UNDERSTANDING CUSTOMERS’ BEHAVIORS TOWARDS 3G MOBILE BROADBAND VALUE ADDED SERVICES IN VIETNAM MOBILE TELECOM SERVICES COMPANY

Vietnam is in the period of integrating into the world''s economy, as a part of globalization and is in transition from a planned economy to a market-oriented mixed economy under one-party rule. Vietnam has been one of the fastest-growing economies in Asia in recent years, with GDP growth averaging 6.5% annually between 2000 and 2010 and income per capita reached 1,160 USD . The government, in spite of the current macroeconomic woes, continues to move forward with market reforms. In telecommunications industry, the spearhead sector of the economy, Vietnam mobile market continues to grow strongly, with the sales of 2009 reaching 4.032,5 million USD seizing 59% the sales of the whole telecommunications industry. Vietnam has also been busy opening up the market to new players, importantly including some with no involvement of the state-owned corporations. According to the latest data published by the Ministry of Information and Communications (MIC), it’s said to be 98 million mobile users in the country by the end of 2009 from only 5 millions in 2004 . Currently, Vietnam mobile market has high competition with a presence of 7 services operators and in April 2009, the government issued four 3G licenses for five of them: Vinaphone, MobiFone, Viettel and a joint license for Hanoi Telecom and EVN Telecom. And it was a signal to start up the next phase in Vietnam mobile market’s development. The most prominent improvement of 3G technology is to provide high-speed communications and to implement communication services based on multimedia mobile technology. 3G developments are expected to make a breakthrough for digital content services to exploit the value of the future’s technology, bring more and more benefits to customers. Vietnam Mobile Telecom Services Company, the first GMS mobile telephony services company provider in the brand name MobiFone with 17 years of operating, is one of three biggest mobile operators which are dominating Vietnam mobile market. And Vietnam Mobile Telecom Services Company itself couldn’t stand out of the fierce race of launching and exploiting 3G technology which really began from the second half of 2009. However, with a huge amount of capital investment in infrastructure and the fierce competition in the mobile market, 3G technology can be an opportunity, but can also be a challenge for MobiFone, especially in the near future while the second position in the market of MobiFone is threatened. At the moment, MobiFone’s 3G networks now cover most of the nation''s cities with costly investments for setting up the network and deploying services to customers around the country. The total investment MobiFone committed to Post and Telecommunication Ministry is over 5.000 billion VND in 3 years, for the installation of 5.000 stations around the country. After 6 months, a over half of stations as committed have been installed. And the budget for 3G advertising campaign through masses media and events over six months from December 2009 to June 2010 is over 30 billion VND for 5 Canters national wide. However, consumers are fairly slow to sign up for the new services and the number of customers using 3G services in July 2010 is around 1 million customers, meanwhile at that moment MobiFone has around 32 million subscribers. And the revenue of 3G services accounted only for 0.1% of total company revenue and the growth rate monthly is low and decreasing also (around 3% and lower). The results of 3G business at the early months of deploying services are low both in terms of revenue and number of subscribers using the service. Meanwhile, after 3G network was launched by 3 giant operators, the mobile market has been very exciting with a variety of marketing activities held everywhere around and continuously. The two competitors, Viettel and Vinaphone, have attracted customers with many promotions and impressive introduction events. And despite of the fact that Viettel had to launched 3G network 4 months after MobiFone and Vinaphone, Viettel had better results in many aspects with double numbers of customers and many times higher in data traffic which is linked directly to the revenue. And Vinaphone also expressed the determination to be the technology pioneer and market leader. It’s showed that the fierce competition in 3G mobile market is going on and MobiFone is facing a serious problem with 3G services which will be a real factor threatening MobiFone’s performance and competitiveness in the near future. That’s why, the questions posed to MobiFone were How to attract more customers to try on and use 3G services? How to increase the revenue of 3G services? What are solutions for the problem? What are customers’ behaviors towards 3G services. And firstly it’s required to propose the recommendations for MobiFone, especially in marketing activities which have the most feasibility. And it’s also emphasized that the next campaigns deployed must be based on the current 3G services’ situation and the understanding of MobiFone customers’ behaviors towards 3G services.