Lyceum of the Philippines University

College of Business Administration

Corporate Management Department

CONVERGE ICT SOLUTIONS INC.

INTERNATIONAL BUSINESS AND TRADE PAPER

Besana I. | Gepala J. | Geronimo N.J. | Oliveros J.E. | Pavilion J.

EXECUTIVE SUMMARY
 INTRODUCTION

BUSINESS BACKGROUND

Company History

Converge was established in 1996 at Angeles City as ComClark Network and

Technology Corp. by Dennis Anthony Uy. In 2007, it changed its name to Converge Information
and Communications Technology Solutions, Inc. Converge ICT Solutions Inc. was given
permission to operate in the Philippines in 2009 by Republic Act No. 9707 the right to develop,
set up, operate, maintain, and use telecommunications systems all over the Philippines.

Converge ICT has emerged as the Philippines’ most rapidly expanding provider of fiber
internet and consumer-focused digital services. The company takes pride in offering premium
products and services that traverse the nation’s first entirely fiber-optic internet network. The
company’s robust lineup of internet services empowers customers to enjoy the utmost in digital
experiences, whether at home, in businesses, or within the corporate sphere, making convergence
the preferred brand of choice.

Vision Statement
World Class ICT Organization that empowers people, business,
and the nation to their best

Mission Statement
Delighting customer by taking care of our own

Founder History

Dennis Anthony H. Uy, the founder and CEO of Converge ICT Solutions, Inc. In the
Philippines, is a visionary entrepreneur known for his success in various telecommunications and
related businesses. He began his entrepreneurial journey while still in university and has since
established a track record of building prosperous enterprises.
 In 2012, Converge was launched with the mission to provide high-speed broadband
services to millions of previously underserved households and businesses in the Philippines.
Dennis is recognized for his talent and innovative thinking, which have led Converge to
introduce new technologies to the Philippine market, including full-fiber optic networks,
fiber-to-the-building solutions, and efficient micro-trenching installations.
In 2019, Converge secured a substantial USD 225 million investment from the global
private equity firm Warburg Pincus to support its fiber network expansion. Under Dennis’s
leadership, Converge has grown from its first broadband customer in 2012 to become the largest
and fastest-growing high-speed fixed broadband operator in the Philippines.

Company Highlights and Milestones

● In 2020, Converge made its debut on the Philippine Stock Exchange, trading under the
symbol CNVRG. Additionally, the internet service provider achieved a milestone by
reaching a total of 1 million residential subscribers, offering them complimentary speed
upgrades.
● In July 2021, Converge increased its data transmission capacity, going from 400 Gbps
(Gigabits Per Second) to 800 Gbps. This upgrade has led to decreased latency and
improvements in the existing metro backbone, enabling it to handle high-speed data
transfers effectively.
● In August 2021, Converge achieved several significant milestones. Firstly, it secured a
place among the 30 blue-chip companies featured in the Philippine Stock Exchange Index
(PSEI). Additionally, Converge was included in the Financial Times Stock Exchange
(FTSE) Global Equity Index Series, and the company also set a new all-time high for its
quarterly net subscriber count in its 29-year history.
● In 2022, Converge ICT Solutions Inc., a fiber broadband provider, reported robust
financial growth in the first half of 2022. Their net income surged by 21.5% to P3.95
billion, driven by expanding broadband services and rising demand, notably from SMEs.
They added nearly 650,000 new fiber-to-the-home (FTTH) ports in the second quarter of
the year, covering 13.5 million homes (52.1% household coverage) on their way to a 55%
target by 2023. Revenues from Converge Business grew by 25.5%, while residential
revenues jumped by 37.9%, leading to consolidated revenues exceeding P16 billion, up
 36.3% Year-on-Year. Converge plans further expansion in North Luzon, Visayas, and
Mindanao.
● In 2023, Converge ICT Solutions Inc., a leading fiber internet provider, secured its
second consecutive title as the Broadband Telecom Company of the Year - Philippines at
the 2023 Asian Telecom Awards. Held in Singapore, this prestigious event celebrated
Converge's remarkable achievements in 2022, including being recognized as the Top
Rated Fixed Network in the Philippines by Ookla®. Converge expanded its pure fiber
network, offered free speed upgrades, and introduced tailored connectivity products. The
company also invested in cable systems to boost connectivity capacity and formed
partnerships with industry giants. This recognition underscores Converge's commitment
to providing equal-quality digital services across the Philippines, bridging the digital
divide.

Unique Business Models

1. Time-of-Day Plans - Tailored for residential areas, this service delivers a speed boost
during designated time slots while ensuring consistently high speeds when not active,
catering to households with peak internet usage during specific daytime hours.
2. The Game Changer (Ultra high Band Speed dedicated for gamers) - Converge has
introduced the Philippines' inaugural fixed broadband plan specially designed for gamers
and gaming enthusiasts, known as FiberX Gamechanger. This unique plan offers
high-priority access and ultra-fast speeds as part of Converge's pure fiber power
offerings. It also includes a dependable gaming router, available at a slightly higher price
point.
3. Converge Dedicated Internet Access for Large Enterprises - A business-exclusive
variation of Time-of-Day plans designed to provide large enterprises with an additional
burst of internet speed during a specific time window, along with enhanced safeguards
against network-based DDOS attacks.
4. Microsoft Azure Peering Service (MAPS) | Enterprise - Converge's Microsoft Azure
Peering Service (MAPS) enhances connectivity to Microsoft Software as a Service
(SaaS) applications like Office 365, Teams, SharePoint, and other Azure Public Cloud
services. A pioneering offering in the Philippines, MAPS ensures a quicker, more
 dependable network link, providing consistent performance, dedicated traffic pathways
through Converge ICT and Microsoft networks, and safeguarded routing over the public
internet. This results in improved business collaboration and increased productivity for
companies.

PRODUCT AND/OR SERVICES

Residential

Premium pure end-to-end fixed fiber broadband internet

services

First in the market, high-prioritization access and ultra

high-speed bandwidth dedicated for gamers.

For small home-based businesses and starts-ups.

First in the market, higher internet speeds at pre-set time of

the day.

High speed service offering premium experience and

personalized customer support.

Broadband internet access through a Hybrid Fiber-Coaxial

network.

Add Ons:

Home entertainment service providing access to pay

television channels, Google apps, and games in partnership
with Pacific KabelNet.

WiFi routers for extended and wider internet coverage

Indoor CCTV security camera

 Delivers Standard Definition (SD) and High Definition
(HD) Channels - bundled product with affiliated cable TV
companies

Enterprise & Wholesale

Small and Medium Enterprises

Pure Fiber Business Internet

Router and CCTV add-ons

Software as a Service (SaaS) HR and Payroll System

Large Enterprise

Premium Internet (MPLS Based)

Ultra-high performance internet connectivity solutions

Offers variable bandwidth based on the pre-set time of the

day

Offers asymmetric download and upload bandwidth

allocation

For internet applications that need bursts of speed at any

time.

Balances performance and cost while delivering enterprise-

grade service

Value-added service to protect connectivity from

 Network-based DDoS attacks

Private Network Solutions:

High-capacity interconnection through MPLS

Point-to-point, high bandwidth connectivity, from the

Philippines to the World

High capacity and secured wide area network (WAN)

connectivity service for satellite offices

Securely link remote offices together using MPLS

technology.

Business Broadband (FTTX)

Pure fiber business internet

Private Network Solutions:

FTTX as a Transport

Integrated IPL+Peering (OTN)

Ensuring innovative and cost-effective IX connection

 Innovative and cost-effective solution providing
international presence and capacity

Wholesale:

Unique and diverse transit route to and from Asia and the
US.

Offers faster, better, and more secure data transfers and

connectivity

Connect to any cable landing nation in the Philippines with

ease

Cloud Connectivity Solution and VAS

Provides a private, dedicated and high- throughput network

connection to Cloud Service Providers (CSP)

Premium LAN-Based 10Gbps connectivity for uploading

large files to primary CSP

Enhance connectivity to Microsoft cloud services by

having the optimal route through public internet

Reliable performance with consistent uptime for maximum

business continuity
 INTERNATIONAL BUSINESS ENVIRONMENT ANALYSIS

Political and Legal Environment

A.2 Government Laws and Regulations

A.2.1 Industry Regulations (Trade Laws)

Affilation with the Association of South East Asian Nations (ASEAN)

In 2007, Vietnam became the 150th member of the WTO, committing to uphold WTO
agreements related to customs valuation, technical trade barriers, and sanitary measures. The
United States and Vietnam signed a Bilateral Trade Agreement in 2000, which came into force in
2001. Vietnam is a member of ASEAN and its ASEAN Free Trade Area (AFTA), collaborating
with other ASEAN countries to promote competitiveness in trade. Vietnam has signed trade
agreements with multiple nations, including China, South Korea, Australia, New Zealand, India,
Chile, and Japan. In 2019, a free trade agreement with the European Union came into effect, and
negotiations with EFTA countries are ongoing. Vietnam is also a member of the CPTPP,
involving ten countries. In 2022, the United States launched the Indo-Pacific Economic
Framework for Prosperity (IPEF) with several nations to boost regional cooperation, economic
growth, and peace, covering areas like trade, supply chains, clean energy, and taxation
(International Trade Administration, 2022).

Key Changes in Vietnam’s Draft Telecom Law

This draft introduces three novel categories of licenses for telecommunications services
accessible to businesses, permits cross-border telecommunications service provision to users in
Vietnam, and classifies applications such as WhatsApp, Zalo, Viber, Line, etc., as internet
application services within the telecom or OTT Telecom services category. Furthermore, it
encompasses the licensing of low-earth orbit (LEO) satellite services with a focus on
cross-border data collection, data center services, and cloud computing services. Lastly, it
emphasizes the necessity for legislation to safeguard users against the buying and selling of
telecommunications traffic for resale (Tilleke & Gibbins, 2023).

Vast market potential in Vietnamese Telecommunication Industry

 Vietnam's telecom market is booming, with companies like Vietnamobile, Viettel,
EVNTelecom, and AT&T investing in innovation. The demand for fast internet and 5G
infrastructure is growing. In 2021, the market was worth $6.3 billion, and the tech sector
contributed 8.02% to Vietnam's GDP in 2022. Telecom firms are sharing infrastructure more,
especially as 5G expands. The government is focusing on broadband and 5G. Mobile network
operators are sharing resources across cities. There are plans to auction frequencies to improve
4G and 5G. Vietnam has lots of mobile broadband users, and it offers cheap mobile internet. The
country is becoming an attractive market for businesses, thanks to its responsiveness to customer
needs and widespread tech adoption (Prakruthi, 2023).

A.2.2 Labor Practices (Labor Laws)

Revised conditions for employing foreign workers

The government in Vietnam has made some changes in the rules about hiring foreign
workers. Gaining permission for businesses to hire foreign staff has been made easier by simply
reporting and getting approval from the government, unlike before it was 30 days, now it only
takes 15 days in advance if they can’t find a local person to do the job. Starting in 2024,
businesses must advertise job openings on certain websites. The new changes in the regulations
also introduces new provisions for reporting foreign workers and exemption from work permits.
These changes are meant to make it easier for businesses to hire foreign workers in Vietnam
(Shira, 2023).

Amended employee-employer Contracts of Vietnam

In Vietnam, labor contracts are required to outline details like scope of work, working
hours, work breaks, wages, location, contract duration, safety, and social insurance. There are
two primary types of labor contracts. Indefinite contracts with no fixed end date and definite
contracts lasting up to 36 months, with the option for one renewal. It is also stated that
e-contracts are equivalent to written ones, and verbal agreements are acceptable for contracts
under one month. Moreover, companies with over ten employees must officially register their
company rules or internal labor regulations with the provincial labor department (Vietnam
Briefing, n.d.).

Amended minimum wage regulations in Vietnam

 Vietnam has two categories of minimum wages. The first is the standard minimum wage
of VND 1,940,000 (approximately $64 or PHP 3,628,86), which is applied to determine salaries
in state-owned organizations and enterprises, and it serves as the basis for social contributions
across all businesses, capped at 20 times the standard minimum wage. The second minimum
wage category is specific to non-state enterprises, and it varies according to geographic zones as
defined by the government (Vietnam Briefing, n.d.).

A.2.3 Other Regulations (Media Laws, Advertising Laws, etc.)

Law on Telecommunications No. 41/2009/QH12 adopted by the National Assembly of

Vietnam on 23 November 2009 (“Law on Telecommunications”)
This law regulates telecommunications activities, including investment and business
activities in the telecommunications field; public utility telecommunications;
telecommunications management; Telecommunications project construction: rights and
obligations of organizations and individuals performing telecommunications activities.
(Thuvienphapluat.Vn, n.d.)

Law on Information Technology No. 67/2006/QH11 adopted by the National Assembly of

Vietnam on 29 June 2006 (“IT Law”)
This law aims to regulate the use, development, and management of information
technology in Vietnam. The law consists of six chapters and 79 articles covering various aspects
of IT, including electronic transactions, data protection, intellectual property rights and
cybercrime. It also applies to all activities related to developing, managing, and using IT within
Vietnam, including hardware, software, networks, and services. (Securiti, 2023)

Decree No. 72/2013/ND-CP of the Government dated 15 July 2013 on management,

provision and use of internet services and online information (“Decree 72”)
This Decree specifically regulates the management, provision and use of Internet
services, online information and online games and ensures information security; rights and
obligations of organizations and individuals in managing, providing, and using Internet services,
online information, online games and ensuring information security. (Thuvienphapluat.Vn,
n.d.-a)
A.1 Business Customs and Practices

A.1.1 Ease of Doing Business

Vietnam became a safer ground or second best asia investment for businesses. In the year
2021, Vietnam continues to attract Foreign Direct Investment(FDI) and for leading the economic
growth for about 2% continuously at pace which is considered as an ideal growth rate of GDP
where it measures how healthy the economy is. Vietnam’s government has worked in improving
their business policies, labor laws, and its rank in leading the ASEAN region for Foreign Direct
Investment. Upon these improvements, Vietnam now has a stable government providing strategic
direction and decisions on major policy issues.
The improvements also made it easier for businesses to operate within their country and
the World Bank counted the country Vietnam as one of the improved countries in areas such as:
● Lower cost of Start-up Business
● Expands accessibility of information and notifications online
● Lower employers’ contribution to the labor fund tax
● Removing requirements to submit hard copies of VAT returns which can now be done
electronically

A.1.2 Other Business Customs and Practices

The political landscape of Vietnam has always been under the dominance of socialist
principles. Vietnam is a one-party state led by communist party who always considers and has a
strong social relationship that businesses must understand because it shapes policies and
regulations that affect their operational activities.

Pervasiveness of socialist values and ideology in Vietnamese society

In Vietnam, there is an established expectation for businesses to play a role in the
betterment of society beyond simply pursuing profits. Like actively participating related to
corporate social responsibility (CSR), as it is common for them to invest in projects considering
the local communities. And this aligns to their strong belief which is focusing on the welfare of
the community. Based on Newman et al., (2020), it is evident that an engagement in CSR has a
positive impact on firm-level efficiency in Vietnam, showing that positive productivity effect is
more visible if the firm is proactively engaged in local community CSR initiatives.
Basically, this shows that understanding a country’s customs and practices plays a huge
role to build relationships and to be able to operate successfully in other countries like Vietnam.

Economic Environment

B.1 Macroeconomic Environment (Last 5 years)

B.1.1 GNP, GDP, and GDP per Capita

Gross National Product (In Billions)

2018 2019 2020 2021 2022

$290.78 $319.5 $333.83 $350.21 $394.13

Vietnam’s GNP demonstrated consistent growth in the years. In 2019, it reached $319.51
billion, marking a significant increase from the previous year. However, due to the pandemic’s
global economic disruptions, 2020 and 2021 were relatively similar, with a little to no increase in
value compared to the previous and subsequent year. In 2022, there is a remarkable 12.54%
increase, reaching a GNP of $394.13 billion, reflecting the country’s effective pandemic
management and strong economic recovery (Macrotrends, n.d.).

Gross Domestic Product (In Billions)

2018 2019 2020 2021 2022

$310.11 $334.37 $346.62 $366.14 $408.80

Vietnam’s GDP displayed a consistent growth pattern in the following years. In 2019, it
reached $334.37 billion, recording a 7.82% increase from the previous year. Similar to GNP,
GDP also had a small increase of 5.63% for 2020 and 2021. However, in 2022, the country
experienced a remarkable 11.65% increase in GDP, reaching $408.80 billion, after the pandemic
(Macrotrends, n.d.).
 GDP per Capita

2018 2019 2020 2021 2022

$3,267 $3,491 $3,586 $3,756 $4,164

Vietnam's GDP per capita demonstrated consistent growth between 2019 and 2021. In
2019, it stood at $3,491, and over the next two years, it experienced steady increases. In 2020,
despite pandemic-related challenges, the country maintained a growth rate of 2.73%, resulting in
a GDP per capita of $3,586. The following year, in 2021, there was a 4.74% increase, reaching
$3,756, showcasing Vietnam's resilience in the face of economic difficulties (Macrotrends, n.d.).

B.1.2 Growth Rate

Growth Rate

2018 2019 2020 2021 2022

7.47% 7.36% 2.87% 2.56% 8.02%

In 2022, Vietnam recorded the highest GDP growth rate of 8.02%. Compared to the
previous two years, 2021 and 2020, it is very low. In 2019 and 2018, their growth rate was
almost stable. (Vietnam - Gross Domestic Product (GDP) Growth Rate 2028 | Statista, 2023b)

B.1.3 Average Family Income

Annual Average Family Income

2018 2019 2020 2021 2022

$2,056.802 $2,235.955 $2,197.480 $2,178.776 $2,409.689

Vietnam's yearly per capita household income reached $2,409,689 in 2022, showing a
positive upward trend compared to the 2018 figure of $2,056,802. However, there was a notable
dip in income in 2020-2021 due to the global economic repercussions of the COVID-19
pandemic. The pandemic led to business closures and substantial job losses worldwide, affecting
people's livelihoods. According to reports, retail sales experienced an impressive year-over-year
growth of 9.000% in July 2023 (CEIC, 2023).

B.1.2 Unemployment Rate

 Unemployment Rate

2018 2019 2020 2021 2022

1.6% 1.68% 2.1% 2.38% 1.92%

The unemployment rate in Vietnam decreased by 0.5% in the year 2022 compared to the
previous year of 2020 and 2021 where the last two years recorded a higher rate than the
preceding years.

B.1.3 Foreign Direct Investments

Foreign Direct Investments

2018 2019 2020 2021 2022

$15.50B $16.12B $15.80B $15.66B $17.90B

Vietnam’s net inflows of foreign direct investments in 2022 amounted to 17.9 USD,
which is higher than the past few years (MacroTrends, n.d.).

B.1.4 Other Economic Implications

Increasing pressure of inflation due to strengthening of dollar

Inflation is becoming a growing concern in Vietnam due to a combination of factors,
including increased demand and the strengthening US dollar, which is causing import costs to
rise. Keeping inflation at the government's target rate of 4.5% for this year is expected to be
challenging, as explained by economic expert Nguyen Bich Lam. Factors contributing to this
inflationary pressure include rising demand for essential commodities like petrol and electricity,
which might lead to an electricity price increase. This would, in turn, raise production costs and
consumer spending, potentially hampering economic growth. Other contributing factors include
increasing basic wages, food prices, and the costs of health and education services (VNA, 2023).
B.2 Industry Environment

B.2.1 Principal Industries

In 2021, Vietnam's key economic sectors included textiles, manufacturing, alongside
tourism and telecommunications. Agriculture accounted for 14.8 percent of the country's GDP
and engaged 38 percent of the overall workforce, as reported by the World Bank. (Nguyen &
Mah, 2022)

Agriculture
Although rice serves as the main staple crop for food production in Vietnam, the country
also produces a variety of other food crops such as sugarcane, cassava (manioc), corn (maize),
sweet potatoes, and nuts. Due to the labor-intensive nature of plowing in Vietnam, water
buffaloes are used to aid in this agricultural process. In terms of food exports, seafood is a major
focus, with significant freshwater fisheries found in the Mekong and Champasak (Bassac) river
plains. (Britannica, 2023)

Manufacturing
Following the reunification of Vietnam in 1976, the government initiated a shift from a
privately owned, capitalist industry to a state-run sector, leading to a decline in productivity and
output. Reforms in the 1980s introduced market mechanisms, reduced subsidies to inefficient
state-run operations, and encouraged private enterprise growth. Food and beverage processing,
seafood exports, coffee, tea, cement, fertilizer, and steel production became major industries.
Garments, textiles, electronic equipment, motorcycles, and automobile manufacturing also saw
significant growth, making them key sectors in Vietnam's economy. (Britannica, 2023)

Tourism
In response to the impact of the COVID-19 pandemic, Vietnam shifted its focus towards
domestic tourism as foreign tourists were no longer a factor. When cities reopened for the first
time, the country emphasized attracting domestic travelers. On average, domestic tourists spent
about USD 49 per day, which was less than half of the USD 117 daily expenditure of foreign
tourists. To regulate tourism and visitor categories, Vietnam modified its immigration policy by
temporarily eliminating 90-day tourist visas and limiting stays to 30 days. As of the first quarter
of the current year, Vietnam welcomed 2.69 million tourists, which accounts for 33 percent of the
targeted 8 million for 2023. Although this number falls short of pre-pandemic levels, it marks a
positive step towards achieving a sustainable and resilient recovery in Vietnam's tourism
industry. (Nguyen & Mah, 2022)

Telecommunications
In 2022, the telecommunications services market in Vietnam had a total worth of $6.3
billion, and it is anticipated to experience a compound annual growth rate (CAGR) of 4.4%
between 2022 and 2027. Viettel is the leading player in the industry, primarily focusing on
expanding its 4G network while also planning to introduce a 5G network. In April 2022, Digilife
Vietnam Digital Services Co. joined the list of internet service providers in the country.
Furthermore, in the same year, Vietnam observed the largest proportion of total mobile
subscriptions due to initial mobile adoption and an increase in multi-SIM ownership among its
residents. (GlobeData, 2023)

B.2.2 Major Exports

Vietnam’s export sectors have experienced a notable transformation in recent years. The
country’s strategic location, trade agreements, and competitive labor costs have established it as
a thriving global manufacturing hub. The principal industries for exports such as textiles,
electronics, automobiles, pharmaceuticals and coffee illustrate the variety and potential for
growth that Vietnam provides. Vietnam has become a key exporter of electronics, surpassing
coffee, textiles, and rice. Samsung is one of Vietnam’s largest exporters, playing an important
role in supporting the country to achieve a trade surplus for the first time in several years.
Electronics such as mobile phones, telephones, and other related components are the major
exports of Vietnam, consisting of 21% of its total exports with textiles being second for having
12% of the export share. (Nguyen & Mah, 2022)

B.2.3 Major Imports

Vietnam has become a major importer of machinery, electronic goods/computers, phones,
fabrics, and plastics, constituting almost 34% of total imports. But also Vietnam relies more on
the importation of intermediate goods like semi-processed products and capital goods, from
China and South Korea. Which led to substantial trade deficits, particularly with China. (Nguyen
& Mah, 2022)
 B.2.4 Currency
Currency in Vietnam is considered as one of the most stable currencies in Asia amid the
fluctuation of the global financial market especially in the first four months of the year 2023. The
Fed or Federal Funds aims to slow down the circulation of money to bring down the inflation
rate as it applies interest rate hikes given concern to global recession and instability of the United
States Banking System. Due to interest rate hike, significant changes in currency might raise
concern to other countries yet Vietnam maintained its stable currency. It is reported that the State
Bank of Vietnam had bought a large volume of currency within the four months of 2023 which is
believed to raise foreign exchange reserves, a total amount of 90 Billion USD was given as
reserves. The head of the Foreign Exchange Management Department also stated that the State
Bank of Vietnam by the end of the year 2022 had developed a positive and gradual stability to its
currency. (VNA, 2023)

B.2.5 Trade Barriers (Tariffs, Quotas, and Non – Tariff Barriers)

Vietnam eliminated non-tariffs barriers such as quantitative restrictions on both import
and export, quotas, bans, permit requirements, authorization requirements, licensing
requirements, and other restrictions that has the same effect as the ones mentioned which is
considered as inconsistent with its World Trade Organization commitment under the agreement
made with United States known as 2001 United States-Vietnam Bilateral Trade Agreement
(BTA) including it’s acquisition on World Trade Organization (WTO). Furthermore, many other
non-tariff barriers remained such as:

1. Customs
The implementation of World Trade Organization’s Customs Valuation Agreement
created issues on the clearance process of customs, inefficiency in citing, rules and regulation is
unclear, red tape and corruption follows affecting the exportation of other countries in Vietnam.

2. Trading Rights
Import rights are granted to all goods except for products that reserved importation
through the state trading enterprise and products that are subject to phase in period.

3. Import Prohibition
 Vietnam prohibits some products such as weaponry, ammunition, explosive materials,
military technical equipment, fire-crackers, second-hand consumer goods, type of publication,
cultural product that are prohibited from dissemination and circulation within the country of
Vietnam, right hand drive motor vehicles, material and transport facilities, and certain types of
chemicals.

4. Price Registration and Stabilization

The Ministry of Finance (MoF) may apply price control when prices of certain goods
increase or decrease without a legitimate excuse and may be subject to the pricing registration.

5. Automation
Excise Tax is a tool used by the government of Vietnam to control the importation of
vehicles. The calculation method’s basis is on the selling price.

6. Oil and Gas

Import and distribution of gas in Vietnam has a single seller that operates three state
enterprises such as Petrolimex, PetroVietnam, and Saigon Petro.

7. ICT
Vietnam Technology remained underdeveloped in certain sectors due to data privacy
concerns. Foreigners may invest but only under joint ventures with local Vietnamese partners
that are for government approval.

8. Distribution Services
Foreign distributors are restricted for a limited number of goods that are not part of
Vietnam's distribution sector commitments.

9. Health Care
Importation of medical devices for the purpose of commercial used are not allowed in
Vietnam

10. Food and Beverages

Re-export and trans-shipment of hazardous waste items and temporarily banned imports
of certain products including consumer goods, frozen animal by-products, and offal.
 11. Construction
Allowed to only import if products provided qualified results of steel that meets the
requirements of the Vietnamese Government.

12. Banking and Securities Service

Publicizing the Law on Credit Institutions that gives a prudential ratio for credit
institutions made way to introduce new requirements and restrictions that foreign banks must
follow.

13. Investment Barrier

Investment in conditional sectors and projects that are sensitive and subject to extensive
must require the approval of the Prime Minister.

B.2.6 Other Industry Environment

Vietnam is on a determined path to upgrade its infrastructure and achieve high-income
status by 2030, taking inspiration from the development models of nearby economic countries
such as Singapore, Taiwan, and South Korea. This project involves the construction of extensive
new expressways, high-speed railways, airpots, etc. These initiatives are related to the logistics
sector in Vietnam, contributing to the ease of goods transportation across and outside the country.
The Vietnamese government saw potential in this project and signed the Resolution No.
163/NQ-CP in December 2022 which seeks to improve the growth of goods production,
import-export activities, and domestic trade with an expanded transportation infrastructure.
Vietnam is striving to establish itself as a leading logistics hub in the region, positioning the
country for substantial economic growth and attracting foreign investments. (ZhenHub, 2023)

Social and Cultural Environment

C.1 Demographics

C.1.1 Population
The mid-year population estimate for Vietnam in 2023 is 98,858,950. A 0.68% increase
from the year 2022. The population of Vietnam constitutes 1.23% of the global population.
(Worldometer, 2023)
 C.1.2 Age
Based on Worldometer (2023), the median age in Vietnam is 32.8 years. Vietnam’s age
dependency ratio for working-age people is 46% which means that nearly half of the population
within the working-age bracket (15-64 years old) is economically inactive, primarily composed
of children. This places a substantial financial burden on those who are actively part of the labor
force and the overall economy. The working-age population, in this scenario, would have to
provide for the needs, education, and well-being of a significant number of children. (Statista
Research Department, 2023)

C.1.3 Sex
During 2022, Vietnam’s population surpassed 99.5 million individuals, comprising 49.86
million females and 49.6 million males. (Statista Research Department, 2023)

C.1.4 Ethnic Groups

Vietnam is recognized as a culturally diverse nation, comprising 54 distinct ethnic
groups. The largest among them is the Kinh ethnic group, constituting 88% of Vietnam's
population, which amounts to approximately 87.56 million individuals. The remaining 53 ethnic
groups collectively represent a smaller proportion, making up just 12% of the country's total
population. (Northern Vietnam, 2023)

C.1.5 Religion
Religion has a multifaceted impact on the daily lives of common individuals, influencing
them on various fronts. It furnishes moral principles, assigns significance to their existence and
the world around them, and offers comfort and optimism for the times ahead. A few religions are
predominant in Vietnam like Buddhism, Confucianism, Taoism, Catholicism, and Cao Dai. As
life in Vietnam was regulated by a vast array of beliefs, practices, and taboos. But, Buddhism is
the leading religion wherein 55% of the population are Buddhist. (Asia Society, n.d.)

C.1.6 Language
Vietnamese serves as Vietnam's official language, with about 59 million people, primarily
in Vietnam and among Vietnamese communities globally. It falls under the Austro Asiatic
language family and comprises three major dialects: Northern, Central, and Southern, with the
Northern variant being the standard and prestigious form. While Vietnamese was historically
represented in modified Chinese characters, it transitioned to Roman script with diacritics under
the influence of Catholic missionaries. Efforts to promote the language within Vietnam have
been notable, particularly in the realm of education and official correspondence, aimed at
preserving its linguistic clarity and integrity. Vietnamese employs a tonal system, featuring a
subject-verb-object sentence structure. (Penn Language Center, n.d.)

C.2 Social Norms

C.2.1 Consumer Product Preferences

Vietnamese consumers have become extra careful and "smarter," mainly with regards to
high-priced items. The era of the internet and social media has eased customers' access to
product information, enabling them to quickly evaluate product quality and compare prices
before deciding which one to buy. Furthermore, Vietnamese consumers have a strong interest in
the provenance of goods; they're much more likely to consider the quality of goods from
advanced markets (just like the Americas, Europe, Korea, Japan, etc.) than from home
manufacturers and different developing markets (like China, ASEAN countries, etc.).
Vietnamese customers are mainly interested in and regularly choose imported items from
advanced countries with regards to children foods, functional foods, medications, cosmetics,
cars, and a few luxurious items (jewelry, watches, etc.). (TTWTO VCCI, n.d.)

C.2.2 Consumer Traditions

The brand as well as the country of origin influence consumer behaviour in Vietnam and
lead them to buy a product. Culture has a major impact on consumers' purchase decisions in
Vietnam, as shown by Duc and Cang (2018). Festival events, music and films are enjoyed by
Vietnamese consumers. It is more likely that their purchasing decisions will be influenced by
products or advertisements that correspond to their cultural values. (Duc & Trong, 2018)

C.2.3 Other Social Practices

The family is the basis of the society in Vietnam and not the individual. The loyalty and
respect to the family is very important. The family revolves around the patriarchal concept where
within the family, the wife deals with all the household matters while the husband deals with
things that require work and other matters revolving around the outside world. Vietnamese
people also practice bowing their heads as a sign of respect before a superior or aged person
upon greeting each other, they also do not look steadily at the respected person’s eyes.
Vietnamese women do not shake each other’s hand with men and they are also not allowed to
smoke in public. Mainly, the important practices that must be kept in mind are respecting the
elders, valuing the food, maintaining a calm demeanor, and following Confucianism as a way of
life. (Vietnam Culture, n.d)
Technological Environment

D.1 Technology and Science

D.1.1 Level of Technology

Leading Sub-Sectors
1. Smart Cities
Vietnam initiated smart city development in 2007, with 48 of 63 cities approved. Rapid
urbanization, particularly in major cities, is driving the need for smart solutions. By 2040, half
the population is expected to live in urban areas. Funding sources include the state budget,
official development assistance, international loans (World Bank, Asian Development Bank), and
private sector involvement through public-private partnerships. (International Trade
Administration, 2022)

2. Telecommunications
Vietnam has five mobile operators, with Viettel, Vinaphone, and Mobifone dominating
the market. As of February 2021, there were 125 million mobile subscribers, with a 129 percent
penetration rate. Traditional telecom services, comprising 54 percent of revenue, are declining
due to saturation and increased competition. Major operators are shifting focus to digital
services, fiber optics, payment, and cloud services. Successful 5G trials have been conducted in
major cities, with commercialization planned for 2022. Investments in 5G deployment are
estimated to reach USD 2.5 billion from 2020-2025. (International Trade Administration, 2022)

3. Cybersecurity
Vietnam's cybersecurity market is projected to reach USD 215 million by 2023, with an
annual growth rate of approximately 15 percent. The country's digital economy is expected to
exceed USD 43 billion by 2025. However, the rapid growth in digital services has led to an
increase in sophisticated cyber threats. To address this, the government issued Decree 14 in June
2019, requiring public sector entities to allocate at least 10 percent of their annual IT expenditure
to cybersecurity from 2020-2025. Additionally, Decree 53, effective from October 1, 2022,
outlines requirements for local data storage and a local presence under the 2018 Cybersecurity
Law. (International Trade Administration, 2022)

Some of notable technology and science project opportunities in the country :

● Smart Cities project in Dong Anh District, Hanoi, USD 4.2 billion, 2019-2028
● HCMC Intelligent Transportation System, USD 250 million, 2020-2025
● HCMC Intelligent Operations Center, USD 43 million, 2021-2025
● HCMC Unified Emergency Communications Center Project, USD 43 million, 2020-2025
● Da Nang Intelligent Transportation System Project, USD 23 million, 2020-2025
● Da Nang Intelligent Operations Center, USD 7.5million, 2020-2025.
● Ho Chi Minh City Security Operating Center Project, USD 10 million, 2021-2025

D.1.2 Technological Skills of the Population

Data from the Global Skills Index 2020 report placed Vietnamese technology skills
second in Asia Pacific and 22nd globally. Vietnam's technological proficiency is ranked second
in the world, only behind "cutting-edge" and above "emerging" and "lagging," according to the
report. It also stated that operating systems (Android and iOS software development) at a
competitive level are the nation's strongest technological skill. The country's knowledge of
computer networking (including blockchain and wireless networking), databases (including
relational and key value databases), human-computer interaction (including user interface and
machine translation), security engineering (including cyberattacks and cryptography), and
software engineering (including software development and algorithms) was rated as having a
developing proficiency level. (Khoa, 2020)

Industry Environment

E.1 Competition

E.1.1 Direct Competitors

1. VNPT
 VNPT offers various home internet packages not available in English on their website.
The basic plan starts at VND 189,000 per month (USD $8.11), promising a maximum domestic
speed of 30 Mbps without a specified minimum for international access. They offer a discount of
3 free months for a 12-month payment but note this isn’t available in major cities. Their cable
internet package offers speeds up to 200 Mbps domestically and a minimum of 2 Mbps for
international access. This faster plan costs VND 895,200 per month (USD $38.43), which
remains relatively affordable. (Zander, 2020)

2. VIETTEL
Viettel is a preferred ISP among many foreigners in Vietnam due to perceived better
quality, varying by location. They offer home internet plans starting at VND 185,000 per month
(USD $7.94) with a basic 30 Mbps download speed. Paying upfront for 6, 12, or 18 months can
get you 1-3 bonus months. They also provide a cable TV and internet bundle with speeds up to
150 Mbps domestically and a minimum of 5 Mbps internationally, including over 200 TV
channels, priced at VND 525,000 per month (USD $22.48). (Zander, 2020)

3. FPT
FPT is the only major ISP in Vietnam with a fully translated English website due to its
private nature. Their personal internet packages span four tiers, starting at VND 185,000 per
month (USD $7.94) for 22 Mbps and going up to VND 300,000 per month (USD $12.85) for 65
Mbps. For corporate packages, speeds range from 100 Mbps to 400 Mbps. In Hanoi and Ho Chi
Minh City, they offer a 1 Gbps package, though its pricing isn't listed online. (Zander, 2020)

E.1.2 Indirect Competitors

1. Vinaphone
Vietnam's second-largest mobile network concentrates on promoting its prepaid
packages, often offering good value. One of their current offers is a 4G package with 60GB of
high-speed data (up to 2GB per day), including 1,500 minutes of calls on the VinaPhone network
and 50 minutes for off-network calls, all for VND 120,000 (USD $5.14) each time. (Zander,
2020)
 2. Vietnamobile
Vietnamobile, the fourth-largest network, offers two postpaid plans: one at VND 75,000
(USD $3.21) with 750 on-net minutes, 50 off-net minutes, and 1.5GB data, and another at VND
150,000 (USD $6.42) providing 1,500 on-net minutes, 120 off-net minutes, and 4GB data. Extra
services cost VND 990/min for calls, VND 300/SMS, and VND 20,000/GB. For heavy data
users, Vietnamobile's prepaid 4G data add-ons range from 1-30 days. The most cost-effective
monthly prepaid plan offers 3GB/day (up to 90 GB in 30 days) plus free on-net calls for VND
90,000 (USD $3.85). (Zander, 2020)

3. MobiFone
MobiFone offers a range of internet packages that renew monthly, starting from VND
70,000 (USD $2.99) for 3.8GB up to VND 500,000 (USD $21.42) for 55GB. Additionally, they
have prepaid plans tailored for various needs: The MobiQ plan offers SMS rates of VND
200/SMS on-net, VND 250/SMS off-net, and VND 2,500/SMS international. Voice calls are
priced at VND 1,580/min within the network and VND 1,780/min outside. Alternatively, the
MobiGold package offers on-network calls at VND 880/min, off-network at VND 980/min, with
SMS rates at VND 290/350 for on and off-network respectively. (Zander, 2020)

E.2 Competitive Profile Matrix

E.2.1 Product Price and E.2.2 Product Features

VIETNAM POSTS AND
CONVERGE ICT VIETTEL MILITARY AND
TELECOMMUNICATIONS GROUP
SOLUTIONS INC. TELECOMS GROUP
CRITICAL SUCCESS FACTOR (CSF) WEIGHT (VNPT)

WEIGHTED
SCORE SCORE WEIGHTED SCORE SCORE WEIGHTED SCORE
SCORE
E.2.1 Product Price

1. Price Competitiveness 0.25 4 1.00 3 0.75 3 0.75

2. Technological Innovation and Adaptability 0.20 3 0.60 4 0.80 3 0.60

3. Operational Efficiency and Cost Control 0.25 4 1.00 4 1.00 3 0.75

4. Financial Stability 0.15 3 0.45 4 0.60 4 0.60

5. Brand Image and Reputation 0.15 2 0.30 4 0.60 3 0.45

TOTAL 1.00 - 3.35 - 3.75 - 3.15

E.2.2 Product Features

1. Value-Added Services and Market Positioning 0.25 4 1.00 4 1.00 3 0.75

2. Data Privacy and Regulatory Compliance 0.15 3 0.45 4 0.60 3 0.45

3. Customer Support and Service Quality 0.25 3 0.75 3 0.75 4 1.00

4. Global Reach 0.20 3 0.60 4 0.80 4 0.80

5. Industry Certification and Standards 0.15 3 0.45 4 0.60 3 0.45

TOTAL 1.00 - 3.25 - 3.75 - 3.45

4 – Major Strength | 3 – Minor Strength | 2 – Minor Weaknesses | 1 – Major Weaknesses

PROPOSED INTERNATIONAL BUSINESS STRATEGY

Market STP Strategy

A.1 Market Description

A.2 Demographic Segmentation

A.3 Geographic Market Segmentation

A.4 Behavioral Segmentation

A.5 Target Marketing

A.6 Market Positioning

Product Strategy

B.1 Unique Selling Proposition

B.2 Product/Service Adaptation or Modification

B.2.1 Product/Service
B.2.2 Packaging and Labeling
B.2.3 Support Services
 Pricing Strategy

C.1 Market Price

C.2 Customary Markups

Placement Strategy

D.1 Distribution Strategy

D.1.1 Distribution Channels

D.1.2 Warehousing
D.1.3 Distribution Mode of Transport

D.2 Mode of Payment

Integrated Marketing Communications Strategy

E.1 Advertising Strategy

E.1.1 Advertising Media Mix

E.1.2 Customary Advertising Technique

E.2 Sales Promotion Strategy

E.2.1 Customary Sales Promotion Technique

E.2.2 Customary Discounts

Partnerships Strategy

F.1 Partner Agencies

 International Business Cost Structure Estimates

G.1 Marketing Cost

G.1.1 IMC Cost

G.1.2 Product Cost
G.1.3 Distribution Cost
G.1.4 Other Marketing Cost

G.2 Administrative Cost

G.2.1 Estimated Legal Processing Cost

G.3 Human Resource Cost

G.3.1 Estimated Personnel Cost

Marketing and Financial Assumptions (Optional)

H.1 Projected Annual Sales

H.2 Project Income Statement

H.3 Projected Cash Flow

H.4 Projected Balance Sheet

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