Viettel makes bank from international markets

Positive foreign exchange developments helped Viettel's African brands to contribute to the growth

Viettel Global’s half-year report states that the company has achieved sales of up to VND14 trillion ($600 million) from its nine international markets. After tax, the profit was VND1 trillion, bringing Viettel Global back to the club of trillion profitable companies from overseas investment activities.

The outstanding financial results are due to positive movements in traditional and new markets alike, as well as new strategic projects, strong shifts in new services, and favourable exchange rate movements.

Movement in different markets

In addition to Laos, Cambodia, and East Timor, which have been consistently fetching good net profits to Viettel Global, other companies in Peru, Burundi or Haiti are also making big contributions to the strong growth.

In the first six months of the year, Viettel's sales in Peru and Burundi have exceeded East Timor. Sales in Peru and Burundi grew by 82 and 38 per cent respectively, while East Timor only reached 29 per cent. Even Haiti, the market is currently recovering from the 2016 typhoon, has achieved sales growth of 15 per cent over the same period last year.

Peru and East Timor remained the two most prominent markets of Viettel in the past six months. Viettel's pre-tax profit in Peru has reached VND405 billion ($18 million), surpassing expectations by 132 per cent. Furthermore, Viettel’s profit in this market has also reached VND2.5 trillion ($112 million), an 82 per cent increase over the same period last year and an increase of 3 per cent over the original plan.

In East Timor, Viettel Timor Leste (Telemor) has earned VND340 billion ($15 million), an increase of 29 per cent over the same period last year, exceeding the target by 10 per cent. The number of customers increased by 42 per cent over the half-year plan.

Favourable exchange rate movements

A welcome change from 2016, Viettel is benefiting from exchange rates movements in its new markets, primarily in Mozambique and Cameroon. The exchange rates of the Mozambican metical and the Central African CFA franc (used in Cameroon) have both leveled of against the US dollar, helping Viettel earn huge profits in these countries.

For example, the governments’ strict control over exchange rate slippage helped Viettel reach a 14 per cent profit in Mozambique and 7 per cent in Cameroon. Potential markets, such as Peru and Haiti, also benefited from this control by gaining 3 to 6 per cent increases in profit.

According to general director of Viettel Global Le Dang Dung, if the situation continues to be favourable till the end of the year, Viettel will report immense profit from these markets, especially in Mozambique and Cameroon, where the profit could reach $60-70 million.

New services and strategic projects

Dung said that by setting specific targets for each market separately, depending on the characteristics of GDP, scale, geographical situation, and issues related to finance and politics, Viettel has developed a unique plan for each brand abroad. Through scale development, subscriber growth, service enhancement to real APRU (average revenue growth per user), Viettel Global is ultimately aiming for the $250-million international profit in 2017.

Viettel has also been gradually reshaping its image to bring in new young customers in its traditional markets. For example, after being framed as "the network of the elderly" in Cambodia for a long time, Viettel Global has taken steps to attract new, younger groups of customers who are more likely to spend more.

By changing the colour of the logo, organising events attractive to young customers, and changing customer care strategies, Metfone (Viettel’s Cambodian arm), has reached the total of seven million subscribers during the first half of 2017.

Viettel’s brand in Laos, Unitel, has quickly reached four million subscribers, maintaining the No.1 position in the market. In East Timor, Viettel utilises new frequencies to bring in millions of dollars in profit and promotes new 4G data services in the country.

In Peru, thanks to early investments in 4G networks, Bitel has become the largest 4G network operator in Peru, with 5,000 residential centres through 3,000 stations. Only in the first 6 months, the number of Bitel customers has increased five-fold, bringing the total number to over two million.

In order to maintain its leading position in its international markets as well as create momentum for the next years, Viettel Global will focus on new business models, such as IT solutions, electronic wallets, population management systems, and tax solutions, among others.