Viettel's CASE STUDY

Viettel Group stands as a remarkable testament to how strategic vision and relentless innovation can transform a state-owned enterprise into a global telecommunications behemoth. Viettel, one of Vietnam's premier telecommunication firms, serves as an intriguing case study demonstrating not only business acumen but also a high level of adaptability in an ever-evolving digital landscape. Today, we delve into the incredible journey of Viettel, examining key strategic moves, innovative approaches, and its expansion across emerging markets.

The Humble Beginnings

Founded in 1989, Viettel began its journey as a small construction company with a modest mission: to build telecommunications infrastructure in war-torn Vietnam. Over the years, the company has grown exponentially. Spearheaded by the Ministry of Defense, Viettel transitioned from a mere infrastructure builder to a comprehensive telecommunication service provider. This metamorphosis is a lesson in leveraging existing strengths and accelerating growth through innovative strategies.

Strategic Vision: Digital Society and Beyond

Viettel's vision extends beyond traditional telecommunications services. Its mission to create a digital society transformed into actionable objectives focusing on e-Government, Smart City, and digital transformation services. From providing mere fixed-line telephony to becoming a frontrunner in broadband and IPTV services, Viettel has consistently adapted to digital trends.
The company operates not only within Vietnam but has extended its footprint to over 10 countries across Asia, Africa, and the Americas. Viettel’s global proliferation highlights its strategic expertise in identifying and penetrating emerging markets, effectively bridging the digital divide. In Mozambique, for instance, the company operates under the brand Movitel, providing affordable telecommunications and transforming local communication infrastructure (Nguyen, 2021).

Innovation Engine: Research and Development

What sets Viettel apart is its commitment to innovation, undergirded by a strong focus on Research & Development (R&D). With 13 R&D centers and nearly 20,000 employees dedicated to continual improvement, Viettel is relentless in its pursuit of technology-driven solutions. In 2020 alone, the company allocated a staggering USD 500 million towards R&D (Viettel Annual Report, 2020).
Their extensive network and technological innovations, such as the launch of Vietnam's first 5G service, underscore Viettel's forward-thinking approach. Leveraging R&D, the company has made inroads into various digital services ranging from cybersecurity and digital content to cloud computing and IoT (Internet of Things), thereby creating a diversified revenue stream.

Revenue Model: Beyond Traditional Telco

Viettel's revenue model is multi-faceted, covering a wide spectrum of services. The traditional core areas still play a substantial role—mobile services account for a significant portion of Viettel’s income. However, Viettel continually diversifies its portfolio to include fixed broadband, digital services, and international ventures.
Data from Viettel showcases that as of 2021, mobile services comprise nearly 45 percent of the company’s total revenue, whereas fixed broadband and digital services collectively contribute about 30 percent (Statista, 2022). The inclusion of supplementary services such as value-added services and interconnect charges further fortifies their revenue streams.

Cost Efficiency and Scalability

Viettel's expansive growth is also attributed to its cost-efficient model and scalable infrastructure. The company’s low operational costs allow it to offer competitive tariffs while also investing heavily in state-of-the-art technology. This balance is a hallmark of their operations, particularly significant given the cost-intensive nature of the telecom sector.
Investment costs, IT infrastructure, operations and maintenance, and R&D projects form the backbone of their cost structure. However, Viettel keeps operating costs manageable by leveraging economies of scale and implementing a centralized operating model.

Customer Relationships: Diverse and Strong

A major strength of Viettel is its inclusive approach to customer relationships. The company caters to a broad customer base ranging from mass-market consumers to enterprise clients and even other telcos. This diversity ensures that Viettel remains resilient in fluctuating market conditions.
Their customer service approach is multi-dimensional—ranging from 24/7 support and online agents to self-service platforms and traditional call centers. Social media engagements, email support, and word-of-mouth referrals further strengthen their customer relations, enhancing brand loyalty and customer retention.

Expanding Horizons: Global Ventures

One of the most compelling aspects of Viettel's strategy is its global outreach. The company has established subsidiaries in countries like Cambodia, Haiti, and Tanzania, often entering markets where the digital divide is stark. This strategy of targeting under-served regions not only meets a critical need but also catalyzes national development in these countries.
In 2021, Viettel Global’s revenue from foreign operations reached USD 1.3 billion, contributing significantly to the company's overall financial health (Financial Review, 2021). This international success is owed to a keen understanding of local markets, combined with technological prowess and financial investment.

Conclusion: Lessons from Viettel

Viettel’s case study underscores several actionable insights for businesses aiming for robust growth in challenging environments. Firstly, leveraging existing strengths to pivot into new markets and services is crucial. Secondly, consistent investment in R&D can create a sustainable innovation pipeline. Thirdly, a balanced approach to cost management while maintaining quality ensures long-term viability.
As Viettel scales new heights, continually broadening its service portfolio and global footprint, it serves as a paragon of strategic agility and execution. Its journey from a small construction firm to a global telecommunications giant offers rich lessons in strategic planning, operational efficiency, and innovative prowess—elements essential for any business aspiring for sustained, long-term success.
By remaining agile, embracing digital transformation, and maintaining a laser focus on both customer needs and technological advancements, Viettel exemplifies how state-owned enterprises can achieve both national and global excellence in the highly competitive telecom sector.