VietNamNet Bridge – The participation of PetroSetco, a member of the Vietnam Oil and Gas Group (PetroVietnam), in the mobile phone distribution market has proved that this fertile land is no longer in the hands of big IT and telecom firms.
Seeking partners as counterbalance
The cooperation between the PetroVietnam Tourism and Services Joint Stock Company (PetroSetco) and Nokia is established based on Nokia’s target to confirm its No.1 position and expand its market share after ten years in Vietnam.
According to Tran Manh Phuong, Nokia Vietnam’s Business Manager, Nokia had tried to seek a partner for over one year.
“In the next 3-5 years, the mobile phone market is forecast to see many changes so we need a professional distribution system through potential partners. PetroSetco is the top candidate with potentials in finance, human resources, business network and importantly the support from its parent group – PetroVietnam,” Mr Phuong said.
Tran Cong Tao, Chairman of PetroSetco’s Management Board, said that as a multi-area group, it should not be surprising that PetroSetco has developed a telecom product distribution company (PV Telecom).
Mr Tao said that PV Telecom has opened eight branches nationwide in an effort to develop a distribution network that covers rural and urban areas.
“Joining hands with Nokia is a good starting point for PV Telecom. Nokia brand is an advantage for PV Telecom in entering the telecom product distribution market,” Mr Tao added.
PV Telecom is a ‘layman’ in the playground that has long been for IT distributors but according to Huynh Van Thi, senior advisor for PV Telecom, Nokia’s solution is seeking a partner with financial potential, sustainability and who is ready to invest, so experience at distribution is an auxiliary aspect because the two sides will organise the network to serve their needs together.
The commitment made by PetroSetco is not cooperating with other mobile phone producers, except for Nokia.
“The market needs real distributors, not normal traders, so we will have to try our best to make the difference to seek the market share of the newcomer,” Mr Thi said.
PetroSetco becoming Nokia’s partner is due to Nokia wanting a distributor who can be a counterbalance to the Corporation for Financing and Promoting Technology (FPT), which is holding up to 80% of the market share of Nokia in Vietnam. Therefore, PetroSetco has immediately gathered a team including members who were consulters for Nokia in Vietnam and other countries.
Meanwhile, FPT, the largest distributor of mobile phones of most leading names like Nokia, Motorola, Samsung, Verty seems to be worried about this competition. Revenue from mobile phone accounted for around one-half of FPT’s total distribution revenue in 2006, up to US$539 million (higher than the revenue of the whole group in 2005 - $517 million). This level is considered its peak because the growth was up to 50% in 2006.
“PetroSetco is directly supported by Nokia and it is strong at financial ability because it is a subsidiary of PetroVietnam. The risk of losing market share and profit is a very real possibility,” said a representative of FPT.
Busy mobile phone market
It is still unknown whether PV Telecom will be successful in this new field or not but before they jump in this market, competition is already fierce.
The sale of the Vietnamese mobile phone market in 2006 was approximately US$900 million, over 40% more than 2005. This area is considered the hottest with around 30 million subscribers forecast for the end of 2007. The market, thus, is big enough to attract big companies.
In that context, producers surely don’t want to ‘put all eggs into a basket” when seeing Nokia’s example, which lost its market share after its distributor, Dong Nam Associates, collapsed in 2002.
The mobile phone distribution market is being divided into different directions. If FPT combines with famous brands in Vietnam, smaller companies have also ruled a certain part of the market, for example P&T with Sony Ericsson, An Binh with Dopod and BenQ-Siemens, Pacific Dragon with O2, Thanh Cong Mobile with Panasonic, Innostream and Pantech.
CDMA-based mobile information network operators like S-Fone, HT Mobile, and EVN Telecom have their distribution systems. Viettel also has its retail system. In addition, there are many dynamic and modern chains of mobile shops of the Mobile World, A Telecom, Thanh Cong Mobile and Nettra.
The mobile phone market, as a result, is not a special playground for any distributor when mobile network operators also become distributors. While big firms aim to build professional distribution models, retail companies also want to create their own distribution models.
Experts have said that there will be many more companies taking part in this market before foreign firms are allowed to be directly involved in the distribution network in 2009.
According to Huynh Van Thi, PetroSetco’s participation in the distribution market not only aims to attack the mobile phone field but to become a distribution channel in the IT market for any eligible producer.
In the new condition of competition, not only Nokia, but any producer will target a ‘counterbalance’ when they are strong enough to create a tripodal position in business and ruling the market.
(Source: TBKTSG)
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment