Practice your business strategy skills as you consider the Viettel or FPT Telecom in

foreign coutries case. Then share your group analytical insights into these questions:
1. Why would M&A be a viable strategy for expansion in the telecom industry? Why go
outside one's home-country borders?
2. Should Viettel or FPT proceed with the acquisition (M&A)? Why or why not?

Viettel Telecom
1. Mergers and acquisitions (M&A) have the potential to serve as a viable strategy for
expansion within the telecommunications industry, enabling operators to achieve
advantages in terms of scale, efficiency, and diversification. Through the acquisition or
merging with other telecom entities, operators are capable of augmenting their market
share, customer base, and network coverage, while simultaneously reducing costs, risks,
and competition. Moreover, mergers and acquisitions can provide operators with
opportunities to access new technologies, capabilities, and sources of revenue, such as
digital services, infrastructure assets, and content platforms. The exploration of growth
opportunities in emerging or underpenetrated markets beyond one's own country can
be pursued as a means of expansion, given the high demand for mobile and broadband
services in these regions. Moreover, venturing beyond domestic borders can function as
a strategy to mitigate challenges and uncertainties within the domestic market, such as
saturation, regulation, and competition. In line with this, Viettel has effectively
expanded its presence across 11 countries located in Asia, Africa, and Latin America.
This expansion has been made possible by leveraging its innovative and cost-effective
business model to cater to millions of customers.
2. Based on the information we have, the M&A strategy for Viettel Telecom company is
completely feasible. However, this M&A strategy also has many advantages and
disadvantages.
Arguments in favor of the M&A strategy employed by Viettel Telecom can be outlined as
follows: Firstly, Viettel Telecom holds a prominent position as a telecom operator in
Vietnam, generating a revenue of nearly $11 billion in 2015, which represents a notable
increase of 21% compared to the previous year. In addition, the company possesses a
strong domestic market share and exhibits a robust financial standing, enabling it to
confidently expand its operations on a global scale.
Moreover, Viettel Telecom has already accomplished successful entry into nine foreign
markets, including Myanmar, Laos, Cambodia, Timor-Leste, Peru, Mozambique,
Cameroon, Burundi, and Tanzania. The company has achieved an average annual growth
rate of 30% in its international endeavors, resulting in a revenue of $1.5 billion in 2015.
Furthermore, Viettel Telecom has actively contributed to the development of the
telecommunications sector and the social welfare of these countries by providing
affordable and accessible services, creating employment opportunities, and supporting
educational and healthcare initiatives.
Viettel Telecom's ultimate objective is to emerge as a prominent global
telecommunications group, with the vision of universalizing telecom services and
bridging development gaps. The company intends to invest in markets that exhibit
potential, with a particular focus on emerging nations, characterized by low penetration
rates, abundant resources, and high demand. Moreover, Viettel Telecom seeks to
diversify its portfolio and enhance its competitive advantage by introducing new
services and products, including research and development, devices, and digital
solutions.
One of the key advantages of Viettel Telecom's M&A strategy lies in its ability to expedite
and simplify market entry into new territories. Rather than constructing its own
network from scratch, the company can acquire existing local telecom operators or
licenses, thereby saving time, capital, and resources. Consequently, Viettel Telecom
gains access to an established customer base, infrastructure, and expertise.
Furthermore, the company can utilize its M&A strategy to strengthen its position in
current markets by acquiring competitors or complementary businesses, ultimately
bolstering market share, revenue, and operational efficiency.
On the other hand, there are several arguments that can be made against Viettel
Telecom's M&A strategy. To begin with, the company encounters significant risks and
challenges when investing in foreign markets, such as political instability, economic
volatility, legal uncertainty, cultural differences, and security threats. Additionally,
Viettel Telecom confronts fierce competition from both global and local telecom
operators who may possess greater experience, resources, or advantages in these
markets.
Another potential drawback of Viettel Telecom's M&A strategy involves the difficulties
and costs associated with integrating the acquired businesses or licenses into its own
operations. This includes aligning strategies, cultures, systems, and processes, as well as
retaining customers, employees, and business partners. Furthermore, the company
could encounter regulatory impediments or resistance from governmental bodies,
stakeholders, or the public, who might view the M&A strategy as a challenge to the
national interests, security, or sovereignty of the host nations.
Furthermore, Viettel Telecom runs the risk of diverting focus and resources away from
its core business and domestic market by pursuing excessive or overly large M&A deals
in foreign markets. This can result in overpayment or overestimation of the value or
potential of the acquired businesses or licenses, leading to financial losses,
impairments, or write-offs. Additionally, the company may inadvertently neglect or fail
to innovate or adapt to changing customer needs, preferences, or behaviors in both
domestic and foreign markets.
In conclusion, Viettel Telecom's M&A strategy has both advantages and disadvantages,
and it should carefully weigh the benefits and costs of each deal, as well as the
opportunities and threats of each market, before making any decision. It should also
monitor and evaluate the performance and impact of its M&A activities, and adjust its
strategy accordingly.