Development of telecommunication services business in Vietnam in the context of international integration: Case study of Hanoi Telecom Joint Stock Company

sources. b) Factors affecting the competitiveness of the telecommunications industry Factors affecting the competitiveness of the telecommunications industry include: the number of entities participating in the industry, revenue, the quality of services that meet customer needs, and inter-criteria. These are related to labor productivity and criteria related to the development of the telecommunications industry (ICT-OI). 2.6. Telecommunication service business experience of some countries in the world and lessons learned for telecommunications businesses in Vietnam 2.6.1. Telecommunications business experience of some countries in the world a) Business experience of Chinese telecommunications enterprises Expanding network capacity and scale of coverage: anticipating subscriber levels, the corporation continues to expand its coverage and increase network capacity, focus on developing fast GSM networks, continue to improve and maximize TACS network optimization. When expanding the network, the corporation may have to build its own transmission infrastructure in some areas where the provincial post offices have not installed transmission equipment. Enhancing network quality and operational functions: To enhance the overall performance of the network, the group is developing value-added services, including voicemail, short messages and data transmission capabilities. advanced data that the group thinks will increase subscriber usage and create new sources of revenue for the group. Increasing focus on equipment and distribution to expand subscribers: The Group expands its subscriber base by developing its image as a quality service provider through the promotion of activities. stronger advertising. The Group also develops an extensive distribution network to telecommunication retail stores and post offices and continues to expand its own retail stores, exploiting opportunities to diversify distribution channels. Continuing to pay attention to after-sales service and strengthen customer loyalty on mobile technology, network characteristics as well as their services. The Group offers a wide range of customer services from point of sale onwards, including customer helplines, Customer Service Centers, online support for customers with payment questions, technology and other aspects of exploitation and services; complete other aspects of customer service, including invoice accuracy, convenience of payment, and the timeliness of solving network problems to strengthen customer loyalty. Cost control and operational efficiency enhancement: The Group focuses on cost control, improving operational efficiency through the implementation of advanced information management systems and international management techniques. , and by maintaining and engaging highly qualified employees to enhance their profitability. Exploiting strategic investment opportunities in the telecommunications industry in China: Given the rapid growth of China's telecommunications industry, the group recognizes that there will be attractive opportunities for strategic investments with other telecommunications service providers. The group intends to take advantage of its unique position to access international capital markets in order to exploit opportunities to win contracts on mobile communications or telecommunications in general in China. b) Business experience of American telecommunications businesses AT&T AT&T identifies the future trend as users to watch videos via smartphones. However, AT&T is inherently a corporation that benefits primarily from traditional development models such as paid TV channels, which are at risk from new technology innovations. From AT & T's strategic point of view, whatever the future of communications, the group will focus on video content. Intel Corp Intel has shifted from traditional telecommunications to new businesses. Telecommunications development results show that the new telecommunication development strategy is gradually promoting efficiency and creating a solid foundation for development. 2.6.2. Lessons learned for telecommunications businesses in Vietnam - Quickly expand coverage and increase network capacity - Rapidly expanding distribution channels - Improve the quality of service and customer service - Promote customer care activities - Flexible and scientific management organization model - Increasing investment in research and development CHAPTER 3: CURRENT SITUATION OF VIETNAM TELECOMMUNICATIONS SERVICE BUSINESS - CASE STUDY OF HANOI TELECOM JOINT STOCK COMPANY (HANOI TELECOM) 3.1. Evaluate the current situation of development of Vietnam's telecommunications service business a) Actual situation of contributions made by telecommunication business in Vietnam - Expanding the information network, enhancing domestic and foreign exchange capacity: The post and telecommunications services help society save time, shorten distances and bridge distances. - Provide additional tools to manage the country, ensure communication for national security, national defense, flood and storm prevention, and serve important events of the country: important means and media for facilitating the production, exchange and consumption of products and services of all other economic sectors.  - Contribute to improving and improving the physical and spiritual life of the people: The postal and telecommunication service is the most effective and fastest information tool with a prompt, accurate, safe and convenient request. convenient for all areas of social life, including politics, economics, culture, society and national security and security, which are sensitive factors related to socio-political, economic and military issues. and national security, are important management tools of the political system. - Contributing to the industrialization and modernization of the country, creating favorable conditions for development of other economic and social fields: The development of post and telecommunications services has the effect of promoting the growth process. economic, social economic restructuring towards progress, improve productivity and efficiency in rural agriculture, industry, social services such as education and training, health care ... improvement improve the quality of life in developing regions, encourage community and enhance cultural identity in remote areas and remote areas, and promote the cause of industrialization and modernization. - Provide solutions to reduce development costs and increase social labor productivity: including reducing machine downtime, reducing inventory, bringing products to market on time, reducing transportation costs , and energy saving. b) Overview of telecommunication service business in Vietnamese enterprises This section will analyze the strengths and weaknesses based on the business situation of key telecommunications enterprises in Vietnam. Here are seven key telecommunications businesses studied: Table 3.1: Key companies in the field of Telecommunications in Vietnam Company name Ownership Market share Vietnam Posts and Telecommunications Group State-owned (100%) Local telephone, inter-provincial and international, data, internet VinaPhone Vietnam telecommunication service company (100%) Mobile phone Mobifone Vietnam telecommunication service company (100%) Mobile phone Viettel Ministry of Defence Mobile phones, local phones S-Fone Joint Venture of Saigon Postel and SK Telecom Mobile phone EVN Telecom Vietnam Electricity Company (100%) Local telephone, inter-provincial and international, data, internet Hanoi Telecom Joint Venture of Hanoi Telecom, Hutchison Telecommunicatons International (HTIL) Mobile phone Source: BMI c) Evaluating through the analysis of the telecommunications business situation of enterprises and telecommunications market in our country - Advantages and achievements: + Attracting many foreign businesses and investors: With the entry of foreign investors into the domestic telecommunications market, the telecommunication industry will increasingly develop towards modernization due to Many large telecommunication enterprises in the world will enter the Vietnamese market, bringing technology, financial resources, knowledge and experience to exploit telecommunication infrastructure in Vietnam. + Telecommunication business has high growth rate: Although Vietnam is a developing country, the telecommunication business in Vietnam has had a strong growth in recent years. The telecom industry has experienced a high growth rate with the development of mobile telecommunications and internet, reflected by the increasing number of users and access. + Positive revenue structure: Revenue from telecom and internet business increases, while revenue from mobile phone services tends to decrease, the proportion of revenue from mobile services accounts for big weight. This shows the positive trend of the telecommunications business market. Although mobile phones and the internet appeared after landlines, they quickly dominated the market due to their convenience, modern technology and low cost. + Increasing labor productivity: Labor productivity of telecommunications business in general and enterprises in particular has shown positive results. + Service quality is gradually improved: Telecommunication business is developing rapidly, although service quality has increased more slowly, it has been gradually improved to meet the needs of the market. - Disadvantages and issues raised: • Competition among companies operating in the same industry that develop telecommunication products and services. • Competition of potential competitors: Potential competitors are businesses that are not currently in the telecommunications product service business but are likely to participate in business development activities in that industry. Businesses in the industry are always looking for ways to limit other businesses want to participate in the industry because if there are new competitors, the profitability of the business will be affected. In fact, in Vietnam a number of businesses are not operating in the field of telecommunications services business but have also participated in this industry such as Electricity of Vietnam. • Pressure from customers: This pressure comes to any development industry, not just the development of mobile telecommunications services. As the economy develops, consumers' awareness is getting higher and higher, the demand for telecommunications service quality is also increasing. This makes the business development of this product always under pressure to explore and improve the quality of telecommunications services. 3.3. Overview of the development process and characteristics of telecommunications business development of Hanoi Telecom This section outlines the development process and business characteristics of Hanoi Telecom Joint Stock Company - Hanoi Telecom for more than 15 years of construction. Vietnam Telecom's mobile network of Vietnam Telecom is a result of the cooperation and development process with Hutchison Telecom, the world's leading telecommunications corporation. 3.4. Business situation of Hanoi Telecom a) About expanding the coverage area Recognizing that besides lowering the cost of services, the company also had to improve the service quality, Hanoi Telecom quickly implemented the construction of a network of base stations nationwide, so in 2008, Hanoi Telecom only there were 1000 BTS, by 2009 it was 5000 BTS. b) Regarding subscriber development and market share expansion Hanoi Telecom has successfully implemented its focused growth strategy. In 2009, Hanoi Telecom developed more than 7 million new subscribers, an encouraging number for a new network operator. c) Development of service scale Hanoi Telecom is always strengthening its market expansion and service scale activities by creating a competitive advantage for its products and services. The competitive weapons that the company uses are mainly product quality, product cost, product differentiation, customer care regime. d) Regarding turnover Hanoi Telecom has well implemented its strategy of setting prices lower than competitors, thus attracting a large number of customers to join the network, increasing revenue rapidly. Currently, Hanoi Telecom is one of the market leaders in terms of low price. e) Marketing activities, branding and development Currently, marketing is a strength of Hanoi Telecom, the company has a strong marketing staff, distribution channels and customer care agents everywhere contributing significantly to the Vietnamobile brand. f) Regarding renovation of enterprise management organization Hanoi Telecom always chooses its human resource strategy to put people at the center, considers businesses as a means for people to promote their creative talents, trust their partners, build a working team with effective. Table 3.4: Structure of human resources of Hanoi Telecom No. Total Age range Level <28t >28 and <40 40 Post grad Grad College Intermediate Primary High school Vocational training Others 1 Total 2.043 1.363 630 50 12 1.070 400 373 125 22 40 1 2 Rate 100% 66,8% 38,8% 2,4% 1% 52% 20% 18% 6% 1% 2% 0% Source: Hanoi Telecom Administration Department The table above shows that the proportion of young workers under the age of 40 accounts for up to 90%, of which the number of undergraduate and graduate students accounts for 53%, this is a dynamic and creative young staff. , devoted to work. This is the strength of Hanoi Telecom used to meet the service needs of the majority of customers. 3.5. Analyze the competitive advantage in Hanoi Telecom's telecommunications business according to Michael Porter's 5-force competition model This part analyzes the competitive advantage in Hanoi Telecom's telecommunications business according to Michael Porter's 5-force competition model. Accordingly, the company has low bargaining power of suppliers but high bargaining power of potential rivals, high bargaining power of buyers, high industrial comparativeness, and high threats from subtitutes. 3.6. Assess the status of business development of Hanoi Telecom a) Achievements - Socializing telecommunications services Nowadays, young people have a higher lifestyle and increasing needs. Consumers are focusing on modern and convenient living, so products or services can give an image of social status or an important role. Hanoi Telecom has known to take advantage of these opportunities to socialize its telecommunications services. On the other hand, word of mouth culture in Vietnam plays an important role in the marketing of new products and services. Hanoi Telecom has paid attention to customer satisfaction with good service quality and low price, which is the best and most effective advertising that businesses should apply. - Narrow the distance of telecommunications technology development with the world In Vietnam, businesses including Hanoi Telecom have been applying 3G to their products and services. Telecommunication service operators such as Hanoi Telecom have paid attention to the changing technology of the world market to select and invest in their own technologies, avoiding becoming a latecomer in providing telecommunication services. mobile. - Diverse and user-oriented services User-directed When preparing to enter the development of mobile telecommunications services, Hanoi Telecom determined a competitive strategy from the beginning, which was to compete on price and advantages of latecomers such as service quality, initial cost. investment, distribution system, online customer care system (customer service centers), ... Diversify services Products that mobile telecommunications service providers bring to customers are packages with the convenience of usage as well as the services that accompany it to best satisfy customers' needs. Hanoi Telecom also always pays attention to that and always focuses on creating packages to best satisfy customers' needs, in accordance with the psychology of each specific customer group. That's why the company offers packages like VMOne, VM24, and VM18. Hanoi Telecom created the package based on the needs of customers and based on their psychology. b) Shortcomings and limitations - Uneven growth In its overall strategy, Hanoi Telecom also identified a small market, full of potential as a rural market with more than 60% of the population concentrated there. However, telecom businesses in general and Hanoi Telecom in particular have not really paid attention to effectively exploiting mobile services in rural areas but are focusing more resources on competing in the market in cities. Towns. Rural market is still a market gap that Hanoi Telecom needs to exploit and if there is a reasonable exploitation strategy, enterprises will gain significant profits from this market. - The density of service users is still low Due to our changing economic conditions, the gap between rich and poor is still large, the rich are richer and the poor are not better off, leading to the large consumption of services. In urban areas, rural consumption is not significant. In addition, due to objectivity from the customer and the psychology of any supplier who promotes, buy sim and use the provider's service and only use it until the end of the promotion, it will only lead to the number status High virtual subscribers, the number of service users is low. - Profit / subscription ratio is declining Hanoi Telecom's low pricing strategy has both advantages and disadvantages, which leads to price competition among telecom service providers. Moreover, if customer loyalty is not strengthened, the average revenue per subscriber will decrease, leading to the declining profitability rate. On the other hand, it is likely that new competitors and the industry will also adopt low-cost strategies to penetrate and dominate the market, they are the latecomers so they will have technological advantages compared to their competitors. before. - Service quality is not yet stable Hanoi Telecom is committed to providing customers with increasingly high quality services, but it still cannot remove certain restrictions such as congestion on holidays, New Year holidays and holidays. Sometimes customers encounter the inconvenience when they want to register to use Hanoi Telecom's mobile services, sometimes they want to change the customer service which cannot be done via SMS but must go to the Hanoi Telecom store to registration. - The number of services is limited It can be said that Hanoi Telecom's packages have different differences compared to competitors and thus it becomes a choice of customers when deciding to use Hanoi Telecom's mobile telecommunications services. However, the value-added services and network utilities are not much different from the competitors, maybe it is just a little lower price than other competitors. Services with low value-added services and market prices of using value-added services in general and of Hanoi Telecom in particular are still relatively high, not attracting a large number of customers to participate. use. - Inadequacies from management mechanisms Sometimes the company has not really paid attention to the efficient exploitation and use of human resources, and there are still idle employees while other employees struggle with thousands of jobs. Therefore, it is required to carry out effective work assignment to ensure the smooth and efficient operation of the members. At the same time, the fact that employees leave the company still results in the loss of training costs for the company and the company also loses good qualified employees. 3.7. Opportunities and challenges for the development of Hanoi Telecom's telecommunications business a) Opportunities for business development of Hanoi Telecom - Supplier Hanoi Telecom as well as other service providers in the market are always affected by the suppliers. Hanoi Telecom always has to import telecommunication equipment from suppliers in order to improve the quality of coverage and the quality of services provided to customers. However, there are many providers of telecommunication services on the world market. This is a advantage for the company in selecting suppliers and avoiding pressure from the supply side. - Potential customers Main customers of mobile telecommunications service providers are concentrated mainly in cities and towns, the percentage of customers in rural areas is very small compared to the potential of this market. The majority of customers are characterized by preferring low-quality and appropriate products and services, thus creating a market gap for businesses after exploiting services. If service providers such as Hanoi Telecom meet the needs of rural customers, they will gain a source of potential customers. - Potential market Living standards are increasing, consumption of mobile telecommunications services is therefore increasing, and service providers like Hanoi Telecom need to recognize this trend to seize market opportunities and create new products. New products and services to meet the needs of users in each strategic period. b) Challenges to business development of Hanoi Telecom - Competitors Vietnam's telecommunications market is in a period of strong growth, one of the three key industries of Vietnam, competition among enterprises in the industry is fierce. The price war, product quality is being strongly applied by businesses. Especially for mobile telecommunications services, it is even more important. Each business has a certain advantage in the fight: price, products, technology, brands, customers, ... This has greatly affected the development of mobile telecommunications services. by Hanoi Telecom. -Supplier In addition, all mobile service providers have to make connections with each other, in which VNPT has the power to create pressure for businesses to connect through them because they have the infrastructure. This is another difficulty for mobile telecom service providers like Hanoi Telecom. - Customer psychology It can be seen that whenever suppliers offer new promotions, they attract a mass of customers from other suppliers and they use the service from two or more providers simultaneously, Sometimes when a promotion ends, they no longer use the service of that provider. That sets Hanoi Telecom a requirement on how to keep customers staying with the service providers for the long term, which means how to be loyal to the services that businesses provide. - Pressure is replaced For mobile telecommunications services, the products that can be replaced are fixed line phones and Internet. These two types of services coexist with mobile telecommunications services. Especially with the advent of wireless fixed-line phones with the ability to use services similar to phones, this is yet another pressure for mobile telecommunications services. - Challenges in telecommunications • Nearly one-third of Vietnam's villages are located in mountainous areas and do not have access to telecommunications services, which makes the deployment of new network technologies more likely to be delayed. • The pricing competition strategy of all three leading operators in the country is likely to maintain pressure to reduce the average mobile revenue of a customer. • The number of inactive mobile subscribers has not been clarified, so the market still lacks transparent and reliable data. • The field of landline phones may go into recession, with potential negative consequences for the growth of DSL lines. • As the market for data services for mobile phones grows, this can have potential negative consequences for the development of fixed broadband services. • A slowdown in economic growth in 2009 and 2010 may weaken investment and landline expansion plans.  3.8. The context of international integration of Vietnam telecommunications a) Actual situation in anticipation of Industry Revolution 4.0 of Vietnamese telecommunications enterprises Since the end of 2016, the Ministry of Information and Communications has been actively researching and reporting to the Party and Government leaders on the trend of Industry 4.0 and the implementation opportunity. On May 4, 2017, the Prime Minister issued Directive 16 on strengthening the capacity to access the Industrial Revolution 4.0, in which the Ministry of Science and Technology was assigned to preside and coordinate with relevant ministries and local agencies. related to science and technology programs and tasks, approaching Industry Revolution 4.0. One of the tasks assigned by the Government to the Ministry of Information and Communications in Directive 16 is to focus on infrastructure development, IT, and policies to encourage enterprises to invest in developing and trading in