Viettel expands overseas investments hinh anh 1Illustrative image (Source: Viettel)

Hanoi (VNA) – Viettel Group’s total overseas investment increased by 9 percent to nearly 1.5 billion USD in 2015, an expansion rate four times the average of the global industry.

According to UK-based OVUM - a market-leading research and consulting firm specializing in global coverage of information technology and telecommunications industries – the global industry rate was only 2.3 percent.

The group’s annual growth – at 27 percent - is also impressive compared to many other multinational telecom firms. For example, Vodacom – an African mobile communications company -- saw turnover grow by only 2.1 percent in 2015. Vodacom’s subscriber numbers grew 7.2 percent.

Last year Viettel launched operations in three big African markets, Cameroon, Burundi and Tanzania. The three have a combined population of 80 million, three times that of Mozambique, Viettel’s only other market in Africa. The expansion has increased Viettel’s international markets to 10 nations with a combined population of 270 million, three times the Vietnamese number.

With over 50 million people, Tanzania is Viettel’s biggest overseas market. By hitting 1 million subscribers in just 3 months, it is ranked as the fastest growing affiliate of Viettel as well as in global telecom industry.

In March 2016, Lumitel (Viettel’s brand name in Burundi) has become the leading operator in this country with 1.6 million subscribers due to the miracle growth of 1 million subscribers after only 5 months. In Cameroon, Viettel also made a success by reaching 2 million subscribers in 9 months.

Previously, with the significant achievements in Mozambique, Movitel has been nominated as the “Miracle of Africa”. The company is the leading operator in term of infrastructure and subscribers. Movitel was honored with 6 international and regional telecom awards.

International telecom experts have hailed Viettel’s strategy to quickly expand market size as a wise decision because market size is the most important factor in achieving success in telecom and retail. In Vietnam, Viettel has been successful with its robust investment and expansion strategy in its early stages so that very soon it became the leading service provider.

However, launches in three new markets within a year between late 2014 and 2015 increased Viettel’s expenditure in Africa from 50 million USD in 2014 to 230 million USD in 2015. But usually a telecom project takes 5 – 7 years to break even.

Profits from Viettel’s international markets have not met expectations. Last year total profit after tax was only 500 billion VND (around 22.7 million USD) despite the fact that profits from other markets were good -- 1.235 trillion VND from Asia. After 5 years of operations, the American market has moved from a loss of 87 billion VND to a profit of 213 billion VND in 2015.

Furthermore, exchange rate volatility has affected network providers all over the world. In Africa, for instance, exchange rate fluctuations were estimated to account for 32 percent of expenditure.-VNA