How military discipline aided Viettel’s global rise

In April of 2015 Viettel’s international arm ramped up its capital base by USD 465 million with a view to dramatically expand its international footprint. The Vietnamese mobile phone company plans to double its presence in overseas markets from 8 to 16 in just two years. Having already gained success in its home market with around 50% market share, the Vietnamese operator has expanded abroad in Africa, namely Cameroon, Burundi, Mozambique and now Tanzania, but also in Haiti and Peru.

Targeting markets with low user bases and utilising their experience in expanding coverage successfully to rural areas and by offering dirt cheap prices, the company has gained a reputation for winning contracts against the odds and upsetting traditional players like Vodafone and Bharti Airtel. But some have whispered that it may have received clandestine assistance from its ultimate owners.

Viettel differs in one major way to its peers, as it happens to be owned by the Vietnamese military. In fact this isn’t so unusual in Asia, the Chinese army control many important firms and the North Korean military control large swathes of that ramshackle economy. More generally state owned enterprises are common in China, Vietnam and other nominally Socialist countries across Asia.

Viettel belies the stereotype of state owned firms being inefficient and dependent on subsidies to survive. Viettel (bar its very senior management) operates like a meritocratic private firm with high performers rewarded quickly but with the added ingredient of military discipline within the workforce. This can be a useful attribute in some of its overseas markets where it has been involved in complex logistical operations like laying fibre optic cables in rural areas.

Viettel has also moved into neighbouring markets investing in the struggling Beeline provider in Cambodia. It now has ambitious plans to move into other emerging markets such as Belarus, the DRC and North Korea – clearly unafraid to venture where others fear to tread

There remains the caveat that Viettel’s accounts are private and would only be fully revealed if they went public on the stock exchange, so the company’s use of Vietnamese accounting standards and 18% returns would come under greater scrunity. But for now there are no plans for a stock market float. The Vietnamese government and military will be keen to hold onto a prize asset which is performing on the global stage.



Categories: Company Case Studies, Uncategorized

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