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On shaky ground

Released at: 23:13, 05/11/2014

On shaky ground

After originally storming onto the market, the successor to Beeline, Gmobile, now faces an uncertain future.

by Huyen Thanh

After replacing the brand Beeline, Gmobile launched an entirely different marketing strategy. Over the last two years it’s moved away from the “shock” campaigns of the past, instead focusing on acting like its slogan suggests - “Thinking New and Doing New”. The Gtel Mobile JSC, which owns Gmobile, said that their business results have continued to be good without any advertising campaign. 

With two basic characteristics - the colours of yellow and black - Beeline became known for its big advertising campaigns, on TV in particular. When Gtel Mobile, a joint venture between Gtel and the Russian mobile phone service provider Vimpelcom, announced the launch of Beeline in 2009, its Big Zero advertising campaign (which allowed customers to make calls within the network for next to nothing) was something of a phenomenon. Within three months the network had 1 million subscribers. 

Beeline then shocked the market, launching its “Billionaire” package, placing VND1 billion ($50,000) into the accounts of users for intra-network calls over ten years. Its small-sized mobile phones also made an impact on the market, with sales of mini phones and SIM cards reaching into the thousands every day. A month later, however, the package was banned by the Ministry of Information and Communications (MIC), who said it represented “dumping”. Beeline then launched its Billionaire Package 2 in late December 2011, replacing the original. Subscribers who made phone calls or sent texts costing VND1,350 ($0.06) would have VND270,000 ($13) put into their accounts. 

In early 2012, after acquiring Beeline, Gtel Mobile, a 100-per cent State-owned company under the Ministry of Public Security, ranked fifth in the market, with 3 million subscribers, or 3.21 per cent of the market share, with its goal being 5 million by late 2012. But the network failed. At that time, Vietnam’s telecommunications market was seeing a clear separation among the players. With the three giants, Viettel, Vinaphone and MobiFone, seeing stable development and annual revenue in the hundreds of thousands of billions of VND, the three remaining smaller networks, Vietnammobile, Gmobile, and S-Fone), struggled to compete.  

The competitive pressure to survive and develop is heavy for Vietnammobile and Gmobile. Both small networks only have about 10 million subscribers, or 11 per cent of the market share. Bankruptcy or merger with a larger providers can be expected. In the national telecommunications development plan to 2020, approved by the Prime Minister, there is to be only three or four telecommunications groups. The biggest problem for Gmobile relates to frequency, as Gtel must rent VinaPhone’s wavelength in Hanoi and Ho Chi Minh City. Chairman Nguyen Van Du said that the goal of the network in the future is not to compete with the three giants. “But we are at a distinct disadvantage by comparison,” he said. 

Despite its efforts the brand hasn’t developed strongly after announcing revenue growth of 30 per cent for the first six months of 2013 compared to the same period of 2012, and a market share of 3.9 per cent, according to the MIC’s White Book on Information and Technology in 2013. The last two years, Mr Du said, were devoted to network restructuring, putting its marketing budget to other uses. The company focuses on offering low-price packages and launching new retail outlets and customer care centres to attract new subscribers and retain existing subscribers, as well as increasing awareness of its brand identity. When restructuring is completed the company plans to restart its marketing campaigns. For now, the company believes its business results are good given its current strategy. 

Industry insiders say it’s not easy for the smaller providers to compete in prices and packages with the giants in a saturated market. The number of mobile subscribers is predicted to be 115 million by the end of this year, a decline of 5 million over 2013’s figure. Operators need to focus on improving service quality and developing value-added services to increase average revenue per user (ARPU). The increase in charges for 3G in 2013 should contribute to a significant increase in revenues for service providers this year yet may impact on efforts to increase subscriber numbers. Meanwhile, Gmobile may be good in customer care but the quality of its 3G service is lacking. The future of the brand is anything but assured. 

  • TAGS
  • smaller networks
  • Vietnammobile
  • Gmobile
  • S-Fone
  • Vietnammobile.Telecom
  • mobile

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