A company owned by Vietnam’s military will put $1 billion into Tanzania’s mobile market

More selfies are in store.
More selfies are in store.
Image: Reuters/Mohamed Nureldin Abdallah
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Tanzania’s vibrant and competitive mobile space has a new player.

Viettel, the state-owned Vietnamese telecommunications provider run by Vietnam’s Ministry of Defense, plans to invest a billion dollars into Tanzania’s 3G mobile phone market. The network will go operational this year in east Africa’s second largest economy, under the name Halotel.

With 34 million users and 71% penetration, Tanzania already has one of the highest mobile penetrations in Africa, data from (pdf) the country’s regulator shows. Despite this clear potential, Halotel’s entry will not be without its challenges. Other players in the past have struggled to establish themselves in a market dominated by four big companies: Vodacom, a subsidiary of UK’s Vodafone, India’s Bharti Airtel, Tigo and Zantel, both owned by Sweden’s Millicom.

The strategy for Halotel seems to be to focus on providing as much coverage as widely as possible, especially in rural parts of the country. Thus far, Viettel claims to have built an infrastructure that will give it 81% country-wide reach and expand access to 1,500 villages that have been without mobile signals. “Viettel’s operations have enabled services to all 26 regions in the country across rural and urban areas,” the company, which is run by Vietnam’s ministry of defense, said in a statement.

Tanzania is not the only African country where Viettel operates. The telecom firm already has a presence in Mozambique, where it controls a 38% market share, with additional operations in Burundi and Cameroon. Despite the presence of well-established players such as Vodacom and Airtel, the company still sees potential in Africa’s mobile market.

“The users’ density of telecommunications services, especially advanced services, is still low,” Tao Duc Thang, CEO of Viettel Global, the global investment arm of Viettel, has said. “The application of ICT is also still low. And that presents a great opportunity for Viettel.”

Apart from Africa, the company has established its footprint in Asia and Latin America, serving over 170 million people. But Viettel’s ambitions do not stop there.”The goal is that by 2020 Viettel will become a global corporation and among the 10 largest telecom companies in the world,” Tong Viet Trung, vice president of Viettel, has said.