I. Introduction

When the domestic market has become increasingly swarming with mobile

operators, searching for a new foreign market is the demand of each telecom

enterprise to develop their business. However, it is an undeniable fact that most

Vietnamese enterprises investing in foreign market has not attained the desirable

foreign market. The case study of Viettel Telecom is the phenomenon on which

achieving the success not only in the national market but also in the overseas

market. The telecommunication services firm VIETTEL wants to expand its

activities to the international market. Aforementioned to enter an international

market, it is imperative to have a look at whether the telecommunication services

firm even has the assets and competencies indispensable for international market

entry, and whether the external milieu of that foreign market is adequately

attractive. There are two independent variables which are “entry mode choice” and

“services marketing plan” directly affect the entry strategy of Viettel. The advice

for Viettel Telecom is to focus on the relationship with its home country clients.

Through these clients it will be able to obtain projects in the foreign market. This

paper will propose a market entry strategy in which giving telecom services firms

an idea of what factors should be taken into account before international market

entry. It shows that an additional entry mode should be added: the transfer of

employees to foreign countries. Moreover, this research has examined the

opportunities and challenges for Viettel in the process of all-pervading foreign

market. Appraising the case study of Viettel in Cambodia could help other mobile

operators get the valuable lessons to develop more successful in the future.

II. The overview of Viettel in Cambodia market entry strategy

At the end of 2006, the Military Telecom Corporation (Viettel) had the first step

into Cambodia market and become the first telecommunication enterprise of

Vietnam investing into foreign market. This is the first foreign market and the most

successful market of Viettel. It will be explored the reason for the success and the

results which Viettel gained.

Viettel overseas investment, building infrastructure networks in the two

neighboring countries of Laos and Cambodia . In Cambodia , Viettel has built more

than 1000 base stations , deployed nearly 5,000 km fiber optic and become the

second business in the mobile infrastructure and business leader in fiber optic

transmission .

Viettel Cambodia since entering the market in June 2006 , after 3 years of building

and deploying networks , February 2009 Viettel has launched network called

Metfone. Currently, with more than 1100 BTS and 7000 km fiber optic cable,

Metfone become providers of telecommunications services has the best

infrastructure in Cambodia . Metfone network stretches from urban to rural areas,

with diverse products, Metfone has especially captured the hearts of the people of

Cambodia . Than 1 month after opening, Metfone has so far reached a total of

1,300,000 subscriptions activated.

 In 2009, with the goal of becoming the 2nd largest mobile network in Cambodia ,

Metfone currently continue to promote strategies to dominate the market . In

addition to the special wedding packages for customers such as students and

tourists .... at the conference, they announced Metfone mobile package at a cost of

$ 14 includes 1 brand new mobile phone, the SIM and $5 in your account. At the

same time introduce some equipment with the latest technology in Cambodia as

USB GPRS / EDGE , Modem ADSL +2 Modem ...

 With a total of 67 booths from 30 businesses, exhibition attracted a total of 20,000

visitors to visit in 3 days. This is considered to be one of the biggest events of

Cambodia's information technology. Metfone, as the main sponsor of the

exhibition, the desire to bring the telecommunications products and services closer

to the people of Cambodia , contributed to the development of ICT sector in the

country .

Current status of market selection - target countries – Cambodia:

In fact , Viettel Cambodia is a destination chosen for their business plans . How can

Cambodia have this business- charisma like? This section will focus on analyzing

the factors of Cambodia's business environment and the available resources of the

corporation Viettel to answer this question.

The elements of the business environment in Cambodia:

Cambodia's economy

Cambodia's economy, despite recent strides, but still suffer the legacy of decades of

war and civil war . Per capita income, though growing fast, is still low compared

with most neighboring countries. Mostly rural households depend on agriculture

and related sub- sectors. The manufacture is diverse but not large-scale and largely

conducted on informal small scale. The service sector heavily focused on the

commercial activities and services related to the supply chain. Reuters article that

has some reserves of petroleum and natural gas were discovered offshore. The

exploitation of oil and gas could potentially bring great effect on the future

economy.

Cambodia's economy is relatively stable growth over 2000 to 2005. 's GDP in 2005

was about 5.4 billion U.S. dollars, the GDP per capita of $ 375 USD (according to

IMF data ) . According to ADB estimates, Cambodia 's GDP will continue to grow

at the rate of 6-7 %

Structure of GDP : agriculture 35 % , industry 30 % Services 30 %

The exchange rate under a floating regime: the average exchange rate in 2004 :

4016 , 25 Riel / USD , up 1.1 % compared to 2003 and 2.7 % compared to 2002

2001 2002 2003 2004 2005 20060

1

2

3

4

5

6

7

GDP Growth rate in the year 2001 - 2005

Series 1

Previously, the Civil war destroyed the country’s infrastructure especially in

telecommunication network. Cambodia has been funded by the international

organizations and foreign countries in order to restore the telecommunication

network. In 1990, Cambodia received 21.5 million USD from the United Nation to

implement the project in which set up the fix-line, PABXs office, satellite earth

station. In 1996, the Government of French and Japan financed to Cambodia to

build the telecommunication infrastructure and extend the fixed line network. In

1997, the International Development Research (an organization of Canada) helped

Cambodia to develop the internet infrastructure.

Network infrastructure, Telstra Corp is one of the first foreign companies to invest

in Cambodia in the form of business cooperation contract with the

telecommunications Cambodia to the international port operators. Telstra set up a

satellite ground station using Intelsat satellites in Phnom Penh in 1990, providing

the first international connection in Cambodia. In 2000, Telstra handed over to the

Cambodian government for management and exploitation.

The situation of competitive environment of Cambodia mobile phone

market

Just now, the mobile market of Cambodia has become more and more competitive

because of the business operations of 8 mobile service providers including Viettel.

It is vital that the operators improve network infrastructure, develop the coverage

area, and enhance the service quality if they want to compete. Additionally, they

have to promote their services in order to attract more consumers and increase their

market share.

Viettel has faced with a number of issues when penetrating the Cambodia mobile

phone market. Viettel realized a number of difficulties in competitive aspect while

having a plan to invest in Cambodia in 2009. Despite the small scale of the

Cambodia market, in this market, both domestic operators and foreign operators

with their financial and international experience potentials have operated in this

market. Upon entering Cambodia market, Viettel has competed with three big

operators known as Mfone, Mobitel and TMIC Cambodia. They have entered the

mobile market of Cambodia for 10 years and consisted of 95 percents of the market

share. One more important competitor of Viettel is the joint venture of Millicom

and Cambodia Royal Group namely Mobitel.

Due to the breadth of the report I will only mention one competitor which is

Mobitel of Royal Grop

Cambodia's Mobitel of Royal Group

Strengths

Strong knowledge of Cambodian culture with over 10 years experience

There is a close relationship with the royal government of Cambodia

The only compact mobile international gateway licenses

No. 1 in the number of mobile subscribers

High profit

Nationwide coverage and are stepping up in rural areas

Weakness

Without the support of the Millicom Group

Why Viettel choose Cambodia's environmental goals

1. Cambodia is a potential market because people mainly use mobile (Only 5%

of the population use the landline). Moreover, the telecom company still

superficial when investing in this market

2. The elements of the business environment in Cambodia are considered

favorable and consistent with the ability of Viettel - mother development

facility in Vietnam with much experience of market development.

3. Cambodia had similarities in culture, ability and market knowledge gap near

advantage when building infrastructure

4. Relations of Vietnam - Cambodia has a long tradition, especially in the

military should Viettel will get more attention and direct guidance of the

leaders.

In order to analyze all aspects related to Market penetration method Cambodia

Viettel in Cambodia telecommunication market, the researcher presents SWOT

model of Viettel in Cambodia.

Strengths

Viettel method used to penetrate the Cambodian market is a form of direct

investment with 100% capital from Viettel Telecom.

Market entry method best to minimize the risk of losing the ability to control

and monitor technology in competition

The establishment of the company makes Viettel Corporation can in every

strategic initiative, tight control of operating in different markets .

Weakness:

This method is expensive because companies must invest 100 % capital

infrastructure network to serve foreign markets.

The parent company must bear all risks of overseas subsidiaries due to the

volatility of the economic conditions, political and social.

The Viettel employees have a background on technology and management

but they have not so much experience in Account and marketing. Viettel has

developed their business activities in many part of the telecommunication

sector. It required a number of various experts in different technology.

Opportunities:

More and more people choose Metfone as their mobile service providers. It

leads to the fact that the market share of Viettel in telecommunication market

has increased.

It also affects to the belief of the investors and through that, they could

increase the funds for improving the business activities.

The Cambodia telephone market has a great potential because of unexploited

areas.

Threats:

In the context of fierce competition, Viettel has to deal with not only local

providers but also international providers. It is really a great challenge for

Viettel.

In 2008, the global economic crisis affected the economy of all countries in

the world and Cambodia is no exception.

Viettel has challenged a number of issues when decided to invest in

Cambodia in 2009, which could affect to their business operations.

The Cambodia’s government role in the entry of Viettel Telecom

The government of Cambodia has continued to implement the reform on

administrative procedures and open the economy, creating the best business

environment for developing economy, trading, increasing the foreign investment in

order to create more new jobs, improve the life of the people.

The Vietnamese enterprises has considered the Cambodia market a new potential

market but had yet a number of risks by complex payment method, weak skill of

employees, incompleted infrastructure in some places of Cambodia disheartened

the investors. However, these weaknesses will create the real investment

opportunities for Vietnamese in related sectors.

When investing in Cambodia, the investors will receive a number of preferences on

tax because currently, Cambodia has received preferences for GPS on trade

preferences from more than 40 countries in the Southeast Asia and around the

world.

Proposal for Viettel’s market entry strategy

Situation selection method to penetrate the market

1. Viettel will establish a 100 % foreign investment in Cambodia named Viettel

Cambodia Pte Ltd with the aim of surveying and Cambodia market access

opportunities to be attacked in this market .

2. On this basis, Viettel will invest 100 % of the capital to build a new mobile

network using GSM technology in Cambodia

3. In Phnom Penh, Viettel will rent office , rent land to build a central machine

room where the equipment and machinery .

4. In addition, Viettel also hired six other provinces position to store

transactions, callcenter, jobs for parts information and answers to place the

BTS equipment

First, the Viettel need to do is research the market and segment customer groups

and market segments selected target group

Viettel are to ask the following questions and answer them: customers, who are

they ? Where are they? What do they seek in Metfone?

Customer Segmentation:

Viettel to segment customers according to 3 criteria: 1 is age group 2 is the actual

use of services, 3 is based on social characteristics .

Based on social characteristics, we can see groups of customers can be layered as

the following:

International Tourists

Monks

The army, police, civil servants state agencies

Enterprises and Traders

Overseas Vietnamese, Chinese. overseas

Farmers and fishermen

Students

Viettel to reach client groups where there is no coverage (If Metfone has the first

and the best coverage in the area, they will easily become the customers of Metfone

) ; group customers choose products according to price criteria ( If Metfone have

cheaper packages of other firms , they will use the Metfone ) . At the same time,

Metfone should also introduce mobile gadgets to consumer groups unknown to the

benefit of the Metfone mobile is what to use.

Research each customer group.

For example: With groups of customers are tourists, they will call a lot

internationally, over the internet to look up information not necessary to call in the

country. Taking such characteristics, Metfone can build packages with reasonable

prices for target groups.

Example 2 : The target group is farmers, fishermen , they rarely use the type of

value-added services , mainly listening to calls, messaging so rarely Metfone

should build package with cheaper on-net call time, more applied applications ,

offering on-net call time ,listen ,. With each different age, different social positions

that Metfone can build the basic information about the service pack. For example,

as opposed to groups of farmers and fishermen's group students, they mostly use

messaging, and this group has the habit of using value-added services.

Product Policy:

Goods of Metfone are mobile network, network coverage, network quality and

intelligent utility in mobile technology. Product quality was assessed with features

and the effect of telecom products that customers use. That is the speed of

information transmission, the accuracy and authenticity of news and information

recovery , the stable operation of the media . To achieve this, as soon as Viettel

invested in Cambodia, Viettel should pay attention to the construction of

infrastructure to be able to provide services with the best quality to customers

Develop mechanisms and policies for each customer group:

It is the design of products specific to the customer (rates , features bundled

services , customer care , call center explain questions )

When first built any package must clearly identify who your customers are .

Specifically: If the orientation is to build customer groups of international tourists ,

the package must be attractive international calling rates , increased service

instructions on the streets , beautiful landscapes and location package which have

limited usage time is short .

Policy package must be competitive with rival rates and customer appeal. Viettel

Cambodia should be driving the price of the service pack is cheaper from 15-20 %

to be highly competitive

Pricing policy

When penetrating a new market like Cambodia, Viettel should learn from

experience and apply the success achieved in the Vietnam market. In Cambodia,

Viettel should adopt similar policies in Vietnam:

Plans are cheap, flexible, and suitable for people; Viettel pricing strategy must be

very flexible to help the Cambodian people have more choice through diverse

package with a minimum value / moderate levels of market economy in Cambodia .

The mode of charging by the second block 1: Viettel maintain calculation

method 1 second block in Vietnam's market and brought into Cambodia ,

that is subdivided by charging more than the way of the charging other

vendors did. The method of calculating this fee will be applied to all

directions from the inter- network calls and international. This is predicted to

attract people to use Metfone network because it will reduce the cost to the

people of Cambodia to 25 %

Profit sharing policies to consumers over the number of minutes they had heard in

months ; client money will be added to the account corresponding to the number of

minutes they had listened in months both on-net and off-net . Metfone, if made

under this policy, Viettel will be the first and only network in Cambodia has the

policy which is listen to phone calls will also receive money.

III. Conclusion

The international market has countless prospective for Vietnamese enterprises in all

sectors especially for telecommunication enterprises. In the context of

globalization, the race between mobile service providers has become increasingly

harsh and the domestic market has become saturated. Investing in foreign market is

one of the best choices for all enterprises in this time especially for

telecommunication enterprises. However, it is not easy to enter a foreign market

because every country has their own barriers to protect their national enterprises.

For the case study of Viettel, the international market penetration is a great

opportunities but it also has lots of difficulties and risk during the process of doing

business in international market. In order to exist and progress in the international

market, Viettel has to try their best to understand the foreign market, their

customers’ demand, interest, custom. Proposing an international market entry

strategy of Viettel is a chance for student to understand the operations of Viettel

and make the decisions to turn Viettel in the leading telecom brand of Vietnam in

international market. International business strategy in addition to the flexibility of

international market penetration has contributed to the success of Viettel in

international market. The new position of Viettel in the heart and mind of

Cambodian has been gradually strengthened.

Reference

Thongtincongnghe.com, (2014). Viettel muốn là số 1 tại Campuchia. [online]

Available at: http://www.thongtincongnghe.com/article/9842 [Accessed 27 May.

2014].

Viettelonline.com, (2014). Viettel 3G Internet » Metfone. [online] Available at:

http://www.viettelonline.com/tag/metfone [Accessed 27 May. 2014].