High productivity
According to Ovum, the UK-based market research firm, the average revenue growth rate of the telecommunications industry in the world in 2016 was only 4% while profits downed by 1.6%. It can be seen that the telecommunications sector has shown signs of decline on the global scale and only excellent enterprises always capable of finding new sources could be able to advance.
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The global center of Viettel |
Therefore, that Viettel’s total turnover reached VND 250,800 billion in 2017, an increase of 9.4% compared to 2016, with a total revenue of nearly VND 44,000 billion, increasing by 12%, is a remarkable fact. More noteworthy, these very high revenues were made in the context that in 2017 Viettel was making huge investment in its 4G network and in the largest telecommunications network in Myanmar.
In Vietnam, although the market has been gradually reaching a ceiling, Viettel’s telecommunications sector still saw a growth rate of 6.4% (nearly double the world average figure). Investment in foreign countries increased by 24.4%, six times that of the world average.
In production research, Viettel raked in VND 12,500 billion. Core network equipment manufactured by Viettel has been used by the networks in both Vietnam and Viettel’s international markets, including 300 4G base transceiver stations. In 2017, Viettel made 25 patents, tripling the figure in 2016 and ranking the third among enterprises in Vietnam in this field.
Viettel contributed VND 41,140 billion to the state budget, an increase of 2.3%, or equivalent to the total state budget expenditure for the three sectors of education-training, population-health, and science-technology. Viettel’s labor productivity is valued at VND 3.09 billion per person, up 20% compared to that of 2016. According to the General Statistics Office (Ministry of Planning and Investment), Vietnam’s average labor productivity in 2017 stood at VND 93.2 million per person, up 6% compared with 2016. Thus, a Viettel staff is equal to 33 other laborers.
In the past year, Viettel won the three top positions among Vietnamese enterprises. They are: the most profitable enterprise, enterprise with largest tax payments, and enterprise with the highest brand value (standing at nearly USD 2.6 billion, twice as much as the second highest enterprise). This is also the highest brand value that a Vietnamese brand has reached so far.
Formation of a USD billion defense industry group
July 19, 2017 was a milestone, as the Prime Minister issued Decision No.1059/QD-TTg recognizing the Viettel parent company as a national defense-security enterprise. According to the Government’s Decree No.93/2015/ND-CP issued on October 15, 2015, a “defense-security enterprise is State-owned (which means it must report to the Ministry of National Defense or the Ministry of Public Security), established or organized for the purpose of implementing stable and regular tasks in the sectors, areas and localities directly related to national defense and security or national security and secrets.” That Viettel has been named as a defense-security enterprise shows the recognition and trust of the Party, the State and the Ministry of National Defense for all the activities that Viettel has implemented over the past years. That official recognition serves as a firm foundation for Viettel to shoulder more important responsibilities in the realm of defense and security.
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The global center of Viettel |
Since its early days, Viettel’s leadership has stuck to the view of combining economic development and the national interests in defense, security and social development.
That Viettel has actively participated in and developed hi-tech industry in general and defense industry in particular has shown its role in making direct contribution to enhancing national defense and security. For over six years now, Viettel has successfully researched, manufactured and supplied quality, even prime, hi-tech equipment, according to orders from the Ministry of National Defense, for units to suit the methods of combat and operations of the Vietnam People’s Army, helping the State reduce a considerable amount of import expense. Viettel is coming very close to the goal of researching and producing a number of special strategic weapons, which is of great significance, increasing the pro-activeness in ensuring national defense and security and reducing dependence on import. This cannot be measured by means of money. Viettel has been tasked to build a high-tech defense industry complex with a turnover from research and production of military equipment reaching VND 20,000 billion (approximately USD 1 billion) in 2020.
The national firewall system built by Viettel has been working to keep cyber security for the whole country and information security in the military, serving as a monitoring line to spot any attacks against Vietnam. Viettel’s personnel also join military training and form reserve units, ever-ready to shift to combat state when needed.
Currently, with its potential and activities, it seems that there are three large groups within Viettel, namely the domestic telecommunications and information technology group; the international business and investment group; and the defense industry group. The revenue of each group all reaches up to tens or hundreds of trillion dongs each year. From the example of Viettel, it can be seen that a proper mechanism will help the State budget free from making up for the loss of state-owned enterprises, be they defense-security enterprises or not. The production and business units of Viettel are closely linked, coordinating with and complementing each other to make a unified bigger unit with synergy.
In an economy, every enterprise has its strength and contribution. However, to become the backbone of a country’s economy, an enterprise should make dedication and high responsibility its focal point so as to create national trust. The Military Industry-Telecoms Corporation is steady on its way to becoming such a backbone business.
Translated by Huu Duong