Making a beeline for the mobile market

Boris Nemsic, chief executive officer of VimpelCom - the joint venture’s foreign partner, told how ambitious Beeline’s coverage in Vietnam will be.

Together with six other current mobile operators and 75-80 million mobile subscribers now in Vietnam, are you confident to see room in the local market for the Beeline to grow here?

With more than 86 million people and a fast growing economy, Vietnam is a great market which grows very fast. We think we can offer the Vietnamese market something that it did not have before. Vietnam’s penetration ratio – how many people really have mobile phones, is very difficult to measure, but we are sure that we are here on time and we will grab our market shares within next months of the year. We are here for a long time. With the start of our operations in Vietnam, we are also strengthening our positions in South East Asia.

What market share percentage are you targeting in Vietnam?

For the beginning for this year, the target will be 2-4 per cent because it is already in July. We think a double-digit market share next year will be our right number.

As existing mobile operators like Vinaphone, VMS and Viettel are fiercely competing to offer lower charges, what will you do to make Beeline more competitive?

The customers are very smart and they are looking at more other parameters. Prices alone are just one of them. The parameters must be the brand, the quality and the distribution network. Of course, we will be measured by the big competitors in the Vietnamese market so we think we can catch up with the big competitors very soon.

Actually, VimpelCom is a global company so we can definitely be in the same land with bigger competitors in Vietnam. Price is something which is very important and that’s why we launch an attractive Big Zero rate. This is really a new thing in the Vietnamese market and I am sure that local people will like it.

At the initial stage, Beeline services will be only available in major cities of Hanoi, Danang and Ho Chi Minh City with more than 15 million people altogether. Is it a disadvantage against competing others?

Of course, we are investing further. We have announced that we will come up with 15 per cent of population coverage in the big cities and until the end of the year, our coverage will be more than 40 provinces of Vietnam with the population of 41 million. This is a big move forward and we will be a fair and good competitor in Vietnam.

Should seven mobile operators including GTel Mobile be enough for the Vietnamese market?

It is a quite difficult question. Of course it is upon every country to issue licences as much as they want and it also depends on frequency situation. But to be honest as I am coming from European market - the most advanced in the world, the concern is the infrastructure. There cannot be seven high quality infrastructure networks in the country. Of the high quality, there can be three or four and that’s what we should have at the end of the day. So, it is not so much the issue of how many operators get the licences initially, but it is much more an issue of how many have made substantial development investments in the country.

How much have you spent developing the Beeline infrastructure network?

For this time being, we have contributed $267 million to the development of the joint venture company and this is only the initial development. Of course, we will go further.

GTel Mobile announced to raise investment in the Beeline mobile network to $1.8 billion once it won a 3G licence. Will this commitment remain fresh since the joint venture company has failed to get such a licence?

I think we have to see during a period of time. Our licence for frequencies lasts for 15 years and we have been only a few weeks in operations. In the first year, we will invest in $267 million and we invest a similar number in the next year. So what will be the end of the day, nobody knows because it also depends on the market success.

We can say that we are a really committed investor in Vietnam and we are here to stay and make a real business. I see that the Vietnamese market is not only the market of today but it is also the market of tomorrow, the market of the third and the fourth generations.