Organizational Structure of Vietnam Posts and Telecommunications Group (Parent Company)

Head office: 10th floor OCEAN PARK, No. 1 Dao Duy Anh, Dong Da, Hanoi. Charter capital: (as of January 1, 2006) 36,955,000,000,000

Over the years, the Group has contributed greatly to the development of the Postal Industry. VNPT has developed a nationwide Postal and Telecommunications network and connected to the international Postal and Telecommunications network, with increasingly diverse types of services in the spirit of rapidly modernizing communications towards digitalization. The Postal and Telecommunications Group has boldly attracted foreign investment, directly introduced digital equipment into the Postal and Telecommunications sector, taking international telecommunications as a breakthrough, aiming to bring the level of Vietnam's Postal and Telecommunications to match the level of world Postal and Telecommunications technology, and quickly connect to the international Postal and Telecommunications network.

2. Business lines

VNPT is responsible for conducting business according to the State's planning, plans and policies, including directly carrying out investment, production, business activities or investing in other enterprises in the following industries and fields:

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+ Backbone telecommunication services

+ Telecommunication services - Information technology (IT)

+ Media services; advertising

+ Survey, consult, design, install and maintain telecommunications and IT projects

+ Production, import-export business, supply of telecommunications and IT materials and equipment

+ Financial, credit and banking services

+ Real estate business, office rental

+ Other industries and professions as prescribed by law

3. Organizational structure

3.1. Organizational structure of Vietnam Posts and Telecommunications Group (Parent company)

Vietnam Posts and Telecommunications Group (Parent Company) is a State-owned company invested and established by the State, operating in accordance with the law on State-owned companies.

Figure 2: Organizational structure of Vietnam Posts and Telecommunications Group

(Source: Approval of the project to establish the parent company - Post and Telecommunications Group)

* The Group's management and operation agencies include:

- Board of Directors: Is the agency directly representing the State ownership at the Group and Vietnam Post Corporation and member units with 100% charter capital owned by the Group. The Board of Directors consists of 09 members appointed, dismissed, rewarded and disciplined by the Prime Minister.

- Board of Supervisors: is the body that helps the Board of Directors inspect and supervise the Group's compliance with laws and regulations; the legality, activities of the Group, and decisions of the Board of Directors.

- General Director: legal representative of the Group, managing the daily operations of the Group according to the goals, plans and resolutions and decisions of the Board of Directors. The General Director is a member of the Board of Directors, appointed and dismissed by the Board of Directors after being approved in writing by the Prime Minister.

- In addition, under the General Director there are Deputy General Directors and Chief Accountant.

* Group Office: is a general administrative unit, with the function of serving the Board of Directors in management work, serving the General Director in operation work. The Group Office is a planning unit that opens an account at the Bank and uses a seal under the name "Vietnam Posts and Telecommunications Group Office" for transactions.

* Advisory and executive agencies directly under the General Director: are specialized and professional agencies, authorized by the General Director to directly operate in specific areas within the assigned functions and tasks, collectively called Boards with names associated with the main functions and tasks. The Group consists of 09 Advisory Boards.

* Information and Public Relations Center (PR): is a dependent accounting unit with the function of performing information, propaganda, management and public relations activities of the Group and its member units.

* Research and Development Center (R&D): is a dependent accounting unit with the function of research and development in business strategy, financial investment, technology, and human resources.

* Department of managing and exploiting backbone telecommunications networks: is a dependent accounting unit, with the function of organizing, building, managing, operating, and exploiting inter-provincial and international telecommunications service networks. This department has domestic and international operating areas, organized into Inter-provincial Telecommunication Company (VTN) and International Telecommunication Company (VTI).

3.2. Member companies

Vietnam Posts and Telecommunications Group operates under the parent company model.

- Subsidiaries include as shown in the following figure:

II. Analysis of the Group's internal and business environment

1. Macro environment

1.1. Economic factors

The current state of the economy and future trends affect the success and strategy of a business . 8. Over many periods, economic factors have had different impacts on VNPT's production and business activities.

In 1995, Vietnam Posts and Telecommunications Corporation was established under the model of Corporation 91 on the basis of restructuring the Posts and Telecommunications Corporation under the Ministry of Transport - Post. The period of 1995 - 1996 was a period of many positive changes when the reform thinking was truly transformed into economic policies and put into practice, the economy began to prioritize the development of the non-state economic sector. However, the number of non-state enterprises during this period was still insignificant, so VNPT's competitors were almost non-existent. The economy quickly overcame the difficult period and entered a period of strong development with an average GDP growth rate of 8.2%/year, reaching the highest level in the cycle of 9.5% in 1994, unemployment was only 5.8%. Inflation gradually decreased to single digits. The economic structure has shifted towards increasing the proportion of the industrial and service sectors and decreasing the proportion of the agricultural, forestry and fishery sectors. During this period, the Corporation was transformed into a government-owned corporation, creating favorable conditions for VNPT to expand its production and business activities.

The period of 1997 - 1998 was a difficult period for the Vietnamese economy in general and Vietnamese enterprises in particular due to the impact of the Asian financial and monetary crisis and the severe impact of natural disasters. The GDP growth rate continuously decreased: in 1997 it reached 8.15%; in 1998 it was only 5.83% and in 1999 it was only 4.8%. Inflation also began to increase again: 3.5% in 1997, 3.7% in 1998 and up to 4.5% in 1999. This had a significant impact on the business activities of the Corporation, the slowing economic growth caused the demand of

8 Le Van Tam (2000), Strategic Management Textbook , National Economics University, page 79

The number of people using Postal and Telecommunications services decreased. In the period up to 1999, VNPT did not have any breakthroughs, but only stopped at maintaining and consolidating existing activities.

During the period from 1999 to 2007, the Vietnamese economy began to recover from the crisis in 1999 and grew strongly. GDP increased continuously over the years and reached 8.5% in 2007, inflation remained at a single digit (returning to double digits in 2007). State-owned enterprises were equitized step by step at a rapid pace. The private economic sector and foreign-invested enterprises also developed strongly, contributing positively to economic development, especially enterprises operating in the industrial sector, contributing to improving the quality and competitiveness of domestic products, creating a driving force forcing VNPT to make changes in the way it operates, eliminating the inherent stagnation of State agencies, and officially establishing the Vietnam Posts and Telecommunications Group in 2006.

From 2008 to now, Vietnam's economy has encountered many difficulties due to the impact of the global economic crisis. The weakening of the world financial market and the recession of the US economy have spread, affecting the economies of all countries, including Vietnam. In 2008, the development of the domestic economy has greatly affected people's consumption levels, affecting the production and business activities of industries and enterprises. Vietnam has had to face and go through two target changes with appropriate groups of solutions. Inflation during this period increased (average consumer price in 2008 compared to 2007 increased by 22.97%). Interest rates are still high, making it difficult for businesses to access capital. Gross domestic product (GDP) increased by 6.23% compared to 2007, although lower than the growth rate of 8.48% in 2007 and the adjusted plan target of 7%, but in the context of the global financial crisis and economic conditions in many countries declining, this was a great effort. It can be said that this period is a difficult time for businesses in general and VNPT in particular.

1.2. Political and legal factors

Since 1990, Vietnam has had many significant policy changes, bringing many new opportunities for Vietnamese enterprises in general and VNPT in particular. Since the beginning of Doi Moi in 1986, the subsidized bureaucratic mechanism has been gradually eliminated, people's lives have gradually stabilized. Laws have been issued one after another: the Law on Private Enterprises and the Law on Companies in 1991, the Law on Enterprises in 2000 and amended in 2005... helping enterprises of all economic sectors operate more clearly and quickly.

Particularly in the field of Posts, Telecommunications and Information Technology, the system of legal documents and related policies has been gradually promulgated and perfected to suit actual conditions and international practices. After more than 10 years of developing the Internet market in Vietnam, according to the assessment of telecommunications experts, Vietnam has made great strides in reforming the legal framework for the Posts, Telecommunications and Internet sectors. In 2002, the Postal and Telecommunications Ordinance was issued, which greatly changed the business environment of enterprises. According to the Ordinance, the State's policy is to encourage and create conditions for economic sectors to participate in the Postal and Telecommunications business in a fair and transparent competitive environment managed by the State with a full range of services, ensuring quality and reasonable prices. At the same time, expand international cooperation in Post and Telecommunications on the basis of respect for independence, sovereignty, equality, mutual benefit, in accordance with Vietnamese law and international conventions that Vietnam has signed or joined... With these policies, the telecommunications service business environment in Vietnam will become more and more vibrant with the participation of many economic sectors both domestically and internationally. Especially for the two most successful services in the history of the telecommunications industry, mobile and Internet, competition will be fierce because the demand and trend of using these two services are increasing. This is a big challenge for VNPT. In addition, the postal and delivery sector continues to be facilitated for development. The promulgation of new legal documents has created a

The synchronous legal framework for delivery activities in Vietnam, creating favorable conditions and actively supporting delivery services, contributing to improving the service quality of enterprises. In addition, the newly issued Decree 9/2009/NDCP of the Government stipulates that state-owned enterprises must use at least 70% of total investment capital in enterprises operating in the fields of the company's main business lines, also creating difficulties for VNPT in arranging and reviewing investment and business fields effectively and selectively, especially in the context of the increasingly widespread global financial crisis.

1.3. Technological factors

As a business operating in the field of Post - Telecommunications - Information Technology, technological factors have a great influence on VNPT.

During the process of building and developing the country, Vietnam's science and technology infrastructure has had positive changes. Information technology is one of the fastest growing sectors in recent years. According to a recent report by the World Economic Forum, Vietnam's information technology sector rose nine places in 2007-2008, ranking 73rd out of 127 countries. Official information also shows that the State is giving a lot of priority to the information technology sector.

However, the level of science and technology in our country is still considered low compared to other countries in the region. Vietnam is still considered a technological waste dump. Technologies imported to Vietnam are considered outdated and backward compared to the world. According to the assessment of many foreign organizations, the rate of high technology use in Vietnam is low (about 20%); at this time, the Philippines has reached 29%, Malaysia is 51% and Singapore is up to 73%. The Economic Intelligence Unit (EIU) said that Vietnam's e-readiness index ranked 61st out of 65 analyzed countries, 30 places lower than Malaysia and 54 places lower than Singapore. This is a big difficulty for Vietnamese enterprises in general and VNPT in particular.

In short, Post - Telecommunications - Information Technology are the fields with the fastest technological changes. VNPT has the advantage of large capital, so it needs to plan

Plan available capital to invest in research, development or purchase of new technological inventions, improve, upgrade and promptly apply new technologies to always stay ahead of competitors.

1.4. Cultural and social factors

After more than 20 years of renovation, Vietnam's cultural and social situation has increasingly changed positively.

Along with the changes in the economy, the problem of employment and unemployment has also been gradually resolved. If in 1989, the unemployment rate in our country was still at 13%, then in 1994 and 2007, unemployment dropped to only 4.2%. In particular, the number of workers in the Postal - Telecommunications - Information Technology sector, although not high, is increasing. Although from 2008 to now, due to the impact of the global economic and financial crisis, Vietnam's unemployment rate is showing signs of increasing again (in 2008 it increased to 4.6%), the demand for labor in the Telecommunications - Information Technology sector has not decreased. In Ho Chi Minh City alone, each year the city needs to supply an IT workforce of up to 30,000 people and it is forecasted that by 2010 the IT workforce will need more than 91,000 people 9 .

Vietnam's population situation has also changed a lot. The population size has increased from 52.742 million in 1979 to 85.155 million in 2007; the population structure has also changed dramatically, especially the population structure by age group; the proportion of people in working age increased from 51% to 65%. Correspondingly, the proportion of people outside working age decreased from 49% to 35%. The change in population structure by age has had a huge impact on the socio-economic development in our country in both directions: creating opportunities and giving rise to great challenges. Along with the progressive changes in social structure, people's lives have been increasingly improved, and people's consumption habits have also changed significantly. The intellectual level of Vietnamese people has been raised.

9 http://education.hrvietnam.com?m=education&a=news_detail&resource_id=9616&type=1

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