Vietnamese Viettel Enters The East African Market
Vietnamese mobile telecom operator Viettel is entering the East African market, set to start soon operating in Tanzania and later expanding to the other East African countries.
Last week the government of Tanzania announced it had given Viettel the license to set up a 3G mobile phone network in the country. Viettel has also expressed interest in entering the Kenyan market by purchasing a 70% stake in Telkom Kenya.
Viettel’s initial plan was to buy Kenya’s yuMobile but later on dropped the bid. Orange Telecom is planning to exit the Kenyan market by shedding its stake at Telkom Kenya due to stiff competition that has only intensified after yuMobile was sold to Airtel and Safaricom.
Viettel is currently operating in Mozambique, and it entrance into the Tanzanian market will usher its debut into the East African telecom market. In Tanzania, it will go into competition against India’s Bharti Airtel, South Africa’s Vodacom and Zantel of Etisalat from the United Arab Emirates. It is also said that Viettel is currently working on getting license in Central African countries of Congo and Cameroon.
Viettel’s entry into the East African market is probably going to ignite a price war among telecom operators as they fight for new customers and to maintain their current customers. Viettel is expected to focus much of its operations in rural areas of Tanzania. Statistics shows that most rural areas in most African countries, many people are still yet to get connected to mobile communications.
The government of Tanzania is said to have been trying to persuade more telecom operators to launch operations in its rural areas since the areas are experiencing a growing demand of telecom operator services. So Viettel’s launch into Tanzania’s rural areas is a welcomed move.
According to the Tanzanian government, Viettel is expected to connect more than 4,000 villages across the rural areas by 2016. A telecom analyst from Africa Center for ICT Development, Edith Mwale said, “For a long time, operators in Tanzania just like other African countries have just been fighting for customers in urban areas. Viettel’s focus on rural areas will now force other operators to also spread their networks to rural areas or lose out.”