Viettels Strategy for Subscriber EquipmentsPHAN Nghia Senior Consultant VIETTEL GROUPSeptember, 2010

Viettel Corporation

1

Agenda1Viettel Group

2

Overview of the Value Chain

3

Viettel Strategy

4

ConclusionViettel Group 2

OVERVIEW OF VIETTEL GROUP

Vi Nt v Viettel (1/2) Lnh vc hot ng: Vin thng Bt ng sn Ti chnhGROWTH CHART OF REVENUE Doanh thu

$US million3,300.0

3,500.0 3,000.0 2,500.0 2,000.0 1,500.0 1,000.0 500.0 2004 2005 2006 2007 2008 20091,018.8 443.8 93.3 156.3 2,000.0

Phm vi kinh doanh: Vit nam, Lo, Campuchia; D kin: Myanmar, Bangladesh, Mozambique, Haiti, Cuba, Venezuela.

Mc tiu: 150 triu thu bao ton cu vonm 2015.2000 Ti sn Doanh thu Nhn s 200 ngn USD 3 triu USD 120 ngi 2009 Hn 1 t USD 3.5 t USD Hn 20 ngn ngi

35 000 000 30 000 000 25 000 000

Viettel's Subcribers ti Vit Nam Pht trin thu bao over the years29 000 000

20 000 00015 000 000 10 000 000 5 000 000 107 000 1 765 586

14 194 159

4 344 588

2004

2005

2006

2007

2008

Vi Nt v Viettel (2/2)Tng thu bao 2G/3G (v triu) Pht trin thu bao 3G nm 2010

Th phn di ng ti Vit NamMobifone 29% VinaPhon e 24% EVN Mobile Sfone 1% 5% HT mobile 0%

Viettel 41%

Khai thc li th v mng li: Hin c khong 40 triu thu bao, 22.000 trm 2G, 8.500 trm 3G; S lng thu bao trn ton th gii nm 2015 s l 150 triu.

V Th Trong Nc v Quc T Frost & Sullivan: Nh iu hnh di ng tt nht ticc nc ang pht trin nm 2008 2009.

UNDP: Top 10 doanh nghip ln nht Vit Nam2009.

Wireless Intelligence: Nh iu hnh vinthng ng th 36/746 th gii v thu bao di ng, 2009;

World Communication Awards 2009: Nhcung cp dch v vin thng tt nht cc th trng ang pht trin.

nh Hng Chin Lc

Mng li i trc, kinh doanh theo sau;Phc v i b phn khch hng vi gi cc r nht, mng ph sng rng nht v cht lng cao nht; Chuyn t pht trin chiu rng (th phn, thu bao) sang pht trin chiu su (tng APRU bng cc dch v mi); Gn kinh doanh vi cc chnh sch x hi; Tm kin cc th trng tim nng nc ngoi; Khng nh v th trong lnh vc nghin cu, thit k, sn xut thit b trong nhng nm ti.

OVERVIEW OF THE TELECOM VALUE CHAIN

Value Stack

Source: VM

Viettel Group 9

Value Split & Players

Source: VM

Viettel Group10

Others Players Are Moving to Capture Value

Source: VM

Viettel Group11

Value Creation: When and Where?

Source: VM

Viettel Group12

VIETTELS STRATEGY FOR SUBSCRIBER EQUIPMENTS

Moving Beyond the Boundaries.

V I E T T E L

Viettel Group14

Viettel is Moving on Deviceas OEM

R&D CENTER

To Secure and Optimise the Value Pipe: Upstream and Downstream

Viettel Group15

L Do Viettel u T vo NCPT

nh hng ca Chnh ph: thc y cng nghip CNTT.Nhu cu kinh doanh: lm ch qu trnh nghin cu, thit k chuyn bit ha snphm.

u th v c hi: Th trng rng ln; Hiu bit v khch hng; Mng li phn phi rng khp; Lc lng lao ng tr c nng lc, tm huyt; Lin doanh i tt n u. u i ca Chnh ph.

Viettel R&D Center: A Different OEM

UNLIKE

Global Reach = No Focus on Customisation

Focus on big volume and cheap handset

R&D CENTER

Design its own brand, its own equipments and software, greatly and finely customized to specific segments of its own markets (domestic and foreign)Viettel Group17

Viettel R&D Center: Market Opportunity

Vietnam Electronics Market Growth Rate: 13%/year Subscriber Equipments: 2-2.5B$ Infrastructure Equipments: 1.5-2B$

Viettel Mobile Network Coverage 2009: 90M people 2015: 500M people

Viettel R&D CenterActivities: Established in January 2010 Research, Design and Manufacture of subscriber equipments and basic network equipments. Started with 50+ staffsTarget: Turnover: 1B$ in 2015 Human resources: 1000 staffs in 2015 (90% engineers), including experienced professionals who previously worked at Nokia, Samsung, LG, Motorola ... Establish oversea R&D Center of Excellence Be the Leading Design Company in Viet-Nam and South-East Asia regionViettel Group19

Viettel R&D Center: Strategy

Strategy aims at highly specialized market segments: - Address Markets with un-satisfied demands - Design products for niche markets, highly customized products, products suitable with Vietnam's culture. - Adapt quickly to the needs and fluctuation of market Market target:2010 - 2012 Since 2013

Based on the strength of Viettel Viettel's market account for 90%

Develop markets outside Viettel Outside market no less than 30%Viettel Group20

nh Hng Sn Phm Giai on 2010 - 2012: Tp trung vo cc thit b u cui;

Tng bc pht trin cc thit b h tng mng.

Giai on t 2013: Thit b u cui vi cc tnh nng chuyn bit, thng minh; Thit b h tng mng c phc tp cao, h iu hnh nhng, middleware.

u Ra NCPT Thit k mch tch hp: s nguyn l, s mch in t,thit k mch in, s b tr linh kin trn mch in;

Thit k vi mch, thit k chip (Chip Design);Pht trin phn mm: m ngun cc phn mm nhng (drivers,firmware, middleware, application flatform), h iu hnh nhng, phn mm ng dng, cc tin ch;

Cc cng ngh gc: cng ngh thng tin di ng, truyn thngkhng dy, nh tuyn v chuyn mch gi, thit k vi mch;

Thit k kiu dng cng nghip, thit k cc kt cu c kh:cc bn v 2D/3D, qui trnh lp rp cc kt cu c kh;

Qui trnh kim chun (test) thit k, cc bi test, cc ch tiu test.

Viettel R&D Center: Achievements

Achievements In 2010: USB 3G has been successfully designed and ramping up in mass production .

Expectation in 2011: Continue in designing 4-6 new products successfully Mass production and bring 2-4 products to market.

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OPPORTUNITY

Opportunity to Join the Challenge

Major Mobile Operator Growing through Vertical Integration 90% of the Value Chain Leverage on fast growing subscriber base External growth: Haiti, Mozambia,and more to come Excellent knowledge of its customers Leading OEM in Asia with worldwide Center of Excellence

Pioneer in consumer electronics R&D in Viet-NamDetermination and Excellence in Execution Made in VietNam25

Thank you!!!

Viettel Group26