As reported recently in the media, Viettel, a Vietnamese mobile operator has announced plans to set up operations in Kenya just weeks after it launched in Mozambique.
Viettel Group is a Vietnamese major mobile network operator headquartered in Hanoi, Vietnam. It is a state-owned enterprise wholly owned and operated by the Ministry of Defence. Operated in 2004 as a GSM launcher, Viettel Mobile is the fourth network in Vietnam (after Mobifone, Vinaphone and S-Fone) and currently the biggest telecommunications provider, contributing 40.37% to the total mobile communication market ( followed by MobiFone (27.95%) and Vinaphone (22.98%)and 3% of S-Fone).
Viettel is targeting the African market because the continent has exceptionally huge potential, Viettel Global’s General Director Mr Nguyen Duy Tho says.
In an interview, Mr Nguyen Duy Tho told ‘Daily News’ that the average broadband density in the Sub-Saharan Africa is very low, accounting for 2 per cent in urban areas and nearly 1 per cent in rural areas. “The mobile coverage area only reaches 60 per cent of the African population on average and mainly the urban areas. Only 20 per cent of the African people living in rural areas have access to the mobile signal coverage. Africa is a huge potential market,” he said.
He noted that apart from South Africa owning 80 per cent of the fibre optical cable system, the Sub-Saharan countries have the average density of 140km of fibre optical cable per one million people, which is one seventh of the global density level. Viettel, he said, has invested in six nations including Cambodia and Laos in Asia, Haiti and Peru in America, and Mozambique in Africa.
He said that in the countries that Viettel has started its operations for more than two years, their companies have ranked first in telecommunications, contributing 1 per cent to 2 per cent to the local country’s total GDP; building 50 per cent to 80 per cent of the telecommunications infrastructure of the countries that they have invested in, helping raise the infrastructural density by 3 to 3.5 times higher than the average telecommunications level in the world.
He said that most of the countries that Viettel is perusing investment opportunities are developing markets, in terms of their economies and telecommunications. “This is the advantage of Viettel when we enter the market. Viettel has been the smallest investor among international telecommunications investors, but we have grown up from a developing market, so we have had many business experiences in these markets and we know this type of market very well,” he said.
Latest data from the industry regulator, the Communications Commission of Kenya (CCK), shows that Kenya’s mobile penetration was 74.0 per cent up as at March 2012.
The CCK data shows that mobile subscriptions rose 15.8 per cent to 29.2 million as at March 31, 2012, from the 25.2 million recorded in a similar period last year.
The company, which made about Sh500 billion in revenues in 2011 in May, launched operations in Mozambique — its first mobile network in Africa — under Movitel.
Viettel has been making major investments in data in the markets it operates in.
It is counting on this to penetrate the Kenyan market at a time when voice is losing its shine as the biggest driver of revenues for mobile companies.
For instance, in just over a year since being licensed on January 10, 2011, Viettel has built 12,600km of fibre optic cable and 1,800 mobile stations in Mozambique, representing 70 per cent of Mozambique’s total fibber optic cable network and 50 per cent of the country’s mobile stations.
The operator says it is pursuing investment opportunities mainly in developing markets.