December 16, 2016 5:15 pm JST

Viettel pioneers free roaming in Cambodia, Laos, Vietnam

Vietnam's giant telecom levels call and data charges between three ASEAN neighbors

Nguyen Manh Hung, Viettel's managing director

HO CHI MINH CITY -- Vietnam's state-owned telecom Viettel will eliminate overseas roaming charges between its operators in Vietnam, Laos, and Cambodia from January 2017.

"Users of Metfone in Cambodia, Unitel in Laos and Viettel in Vietnam will be charged at the local mobile fee when they make cross-border calls to each other," said Nguyen Manh Hung, Viettel's managing director, who regards the three countries as an economic and cultural bloc.

Discussions about free roaming services started years ago in Australia, Europe, and New Zealand, but without bearing fruit. Free roaming within the Association of Southeast Asian Nations has also been discussed by regional ministers since 2013.

Viettel has well-established infrastructure in the three countries, and is the first telecom to launch such a service within a regional economic bloc, promising cheaper cross-border rates for calls and data.

In a statement released on Thursday, Viettel said it expected its individual operators to lose some revenue initially with the reduced charges, but provided no figures. The figure could be 2% according to one Europe model in 2013. Viettel expects users to become more active when they travel if they can continue paying domestic rates.

Military-run Viettel posted revenue of $9.7 billion in 2015 with 13% year-on-year growth, and profits up 8% to $2 billion.

As of September 2016, Viettel had 90 million customers, of which 26 million were in nine overseas markets: Burundi, Cambodia, Cameroon, Haiti, Laos, Mozambique, Peru, Tanzania, and Timor Leste. Viettel has targeted 25 countries by 2020.

Cambodia and Laos were Viettel's first foreign ventures, and remain its most profitable. By August, Unitel in Laos had $1 billion in accumulated revenue over seven years and aggregate profit of $300 million. Unitel has a brand value of $132 million, making it one of the 30 most valuable in the region and top in Laos, according to a report by UK-based Brand Finance in April. The company currently has more than 2.5 million customers. It accounts for 47% of Laos's mobile market and 35% of the broadband market.

Metfone in Cambodia has a brand value of $94 million and is the leading mobile service provider in the country with 5.5 million customers and 37% market share. It recorded $256 million in revenue last year.

Viettel already operates in East Timor, and is about to launch in Myanmar with a $1.5 billion commitment and two local partnerships. It is also believed to be negotiating its entry into Indonesia.

Viettel is targeting $1.5 billion in gross revenue from its overseas markets this year, up from $660 million in 2015. This has been driven by expansion of profitable third- and fourth-generation services. Overseas revenues were up 13% year on year in the first half of 2016.

(Nikkei)

Get Insights on Asia In Your Inbox

To read the full story, Subscribe or Log in

Get your first month for $0.99

Redeemable only through the Subscribe button below

Once subscribed, you can…

  • Read all stories with unlimited access (5 articles per month without subscription)
  • Use our smartphone and tablet apps

To read the full story, Subscribe or Log in

3 months for $9
SUBSCRIBE TODAY

Take advantage of this limited offer.
Subscribe now to get unlimited access to all articles.

To read the full story, Update your account

We could not renew your subscription.
You need to update your payment information.

To read the full story, Subscribe or Log in

Once subscribed, you can…

  • Read all stories with unlimited access (5 articles per month without subscription)
  • Use our smartphone and tablet apps

To read the full story, Subscribe or Log in

3 months for $9
SUBSCRIBE TODAY

Take advantage of this limited offer.
Subscribe now to get unlimited access to all articles.

To read the full story, Update your account

We could not renew your subscription.
You need to update your payment information.