2 Company’s sustainable competitive advantages

A company’s sustainable competitive advantages are characterized by 4features:

- Valuable and able to help the company creates value, lowers the cost andraise business effectiveness

- Original and able to combine with other sources originally

- Inherent and productive, the result of units’ interaction to develop thecompany’s basic capacity

- Formed through the company’s experience accumulation, not imitation

In terms of short-time view point, a company’s sustainable competitiveadvantages are low price, high quality, and good after sales service However, interms of long-time view point, creativity is more important than current advantageswhich will disappear with time due to changes of technology or market Acompany’s sustainable competitive advantages are strengths associated with itsorganization Four factors will constitute the company’s sustainable competitiveadvantages:

- Staff members’ knowledge and skills

- Company’s technology system, that is, the needed one to carry out itsbusiness strategy

- Company’s administration system, all the strengths formed throughregimes, or stipulations, the leaders’ art of management

- Company’s awareness of its culture and value system, an importantconstituency of the company

The analysis of company’s sustainable competitive advantages is to settle 3issues:

- What is company’s sustainable competitive advantage, how it is at present? Todeal with this, the intensive analysis of the company’s resources, system oftechnology and culture administration

- The benefit of competitive advantages towards the company’s competitivestrengths? Generally, the more original competitive advantage is, the stable andlong-lasting competitive strengths are

1.2.5 Synthetic Matrix of SWOT

1.2.5.1 Theoretical base of matrix

While PEST is the tool to analyze external factors, SWOT analysis focus oninternal changes relating to external ones SWOT is the group of the abbreviations

in English: Strength, Weakness, Opportunity, and Threat The SWOT analysismodel resulted from the survey of 500 highest revenue companies by the Fortuneand Stanford Research Institute in the 1960s-1970s to work out the reason for somecompanies’ failure in implementing their plans The researchers were MarionDosher, Ts Otis Benepe, Albert Humphrey, Robert Stewart and Birger Lie

This is a useful tool to explore or make decisions on organization,management and business as well In other words, SWOT is the theoretical framework for us to review, identify a company’s status and direction SWOT analysis isthe key to developing strategies, clarifying a company’s internal strengths,weaknesses, external opportunities and threats

1.2.5.2 Matrix of SWOT

Matrix of SWOT is used to synthesize analysis of a company’s external andinternal environment The analysis of external environment work out opportunitiesand threats while that of internal environment to identify strengths and weaknesses

of the company

On the basis of analysis of factors in the matrix, goals, business developmentorientation and resources, the company is able to set up combinations In principle,there are 4 types of combination:

Opportunity with strengths (OS);

Opportunity with weaknesses (OW);

Threat to strengths (TS);

Threat to weaknesses (TS)

A company is not necessary to pursue the best opportunities but creating thepossibility to develop competitive advantages instead by exploring its suitabilitybetween the strengths and the coming opportunities

To develop strategy basing on SWOT analysis, SWOT matrix is needed to beset up as the following;

Table 1-2: Matrix of SWOT

• Strategy S-O to pursue opportunities suiting company’s strengths

• Strategy W-O to fix weaknesses in order to pursue and grasp opportunities

• Strategy S-T to identify approaches that company can employ its strengths toreduce loss by external threats

E Porter’s model to analyze industry environment, model of Value String toanalyze internal environment At the same time, model of SWOT and GREAT isalso introduced to develop and select business strategy.

Chapter 1 focuses on the analysis of external and internal environment, steps

to set up business strategy, which will be the basis for business strategydevelopment

In the next part, the report will analyze and evaluate current businesssituation, core matters, strengths, weaknesses, opportunities and threats, makinggood ground for developing and selecting MobileFone’s 3-G service businessstrategy in the period of 2011-2016 and 2020 vision

CHAPTER 2: AN ANALYSIS OF THE DEVELOPMENT STRATEGY FOR

THE 3G SERVICE OF VMS-MOBILE 2.1 OVERVIEW OF VMS-MOBIFONE COMPANY

2.1.1 Establishment and development process

Mobile Telecommunication Company (hereinafter referred as VMS) is thefirst provider of mobile communication services in Vietnam with the trademark-MobiFone From the first days of service delivery, VMS has confirmed the leadingposition in business, competitive advantages, and network operation experience inVietnam VMS will keep this position in the future as well

VMS is a 100% state owned enterprise, a member of Vietnam Posts andTelecommunications Group (VNPT) MobiFone covered all of 64 provinces(provinces counted in 2006) and 86.64% of the total population in Vietnam.Mobifone is the first and only mobile information provider in Vietnam granted theaward “The best mobile network of the year” in 3 consecutive years from 2005 to

2007 by consumers through Echip Mobile magazine Particularly in 2007 VMS wasranked in the top 20 of 200 largest enterprises in Vietnam by UNDP of UnitedNations

VMS provides various services such as call service and database In thefiscal year 2010, the total revenues reached 36.000 billion VND With 3.525qualified and experienced staff, the company is always ready and willing to servemore than 30 million customers in the nationwide by the end of 2010

The experience of VMS in the mobile service provider market offers a lot ofadvantages, for instance:

 Understanding the market

 Well-known brand

 International standard service and products

 Telecom management experience

 Modern infrastructure

 Social responsibility

 Human resource management with the focus on human being

2.1.2 Fields of production and business

* Full name: Mobile information Company

* Abbreviated name: VMS

* Name in English: Vietnam Mobifone Service

* Slogan: Everywhere, every time

* Trade mark: MobiFone

* Head office: Urban zone of Dich Vong – Cau Giay - Hanoi

* Website: www.mobifone.com.vn

VMS Company’s main economic functions activities and business:

- Organizing, building, managing, operating, and exploiting the network of VMSmobile information in provinces and cities all over the country

- Consulting, surveying, designing, building and maintaining mobile informationequipment

- Importing and exporting telecommunication materials and equipment for’ssubsidiaries’ operation

- Doing business in other fields within VNPT’s permission and under Vietnam’sLaws

2.1.3 VMS- Mobifone’s organization structure

Presently, VMS has 14 functioning departments and 9 subsidiaries, including 6mobile information centers in 6 regions, Value-added Service center (VAS),subscription and liquidation center and a design factory

VMS’s Organization map

Department of administration Department of IT

Department of bidding review

Department of planning and sales

Department of finance, accounting

Department of customer care Deputy general directors

Department of payment supervision Department of technology, exploitation administration

Department of subscription fee and marketing

Department of import General director

Department of technology and network development

Department of subscription fee payment Project management board

Department of construction and investment management

Centre for mobile information region I Centre for mobile information region II Centre for mobile information region III Centre for mobile information region IV Centre for mobile information region V Centre for added value service Centre for subscription fee calculation and equity Design factory

Figure 2.1: VMS’s Organization map

Source: Website mobifone.com.vn

o Internet Access: Mobile Internet, Mobile Broadband

o Other services: Super SIM 64K, Super SIM 128

Customers are supplied the following main products:

Figure 2.2: Products and services for customer segments

- Directors, managers, and engineers

- Heads of private enterprises

- Calling much, charge per minute is low

- Customers with high income

MOBICARD - Customers using averagely

- Customers needing simple and convenient register

- Free when falling in line

- Easy register

MOBI4U - Customers using not regularly

- Customers caring much of cost

- Daily charge

- Cheaper charge of calls

- Young people and students but higher charge for calls

MOBI365 - Customers with low income in

Table 2-1: Number of subscribers and market share

of terminator equipment as well as poor infrastructure

(Source: Report on Business Result of VMS 2005-2010)

2.2 VMS Mobifone’s development strategy in 2011-2016 and vision 2020

2.2.1 The Company’s task and vision

Vision : To become a strong and reliable partner to relating ones in the field of

Telecommunication in Vietnam and in the world

Task : - Every advanced technology will be applied for customer’s need.

- Creativity all the time to bring added value to customers

- Transparently sharing of information

- Place for credibility for staff, customers, share holders and community

• Company culture norms:

- High quality service

- Courteousness and joy

- Co-cooperativeness and transparency

- Rapidness and accuracy

- Creativity and whole heartedness

2.2.2 Strategic goals to 2015 and 2020

With above task and vision, the company’s strategic goals till 2020 are:

• Combine 2G and 3G service to increase the market dominance and decrease

• Perfect the modern management system after international criteria.

• Format and develop Mobifone’s business culture in accordance with newbusiness conditions

value-Market share 30%

Exploit 70% 3Gvalue-addedservice Marketshare 25%

Exploit 95%3G,4G value-added servicemarket share35%

MobiFone’sfinance company

Finance companylisted

- re-structure afterequalization

- Distinguishablevalue format

- Operation afternorms

- taking over

- new image of amodern companywith

distinguishablevalue

- become aninternationalstandardcompany

MobiFone corporation

2.3 VMS Mobifone’s business strategy for 3G service in 2011-2016

2.3.1 Overview of VMS’s 3G Service product

2.3.1.1 Mobifone 3G

Mobifone 3G is the third terrestrial mobile information network of IMT –

2000 norm using 2.100 MHz ban officially exploited by Mobifone since December

15, 2009 under the license 1118/GD BTTTT granted by Ministry ofTelecommunication and Information on November 8, 2009

This service provides customers broadband ensuring transmission, coding,data processing speed

Mobifone‘s 3G network enable subscribers to access to basic services, such

as, voice call, video – voice calls, short SMS message, high quality MMS, access tointernet with maximum speed of 7.2 Mb per second, which is the foundation fordrastic development of content services on internet band, such as, mobile TV,mobile game….etc

Mobifone’s 3G network is fully connected and integrated in to Mobifone’scurrent network (technology of GSM 900/1800Mhz), enabling to provide serviceafter 3G standard to its post-paid and prepaid subscribers Hand-over technologyallows Mobifone subscribers to maintain connection when moving between 2G and3G network coverage

Mobifone’s 3G service quality is highlighted by well- handling thetransformation from 2G to 3G network Till the inauguration day (December 15th),Mobifone subscriber’s connection is kept in good condition when moving between2G and 3G coverage

2.3.1.2 Classification of VMS’s 3G products

With technological features based on 3G service, VMS’s 3G can be dividedinto different types: video calls, internet access on broad band, information,entertainment, and other applications All these will be provided to post and prepaidsubscribers

The list of service as the following

Figure 2-3: List of 3G service and product

Source: List of 3-G service and product of VMS

VMS provides all service, meets all needs for information andtelecommunication for both private and enterprise customers VMS will focus onthe provision of mobile internet access at high speed as well as new services

Figure 2-4: Revenue classification according to each service