Telecom giant's subsidiary Telemor leads the island's market and makes phones more affordable.
After opening in July 2013, Telemor, a telecom subsidiary of Viettel in East Timor, began earning a profit and was ranked No. 1 in the country within six months and has held the position ever since.
Before Viettel arrived in East Timor the country’s telecommunications sector was monopolized by Timor Telecom, a Portuguese company, for more than ten years.
When Telemor officially began to provide mobile services in the country in July 2013 the story began to change. After only a year Telemor was No. 1 in the telecommunications market, covering 96 per cent of the population with 2,500 sales points.
As at September 2015 the number of subscribers to Telemor had reached 450,000 people, accounting for 47 per cent of the market. According to Mr. Nguyen Canh Hoa, General Director of Viettel in East Timor, different business strategies in a small and monopolized market with poor infrastructure were important factors in Telemor’s rapid growth.
He noted four important factors in Viettel’s business strategy on the island.
First, it determined that mobile telecommunications services are to be for everyone, not just for the wealthy and middle-class, as was previously the case. Telemor offers cheaper telecom charges and also donated free SIM cards to students, teachers, police and others.
Secondly, in infrastructure, Telemor covers both 2G and 3G networks, ensuring good service quality. Previously the island only had a 3G network in urban areas.
Thirdly, Viettel provides mobile phones at a cheap price. Because East Timor is a small island with a population of only 1.2 million people, mobile phone companies had not appeared. Just a small number of mobile phones were imported but at a high price. Meanwhile, Telemor imported mobile phones in large volumes, so the price was cheaper, at just $15 to $20 for a mobile phone with 2G and $50 to $80 for one with 3G.
Fourthly, costs on investment and operations were cut as much as possible. For example, when building transmission stations in mountainous areas, Telemor employed local people and used its construction experience from the mountains in Vietnam. Meanwhile, other investors hired helicopters to bring in materials, pushing up the cost.
With such measures, Telemor created a wave on the island and picked up more than 200,000 customers. Earning a profit after six months has never been done in other markets where Viettel has invested.