Number of Customers Using 3G After 5 Months of Deployment

and other provinces, and at the same time create a habit for customers to use the service when they have created a network of many relatives using Mobifone's service for a long time of promotion. After the promotion program of calling 10 for 1 ends, customers still have a good impression of the Mobifone network and under the influence of other promotional programs for active subscribers, they will continue to use Mobifone's service.

Another example of the impact of maintaining subscribers is the form of giving money to listen to calls. Starting in 2007, networks have been bustling with programs to give money to customers when receiving calls at a rate of 80-160 VND/minute. Mobifone also launched the program "The value of listening" stronger than Viettel. Accordingly, any customer using Mobifone's service when receiving a call from another subscriber, regardless of mobile or landline, domestic or foreign, will receive money in their account or deducted from their monthly usage fee of 160 VND/minute for domestic networks and 80 VND/minute for inter-networks. At that time, businesses thought that when customers receive calls, it would not increase their revenue, but in fact, telecommunications businesses still shared the connection revenue from the outgoing business. This policy is recognized by Mobifone as being very effective in retaining old subscribers, creating a loyal subscriber base and strongly attracting new subscribers. According to calculations, with this policy, the service provider will share about 20-30% of its connection revenue with customers and help customers reduce 8-10% of the cost of using mobile information services. 31

Maintaining current customers is the foundation for building a loyal customer base, an important factor in brand building, one of the next positive impacts of promotions on Mobifone.

1.2. Increase revenue

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With the above subscriber growth rate, Mobifone also recorded impressive revenue growth. In 2007, Mobifone achieved production and business results

31 Thai Khang (May 25, 2009), “ Competition to abandon the incentive of giving money to listen to calls” , http://www.ictnews.vn/Home/vien- thong/Dua-nhau-bo-uu-dai-tang-tien-nghe-cuoc-goi/2009/05/1VCMS518459/View.htm, March 22, 2010.

With nearly 6.5 million new subscribers, revenue reached 13,485 billion VND, budget contribution was 2,600 billion VND, exceeding the plan by 2.9%. In 2008, Mobifone achieved the best results in its 15-year history of operation, revenue reached over 17,500 billion VND, exceeding the 2007 plan of 16,000 billion VND, profit reached nearly 6,000 billion, profit ratio on revenue in 2008 reached 35%, budget contribution was 3,500 billion VND. 32 Thus, the state budget contribution also increased by 50% each year, along with the growth momentum of the whole industry, Mobifone's revenue always maintained an increase of 35%/year. By 2009, the year recorded many successes and proud developments of Mobifone. Revenue generated in 2009 increased by 52% compared to 2008, reaching approximately 29,000 billion VND, accounting for 34.85% of the total revenue of the Posts and Telecommunications Group, accounting for 41.45% of the total profit of the Group, and contributing nearly 5,000 billion VND to the state budget. 33

The above figures demonstrate Mobifone's spectacular revenue growth over the years, thanks to tens of millions of subscribers. However, having a large market share does not necessarily reflect business development. As mentioned in Chapter I, when evaluating the revenue and profit of a mobile service provider, it is necessary to consider the ARPU index - the average revenue per subscriber/month. In theory, the higher this index is, the more profit each subscriber brings to the mobile network. Thus, the revenue increase commensurate with or higher than the number of subscribers truly demonstrates the success of a provider. In fact, virtual subscribers do not generate fees, and therefore do not generate revenue for the business, and even cause large costs. Therefore, if these virtual subscribers are included, the average revenue per subscriber, that is, the ARPU figure, will certainly be low.

In a recent survey by the Department of Telecommunications (Ministry of Information and Communications), Mobifone is currently considered the telecommunications network operator with the highest ARPU index.

32 Thanh Ngoc (January 8, 2009), “Mobifone determined to equitize in 2009” , http://dantri.com.vn/c76/s76- 302154/mobifone-quyet-tam-cph-trong-nam-2009.htm, March 1, 2010.

33 VNPT (February 26, 2010), “Mobifone: In 2010, will continue to score quality points” , http://www.vnpt.com.vn/vi-VN/Tin-tuc/Su-kien/Mobifone-Nam-2010-se-tiep-tuc-%E2%80%9Cghi-diem%E2%80%9D-chat-luong.html , March 1, 2010 .

with 10 USD/subscriber, followed by Vinaphone with about 8 USD. In addition, the ARPU index of Sfone network is currently 5 USD/subscriber, while EVN Telecom, Vietnamobile, GTel are not included in the ranking. According to the analysis of some telecommunications experts, the ARPU of the networks cannot be equal to Mobifone. Mobifone is one of the networks with a large growth rate, with a wide coverage area nationwide. However, the majority of users are still concentrated in cities and central areas, and Mobifone is considered the "Mobile network of the rich" and is trusted and chosen by high-income people. Therefore, the revenue from this segment is very large. According to Mobifone's summary, only 20% of the network's subscribers are postpaid subscribers, but this number of subscribers contributes to 80% of the network's total revenue. This can clearly explain why, on average per subscriber, Mobifone's ARPU index is ranked number 1. The correspondence between revenue growth and the number of subscribers as well as the quality of the service, including reasonable and appropriate promotional policies, is the reason why Mobifone has become one of the most developed mobile networks in Vietnam.

Mobifone's telecommunications revenue increased, including revenue from sim card sales, new network connection revenue, and revenue from active subscribers (including voice revenue, text messages, value-added services, etc.). However, in the recent past, telecommunications businesses have made strong moves to reduce fees to attract customers, and this move is expected to continue in the future. This reality leads to a slowdown in revenue from voice and text services. Businesses must certainly expect the remaining revenue sources, which are value-added services.

At Mobifone, in recent years, the proportion of value-added service revenue in total network revenue has continuously increased. Value-added services are one of the most attractive promotional contents of Mobifone for customers, this is also the mobile network with the most abundant and diverse value-added services. It can be said that with the form of giving away fees and reducing fees for using value-added services, Mobifone has created conditions for customers to access a convenient store.

This is a very rich benefit. Thereby, the proportion of revenue from value-added services contributing to revenue per subscriber tends to increase. In 2008, the proportion of revenue from value-added services contributing to total revenue reached 18%, but by 2009, this proportion had reached ¼ of Mobifone's total revenue, reaching approximately

7,200 billion VND. 34 This is a very rapid development step and it also confirms the market trend, when the demand for voice services is slowing down, and the demand for value-added services is increasing sharply. If Mobifone knows how to use experience and has good policies to develop value-added services, this contribution rate can increase to over 30% of the total network revenue.

Figure 1: Number of customers using 3G after 5 months of implementation

(Source: ICT News 35 )

34 Thuy Nguyen (October 30, 2009), “Mobifone increases revenue strongly thanks to value-added services ”, http://www6.vnmedia.vn/newsdetail.asp?NewsId=178425&CatId=35, March 1, 2010.

35 Duc Thien (February 28, 2010), “After 5 months of 3G deployment: 14 million users” , http://nhipsongso.tuoitre.vn/Index.aspx?ArticleID=365692&ChannelID=16, March 1, 2010.

In 2009, Mobifone launched many new value-added services, especially the launch of 3G technology in early 2010. In March 2010, after 5 months of 3G technology deployment, the total number of customers using the service reached 14 million people, of which Mobifone deployed the service from mid-December 2009, recorded 6 million users. This is the result of advertising campaigns, attractive promotional programs to popularize 3G to customers . This is only the initial figure, certainly the revenue from 3G services in particular and other value-added services in general will increase and contribute more to Mobifone's total network telecommunications revenue. In general, the impressive figures above show that, despite the difficulties of the economic crisis in 2008, 2009 along with fierce competition in the industry, Mobifone still maintained high growth in its mobile service business. This growth cannot be denied the role of effective promotional policies that planners have been applying. However, besides material benefits, promotions also bring other intangible benefits.

has long-term significance for Mobifone.

1.3. Brand building

According to an independent brand research conducted by TNS Market Research in late 2009, Mobifone is the number 1 mobile network among 7 mobile networks in Vietnam in terms of awareness, popularity and desire to use. In terms of awareness, MobiFone scored 100%, Viettel and Vinaphone with 99%, S-Fone with 84%, Beeline with 76%, Vietnamobile with 63% and EVN Telecom with 59%. In terms of popularity, MobiFone leads with 54%, Viettel with 29% and Vinaphone with only 14%. In terms of demand for use, MobiFone still leads the poll with 56%, Viettel with 44% and Vinaphone with 25%. 36

36 Thanh Phuong (March 8, 2010), “Mobifone ranked number 1 in terms of preference and desire to use” , http://www.ictnews.vn/Home/vien-thong/MobiFone-xep-so-1-ve-muc-do-ua-thich-va-mong-muon-su- dung/2010/03/1MSVC525447/View.htm, April 4, 2010.

In a competitive market like the telecommunications market in Vietnam, brand strength can be said to be the most important factor helping suppliers gain a solid position and trust from customers. The success in building a brand is not simply the growth in revenue and profit but also the influence of that brand in the minds of customers. When choosing a mobile telecommunications brand, if the supplier's brand is the first name that consumers think of and choose, then the business has truly succeeded in building its brand. This is the invisible benefit that promotional tools can bring to telecommunications businesses today, in addition to economic benefits. Speaking of Mobifone, the brand success that promotional forms bring is viewed in two aspects: competing by service quality and customer care.

With numerous awards in recent years, service quality is an indisputable factor for Mobifone mobile network. Mobifone's most notable achievements are the awards " Best quality mobile network in 2007, 2008 " and " Best mobile network in 2008 " presented by the Ministry of Information and Communications. At Mobifone, despite applying many and often different forms of promotions, the issue of service quality is still put first. As a business under a State Corporation, Mobifone is quite controlled in terms of price. Instead, Mobifone focuses on improving service quality. Every year, the Department of Information and Communications Technology Quality Management under the Ministry of Information and Communications organizes an assessment of the quality of mobile networks, mainly based on industry standards. Most businesses and authorities rated the measurement criteria as too high, so it was impossible to achieve these criteria. The Post and Telecommunications Group also affirmed that it was impossible to exceed 3 points in voice quality. However, the measurement results showed that the quality of Mobifone's mobile network had far exceeded the industry's criteria. In important categories, the highest criteria belonged to Mobifone.

 Regarding voice quality: Mobifone achieved the highest score with 3.576, reaching the same quality score as a landline phone, which no other mobile network in Vietnam has achieved; Vinaphone achieved 3.52 points and Viettel 3.47 points.

 Regarding the target of successful calls to Call Center within 60 seconds: Mobifone achieved 98.82%, Vinaphone achieved 98.82% and Viettel achieved 96.08%.

 Regarding the call setup success rate, all 3 networks have almost reached the maximum possible level of a mobile network: Vinaphone 99.63%; Viettel 99.08%; Mobifone 98.97%. 37.

This is the measurement result in 2007, Mobifone network alone has achieved the quality of fixed-line telephone calls for 3 consecutive years, and at the measurement point in this extremely important indicator, it has always been at the top among all mobile networks in Vietnam. Although the quality results in the categories have not increased as dramatically as in previous years, according to Mobifone's leaders, most of the indicators that this network has achieved are almost at the highest level, so it is difficult to exceed them any further.

During the recent Canh Dan New Year, despite running many major promotional programs at the same time, Mobifone's network still ensured complete continuity, especially on New Year's Eve, at major locations such as Hoan Kiem Lake - a hotspot for annual network congestion, all Mobifone customers could make calls and send messages smoothly. This is also the advantage of Mobifone's free domestic call program, when customers increase domestic calls, network congestion problems are almost non-existent because Mobifone has previously upgraded and expanded network capacity. This not only helps ensure investment efficiency but also increases benefits for customers.

Regarding customer care, the Mobifone brand is always associated with the phrase, "The best customer care mobile network" with the most professional style among mobile networks, leaving customers with many good impressions of dedication,

37 Thuy Nguyen (June 23, 2009), “Mobile, Mobifone leads, Viettel drops in rank” , http://www6.vnmedia.vn/newsdetail.asp?NewsId=167571&Catid=35, March 1, 2010.

attentive. In Vietnam, since the customer care awards for mobile networks were established, Mobifone is the first and only enterprise to win all the highest customer care awards at all awards organized by different units.

In designing packages and promotional programs to take care of customers, Mobifone always tries to bring special meanings to the rewards and incentives that this mobile network brings to customers. To ensure the most comprehensive service for all customer groups, Mobifone has designed packages to serve many specific groups. Mobi465 is a package that aims to popularize high-quality mobile information services to rural areas. With this package, Mobifone has created a new turning point in serving customers with low incomes but always need to ensure long-term communication. Similarly, the Qteen package is designed specifically for the 15 to 18 year old age group, accompanied by many interesting promotions. 38 After launching this package, Mobifone became a pioneer mobile network in bringing benefits to young customers. The Qteen package also won the award for the best package of 2009 voted by the Vietnam Post Newspaper. In addition, Mobifone also regularly conducts marketing activities for its brand at major programs such as: International Exhibition of Information Technology - Telecommunications 2008, Mobifone summer on the sea, sponsoring major annual festivals nationwide. The slogan: "Mobifone - anytime, anywhere" has become familiar and close to customers.

In customer care activities, Mobifone has designed many programs for loyal customers, especially the pioneer network in postpaid customer care, as mentioned in the previous part of the Thesis. It can be said that these care programs bring great brand effectiveness to Mobifone. Considered as "Mobile network for the rich", those who really value quality

38 Mobifone website: www.mobifone.com.vn

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