Tài liệu Assessment of implementation of government strategies in improving competitiveness of telecommunication companies in vietnam basis for policy redirection using pest analysis and solution

THAI NGUYEN UNIVERSITY Socialist Republic of Vietnam SOUTHERN LUZON STATE UNIVERSITY Republic of the Philippines "Assessment of Implementation of Government Strategies in Improving Competitiveness of Telecommunication Companies in Vietnam: Basis for Policy Redirection using PEST Analysis and Solution” DOCTOR OF BUSINESS ADMINISTRATION STUDENT: PHAN THẾ HÙNG CLASS: DBA1 Hà nội, 2013 1|Page ACKNOWLEDGEMENT I would like to express our most sincere thanks to the Management Board of the Southern Luzon State University, Thai Nguyen University,, the teacher of the school has helped me facilitate the learning process throughout. I would like to express sincere gratitude and profound Professor. Dr Milo Placino enthusiastic teacher who have dedicated guidance, encouragement, spend time and exchange orientation for me during this research. I would like to express my sincere thanks to the telecomunication enterprises VNPT,Viettel,SPT,VTC in Ha noi and Ho chi minh has helped me research material, through a questionnaire survey. I sincerely thank Ministry of information and communications, Information and communication public manager school, colleagues and classmates DBA1 facilitated enthusiastic help and share my experience to help complete the thesis. Finally, I would like to send the gift to the heart of my family has passed enthusiasm and encouragement to complete my thesis. Phan The Hung 2|Page REPRESENTATIONS I hereby declare that this is my own research. The figures mentioned in the thesis are correct. The conclusion of the thesis has not been published in any other work. Phan The Hung 3|Page Abstract In the past years achievements of the ICT sector has made a significant, bringing great benefit to society. The number of telecom business increased, the dynamics of the telecom business increased, telecommunications cost reduction, quality telecommunications services are gradually improving. However, with the development many problems arising in this industry:The dispute service; The exclusive license; The human problem; The issue of restructuring of state-owned corporations; The issue of managing telecommunication infrastructure; Management services, management These issues are directly related to government policy and regulations, development policies in recent years, as well as issues of economic, social, technological ... The assessment of the macroeconomical impact of government policy through the evaluation of the implementation of government policy in the competitive telecommunications business model with PEST is an essential need and then finding make recommendations for policy changes. To implement this study, the author answered: To evaluate the competitiveness of the telecommunications company in Vietnamn; To determine the impact of the policies of the state on the development and competitiveness of telecommunications industry in Vietnam; To draft policies that will further improve the competitiveness of the telecommunication industry in Vietnam. Scope and limitation of the study: Some state macroeconomic policies, especially the operation of information and communications; The level of implementation of government policies for the development of competitive telecommunications corporations Vietnam: Group of Vietnam Post and Telecommunications (VNPT); Viettel Corporation (Viettel); Vietnam Multimedia Corporation (VTC); Sai Gon Poster Corporation (SPT) Results of this study will showed that the level of implementation of government policies for the development of competitive telecommunications businesses in Vietnam. This study will clarify somewhat the impact of the policy as well as the macro factors affecting the development of competitive telecommunications businesses, so we can choose the more appropriate solution. The study will help policy makers to have a clearer view of the telecommunications activities, the macroeconomic factors as well as the impact of these factors to the competition in the telecommunications business. Since then there is a reasonable adjustment, the right time ... to ensure harmony between the interests of the state, business and civil society in terms of development technology and ICT services, international economic integration. 4|Page TABLE OF CONTENTS ABBREVIATIONS 10 CHAPTER I: INTRODUCTION 12 1. Introduction ........................................................................................................................... 12 2. Background of the study........................................................................................................ 15 3. Statement of the problem....................................................................................................... 20 4. Significance of the study ....................................................................................................... 20 5. Scope and limitation of the study: Scope of the study and limitation ................................... 21 5.1 Subject of the study ............................................................................................................... 21 5.2 Scope and limitations of the study......................................................................................... 21 6. Definition of terms Definition of terms ................................................................................. 22 CHAPTER II: REVIEW OF RELATED LITERATURE AND STUDIES 25 1. Literature review ................................................................................................................... 25 2. Conceptual frameworkConceptual framework...................................................................... 29 3. Characteristics of the competitive environment in telecommunications business. ............... 36 3.1 Influence of the political system, laws and policies: the Telecommunications Law, the Enterprise Law, Investment Law, Competition Law... .......................................................... 36 3.2 The capacity depends on the manager. .................................................................................. 37 3.3 The characteristics of the competitive relationship between the enterprises in the field of high technology products and intangible services .......................................................... 38 4. Theoretical framework .......................................................................................................... 39 4.1 PEST model ........................................................................................................................... 39 4.2 The PEST elements of the telecommunications industry ...................................................... 41 CHAPTER III: Methodology 44 1. Research design ..................................................................................................................... 44 2. Subject of the study ............................................................................................................... 44 3. Research instrument .............................................................................................................. 44 4. Subjects of investigation........................................................................................................ 45 5|Page 5. The survey content. ............................................................................................................... 45 CHAPTER IV: PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA 52 1. POLITICAL FACTORS, INSTITUTIONS, GOVERNMENT LEGISLATION AFFECTING THE MARKET COMPETITION IN TELECOMMUNICATIONS ................... 62 1.1 The institutions and laws of the state of the competitive telecommunications business in Vietnam. .................................................................................................................... 62 1.2 Assessing the implementation of government policies for the development of telecommunications competition ................................................................................................. 68 1.3 Analysis of results surveys for Policy elements (P) ............................................................ 72 2. ECONOMIC FACTORS (E) THE IMPACT OF COMPETITIVE MARKETS IN TELECOMMUNICATION ......................................................... Error! Bookmark not defined. 2.1 The economic situation in Vietnam in 2012, socio-economic indicators in 2013 ................ 79 2.2 Investment policies, tax incentives and government investment in infrastructure and telecommunication services to promote effective competition in the telecommunications business. 81 2.3 The economic integration and participation of many economic sectors to develop competitive telecommunications. ................................................................................................ 87 2.4 Analysis of results surveys for Economic elements (E) ...................................................... 91 3. SOCIAL FACTORS (S) ........................................................................................................ 97 3.1 Workforce ITC with the development of the Telecommunications business. ...................... 97 3.2 Implementation of programs of public telecommunications and telecommunications development .............................................................................................................................. 103 3.3 Analysis of results surveys for Social elements ................................................................ 107 4. TECHNOLOGICAL FACTORS AFFECTING THE TELECOMMUNICATIONS MARKET (T). ........................................................................................................................... 113 4.1 The impact of technology convergence factors for the telecommunications sector. .......... 113 4.2 The impact of factors of state investment in research and development competitive telecommunications ................................................................................................................... 116 4.3 Analysis of results surveys for Tenical elements (T) ....................................................... 119 C. ACHIEVEMENTS, RESTRICTIONS AND CAUSE ...................................................... 126 1. THE ACHIEVEMENTS ..................................................................................................... 126 2. RESTRICTIONS AND CAUSE ......................................................................................... 128 2.1 Restrictions .......................................................................................................................... 128 2.2 Cause of the limitations mentioned above........................................................................... 129 6|Page CHAPTER V : SUMMARY, FINDINGS, CONCLUSIONS AND RECOMMENDATIONS 131 1. Solutions related to policy factors (P) ................................................................................. 131 2. Economic Solutions (E) ....................................................................................................... 134 3. Solutions related to social(S) ............................................................................................... 136 4. Solutions related technology (T) ........................................................................................ 140 5. CONCLUSION ..................................................................................................................... 125 7|Page LIST OF TABLES Table 1.The list of factors investigated: 46 Table 2.factor of telecom business 48 Table 3.number of documents relating to Telecommunications Competition last 5 years. 61 Table 4.Analysis of influence factors (x1-x4) of P to each telecommunication companies 73 Table 5.Determine the meaning of the elements X1, X2, X3, X4 74 Table 6.Post Hoc Tests on P 76 Table 7.Assess the impact of the P element of competition among businesses. 77 Table 8.foreign direct investment by sector in vietnam 83 Table 9.Analysis of influence factors (x5-x8) of P to each telecommunication companies 92 Table 10.Determine the meaning of the elements X5, X6, X7, X8 93 Table 11.Post Hoc Tests on E 95 Table 12.Assess the impact of the E element of competition among businesses. 97 Table 13.Labor productivity is measured by GDP / hour 102 Table 14.Analysis of influence factors (x5-x8) of P to each telecommunication companies 108 Table 15.Determine the meaning of the elements X9, X10, X11, X12 109 Table 16.Post Hoc Tests on S 111 Table 17.Assess the impact of the S element of competition among businesses. 113 Table 18.Analysis of influence factors (x13-x16) of T to each telecommunication companies 120 Table 19.Determine the meaning of the elements X1, X2, X3, X4 121 Table 20.Post Hoc Tests on T 123 Table 21.Assess the impact of the P element of competition among businesses. 124 Table 22.General summary of enterprises 125 8|Page LIST OF FIGURES Figure 1.Market share of telecom service operators 19 Figure 2.Governmental organization on ICT 56 Figure 3.Market share of mobile phone service providers 91 Figure 4.Number or universities and colleges offering ICT traning 100 9|Page ABBREVIATIONS 2G Second Generation Mobile Network 2G+ or 2.5 G Second Generation Enhanced 3G Third Generation Mobile Network 4G Fourth Generation Mobile Network ADSL Asymmetric Digital Subscriber Line AFTA Asean Free Trade Area AMPS/NMT Advanced Mobile phone System/Nordic Mobile Telephony APC Law of the Australian Postal company APEC Asia-Pacific Economic Cooperation BCC Business Co-operation Contract BTS Base Transceiver Station CDMA Code division multiple access CDMA Code Division Multiple Access EDGE Enhanced Data Rate for Global Evolution FDI Foreign Direct Investment FOMA Freedom of Mobile Multimedia Access GPRS General Packet Radio Service GSM Global System for Mobile Communications HSCSD High-speed Circuit Switched Data ICT Information ITU International Telecommunication Union NGN Next Generation Network PDC Personal Digital Cellular 10 | P a g e and communications technology PHS Personal Handyphone System PSTN Public Switched Telephone Network R&D Reseach & development TDMA Time Division Multiple Access SPT Saigon Post and Telecommunications Service Corporation Viettel Military group telecommunications VNPT VietnamPost Telecommunications Group VTC Vietnam Multimedia Corporation VoIP Voice over Internet Protocol WEF World Economic Forum WTO World Trade Organization 11 | P a g e CHAPTER I: INTRODUCTION 1. Introduction Telecommunications, Vietnam's IT industry in recent years has been seen significant development. It has met as a critical infrastructure for economic and social development, required by the innovation of the country as well as it meets the needs of providing essential services to people and contributes significantly to improvement on people's knowledge, improves social and cultural life of the people. In order to gain the success the Government has had the right policies. Government has made policies in each period for telecommunications development that appropriate for socio-economic development. The opening of the telecommunications market promotes competition among firms. This has created many positive effects such as the charges are step by step significantly reduced. Nowadays more and more people have been able to get access to the telecommunications services. The telecom market is more and more competitive and there are major changes, new technology is applied rapidly. The quality of service is improving and charge is lower. The sales of the telecommunications industry increased 25-30% rate in the period 2001-2010. It becomes major contribution to the state budget, to poverty reduction. The gap between regions, between urban and rural areas has narrowed. Beside that it ensures the safety and security information. The IT industry has become an important economic sector, with annual growth rate higher than any other areas. The contribution to GDP growth increases year to year. The whole IT industry average revenue growth in the period 2001-2009 represented 2025% per year. By the end of 2010, the revenue of the software industry and digital content industry reached 2 billion USD, the hardware industry revenue reached 5.6 billion USD, revenue of telecommunications services reached over 9.4 billion USD, bringing the total revenue of telecom and IT industry in 2010 to 17 billion USD, 19 times higher than that in 2000. On September 22, 2010, the Prime Minister signed Decision No. 1755/QD-TTg to approve the National Strategy on “Transforming Viet Nam into an Advanced ICT country” (referred to as The Strategy from now on). This reflects the political 12 | P a g e determination of the Party of Viet Nam and the Government in developing ICT industry to keep pace with countries in the region and the world. The Strategy sets out objectives as: to develop ICT human resources to international standards; to build ICT industry, especially software industry, digital content industry and IT services, to become a leading economic sector, so as to contribute significantly to GDP growth and exports; to set up a broadband information infrastructure in the whole country; to apply IT effectively in all socio-economic aspects and national security, defense. The annual growth rate of the ICT industry income is to reach at least 2-3 times the growth rate of GDP. By 2020, the contribution of ICT industry to GDP should be from 8% to 10%. Based on these views and objectives, The Strategy identifies six groups of tasks focusing on issues such as: developing ICT human resource; developing ICT Industry; continuing to develop and improve the telecommunications and IT infrastructure; building and deploying suitable supporting solutions for providing digital information to households; applying IT effectively in government agencies, enterprises and the society; strengthening research capacity in the ICT sector; mastering gradually and developing technologies for creating new products. The Strategy also stated six solutions: enhancing information dissemination regarding the Strategy; promoting the socialization of investment in ICT, especially in the development of broadband telecommunications infrastructure; providing investment incentives for priority areas; building and improving institutional frameworks; establishing a specific mechanisms and renewing policies; promoting international cooperation. ( White book 2011 page 16) The ICT state management system was formed in order to promote and develop ICT sector. In 2002, the National Assembly approved the establishment of the Ministry of Post and Telematics, responsible for the development of post, telecommunications and IT. In 2007, the Ministry of Information and Communications was established on the basis of the Ministry of Post and Telematics with an additional responsibility for the areas of press and publishing. Regulation in provinces is implemented and in charged by local Departments of Information and Communications. IT application dedicated 13 | P a g e departments/units were established in all central ministries/agencies, including 06 ministries/ ministerial-level agencies with specialized IT Department. Policy and regulatory environment for the ICT application and development has been significantly improved. About 180 legal documents on ICT were issued in the period 2001-2010, including Electronic Transactions Law 2005, IT Law 2006, Telecommunications Law 2009, Radio Frequency Law 2009, Postal Law 2010 and many Decrees and Decisions of the Government and the Prime Minister on post and telecommunications, Internet, information technology, radio frequency, etc. These documents have created a legal system and made important contributions to promote ICT application and development in recent years. Implementation of market-opening commitments to the WTO, the international economic integration, the trend of convergence with the type of telecommunications services, many businesses network infrastructure, providing enterprise telecom services have been license, with participation in the future of private enterprise and foreign competition in the telecommunications market will become increasingly fierce and strong on all aspects and services segment of the market. Ensuring a healthy competitive environment, equality for businesses is a top priority; urgent requirement for the development of Vietnam's telecommunications industry in the future. To do this, the State's role is extremely important. State is in one’s capacity as administrative- law agencies and as the management agency at macro will creates legal frameworks, policies and measures to contribute to important competitive environment of the Vietnam Posts and Telecommunications businesses. In the historical context of Vietnam recent years, the development of telecommunications has shifted gradually from the state monopoly to market mechanisms are regulated by the state, the organizational structure of the telecommunications business the greater the change, the new telecommunications group was established, the mechanism of government policy for the sector has also changed. The government's policies are decisive, influence on the development of industry and especially the competitiveness telecommunications. 14 | P a g e In the past years achievements of the ICT sector has made a significant, bringing great benefit to society. The number of telecom business increased, the dynamics of the telecom business increased, telecommunications cost reduction, quality telecommunications services are gradually improving. However, with the development many problems arising in this industry: - The dispute service - The exclusive license, - The human problem - The issue of restructuring of state-owned corporations - The issue of managing telecommunication infrastructure ... - Management services, management These issues are directly related to government policy and regulations, development policies in recent years, as well as issues of economic, social, technological ... The assessment of the macroeconomical impact of government policy through the evaluation of the implementation of government policy in the competitive telecommunications business model with PEST is an essential need and then finding make recommendations for policy changes. We are working at the Ministry of information and communication, staff is advising the Department of Telecommunications. The selection of topic " ASSESSMENT OF IMPLEMENTATION OF GOVERNMENT POLICIES IN DEVELOPING COMPETITIVENEES OF TELECOMMUNICATION COMPANIES IN VIETNAM: BASIS FOR POLICY REDIRECTION USING PEST ANALYSIS " is useful for my job as well as the Ministry of Communications. 2. Background of the study In telecommunications development process, from the 1999 Vietnam has gradually shifted from business telecoms monopoly to market mechanisms are regulated by the state. But markets only really developed since the Telecommunications 15 | P a g e Ordinance, 2002 by the President announced. Since then, the market for telecommunications services has developed an important contribution in economic development - economic development of the country. Many projects in the fields of business, many infrastructure systems were formed synchronously changing the face of the economy, improve people's living conditions and contribute to economic restructuring towards industrialization and economic modernization. In this process the diversity of forms of ownership shall determine the existence of various economic sectors in transition in Vietnam. This also means that there will be enterprises of various components involved in a market, a level playing field. The existence of various economic sectors in the transition period brought many benefits. However, the requirements of the market economy are that all businesses, regardless of economic sectors are trading autonomy and equality before the law, equality of access to business resources. Because of the mechanism of centralized planning and subsidized enterprises of all economic sectors in the state were actually enjoying the preferential allocation of state in all aspects throughout a long period of time. Meanwhile, the enterprises of other components need to meet demand for resources for business to comply with the market mechanism. Transfer to a market economy this is clearly inappropriate. So, too many economic policy components to life, to arouse motivation and rich in resources and people in the sector are to create a level playing field for all businesses regardless of sector. Playground also includes the competitive environment of the telecommunications business. Operation of telecommunication services market is not immune from the laws of nature characteristic of the market economy in general. The influence and impact of the role of the state and markets telecommunications services today been confirmed as larger competitive environment increasingly vibrant. The strong development of telecommunications products with the speed of its development poses conflict entails promoting better, more realistic role of the state in regulating and managing the development of telecommunication services market. In this development, the state created "playground", creating a legal framework for the 16 | P a g e operation of the market. State management of the market, as "referee" between the participants in the market and develop market-oriented telecommunications services for economic development and ensure social security. In addition, the State also plays a role in the market as the supply and demand in the market of telecommunications services. State participation provides telecommunications services to meet the needs of economic development that the market does not want or can not afford to participate as technical infrastructure to actively regulate the market ... In addition, the State as a system of administrative organization, along with the state-owned enterprises have become the largest market for telecommunications services. However, the telecom service in Vietnam has not developed proper range and also some limitations. Market development is uneven and unstable. Competitive and transparent market remains weak. After the first phase of the effort of telecommunications services in the 1980s, the telecommunications market in 1998-1999 has begun revealing challenges of the new phase, the main reason is due to monopoly business. Exclusive mechanisms of this year were expressed in the internal stagnation of VNPT. At that time, even though society still feel sluggish, marginalized by corporate monopolies, but the prime minister was asked to consider the opening of competition in the telecommunications industry. After that, the quality of telecommunication services have improved but still high rates to the majority of people and the customer care is limited. In 2000s telecommunications market began turning the 2nd period with the introduction of Directive 58 and the General Post Office to participate Viettel’s longdistance telephone business in the domestic and international (the 2nd visit market) opening period of "transition from monopoly to competition phase" in the field of telecommunications. Meanwhile, the General Post Office met a lot of pressure. However, after 10 years, Vietnam's telecom market has been a "change meat" represented by the level of universal service and low rates in the world to hold the car he or she sold vegetables foreign markets are also "alo". However, in the last 3 years (2010-2012), the telecommunications market has exposed the risk of unsustainable development, may detriment of consumers and the state. The investments of the telecommunications business was limited due to the 17 | P a g e economic crisis, which affects the quality of networks and services. The nascent business operates difficultly and the risk of bankruptcy. Efficient management and telecommunications investment there are certain restrictions when most large enterprises are state-owned enterprises, more than 90% of telecommunications network assets are Vietnam state. To foster the development of telecommunications services, to overcome the defect to stabilize the market, limiting the negative impact of the market for telecommunications services economy in the coming period should be: Improving the legal system to promote and manage telecom services market developing fast, efficient, sustainable and healthy, properly oriented; Additional legal framework for the establishment of financial institutions non-banks such as trusts telecommunications services, investment funds to build telecommunications networks ... to attract capital for market balance supply - demand for goods and services telecommunications market, ensuring actively stabilize the market in accordance with the law of supply and demand, promoting economic development and social security, and management capacity of market participants in telecom services, expand the supply telecommunications services in strata with low incomes. Improving information systems, market forecasting telecommunications services; innovation, enhance the level and effectiveness of state management for this market are very necessary. In fact, operating on the market of telecommunications services becomes "active" when the market appeared many providers of telecommunications services such as SPT outside VNPT, Viettel, EVN ... is the domestic business and today there are more foreign competitors such as Beeline ... Accordingly, the market competition and grab market share really is a "race" drastic. Since then break the monopoly in the provision of telecommunications services as well as the formation of new telecommunications market. The provider of telecommunications services in this market has made every effort to improve their competitiveness. 18 | P a g e Figure 1. Market share of telecom service operators The level of implementation of government policies is becoming increasingly important in promoting the development of telecommunications services market. The activities in the telecommunications sector and the provision of telecommunications services are experiencing conflict and overlap, requiring the government to play its role in the fine regulation and macroeconomic management development the telecommunications services market. These roles are shown as follows: First, recognizing the independence of the economic entity in the market of telecommunications services. They autonomy of economic decisions, freedom of choice, be required to bear the economic risks if any. Therefore the State must build legal systems, regulations and regulatory mechanisms macroeconomic and implementation guidance, supervision and control of the market of telecommunications services. Second: Building system competitive market, improved stability and activity provides telecommunications services in the market. Third: impacting on the allocation of resources. Fourth, organizational planning and attracting investment in infrastructure. Fifth: making the allocation of regulatory economic indicators in the telecom sector - IT equitably and ensure fair competition. By the main tools, the State does the above functions: the legal system and law 19 | P a g e enforcement apparatus laws of financial instruments, cash flow and sector State. In recent year, issues surrounding competitive environment, the competitiveness of Vietnam's telecommunications industry has been a scholar of national and international researchers interested in various aspects of the problem topic: The appropriateness of the documents for the ICT sector? Mergers and MobiFone VinaPhone with any Competition Law? Strengthening the competitiveness of the Post and Telecommunications Group in Vietnam. Restructuring the telecommunications group..... Evaluation of the impact of the government's policy with telecommunications firms, we study deeply “EXTENT OF IMPLEMENTATION TO GOVERNMENT POLICIES IN Developing COMPETITIVENEES OF TELECOMMUNICATION COMPANIES IN VIETNAM: POLICY BASIS FOR PEST ANALYSIS” To get the right solution in order to improve the competitive environment for telecommunications in Vietnam in the coming time. 3. Objectives of the Study This study was aimed to determine the status on the implementation of the government strategies in improving competitiveness of telecommunication Companies in Vietnam and able to find solutions that will give direction using PEST Analysis and Solution. Specifically it will work on the following objectives: 3.1. To evaluate the competitiveness of the telecommunications company in Vietnamn. 3.2. To determine the impact of the policies of the state on the development and competitiveness of telecommunications industry in Vietnam. 3.3. To draft policies that will further improve the competitiveness of the telecommunication industry in Vietnam. 4. Significance of the study This study will be beneficial to the following: 4.1 For the telecommunications companys: This study clarified the relationships influenced directly and indirectly by the macro-economic policies on developing the internal elements of the business. Thereby 20 | P a g e