Viettel head and shoulders above telecoms brands

Viettel has been out-performing regional competitors. Photo: Le Toan

The Global 500, which is an annual report on the world’s most valuable and strongest brands conducted by UK-based brand consultancy firm Brand Finance, has ranked Viettel as the top telecoms firm in Southeast Asia regarding trademark value.

Valued at $5.8 billion, up 34 per cent compared to $4.3 billion in 2019, Viettel was ranked 355th in the world (up 126 places compared to last year), 102nd in Asia, and fourth in Southeast Asia.

Among the seven Southeast Asian companies in the Top 500, Viettel was ahead of Singapore’s OCBC Bank, Telekom Indonesia, and UOB Bank from Singapore, and was behind only Thai oil and gas firm PTT, DBS of Singapore, and Malaysian giant Petronas, who were ranked 120th.

The Brand Finance report showed that this is the most impressive and highest jump in the rankings. In particular, Viettel achieved the highest brand value growth in the world in the telecommunications sector.

Brand Finance’s CEO David Haigh spoke about Viettel’s achievement, “A few telecom operators have achieved growth regarding brand value this year, but first position belongs to Vietnam’s Viettel brand. In 2019, Viettel’s consolidated revenue increased by 7.4 per cent on-year. In addition to the improved revenue from 4G services and overseas markets, the company has a large number of mobile customers.”

According to Haigh, the combined value of the Brand Finance Global 500 has increased by less than 2 per cent on-year, and while 244 brands have increased their brand value, a further 212 are down, including nearly 100 by 10 per cent or more. Those who once enjoyed long-term success are now needing to adjust in a world more unpredictable than ever, while many tech brands are suffering after failing to meet the bullish expectations of investors.

Do Cao Bao, a member of FPT Corporation’s Board of Directors, said that Viettel gained its lofty position thanks to the common slow growth in the world market. “Viettel’s profits actually reduced by VND3 trillion ($130 million) in 2019, and VND4 trillion ($173.9 million) in 2018. However, thanks to the growth of 10 per cent of its subsidiary, Viettel Global, in eight out of nine countries, the brand value of Viettel is still strong,” he said.

According to Bao, the total revenue of Viettel Global increased by VND2.3 trillion ($100 million), bringing the profit of VND2.15 trillion ($93.5 million) in 2019 while it lost in the previous year. “The price of Viettel Global’s shares doubled in 2019, and its current value is $3.45 billion,” Bao said.

In fact, there were only 36 telecoms brands in this year’s list, 80 per cent of which fell in value. The combined value of the telecom brands in the Brand Finance Global 500 stalled, at $558.4 billion in 2020, compared with $567.7 billion in 2015, while all other key sectors recorded significant increases. Revenues of major telecom companies are being affected by a reduction in use of over-the-top messaging apps and short message services, as well as price competition.

Therefore, said Bao, Viettel’s rise should be a source of pride for the company. “Vietnam ranks sixth and third regarding economy and population in the Southeast Asian region, but Viettel has surpassed all the opposition from Thailand, the Philippines, Malaysia, Singapore, and even Indonesia, whose population is nearly three times higher and which boasts an economy more than four times larger than Vietnam’s,” he said. “Even StarHUB and Singtel, two famous Singapore telecom companies, have been overtaken by Viettel in the last two years.”

According to Bao, Viettel has left telecom companies from around the world in their wake. The group has even managed to outperform companies from Russia, Brazil, Indonesia, and India, whose economies are up to 11 times larger than Vietnam’s.

“Viettel Global’s growth, particularly of Mytel in Myanmar, the world’s last telecommunication market with highest potential, will greatly contribute to Viettel’s growth in the future,” Bao added.

Bao compared Viettel with the two other prominent Vietnamese telecoms groups – Vinaphone and MobiFone. “Although the two operators are older, Viettel has more customers and its annual profit is bigger, so therefore its firm value is also bigger.”

Meanwhile, in its Vietnam 50 2019 report, Brand Finance listed Viettel at the very top, thanks to a value of over $4.3 billion, up 20 per cent, equivalent to more than $1.5 billion, compared to 2018.