UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ HOANG THU THAO EFFECT OF BASE TRANSCEIVER SHORTAGE ON CUSTOMER CHURN IN MOBIFONE MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: PGS.TS TRAN HA MINH QUAN Ho Chi Minh City – Year 2020 TIEU LUAN MOI download : skknchat@gmail.com Table of contents 1.1 Overview of the telecommunication industry in Vietnam…………….2 Vietnam telecommunication industry challenges from 2013 to 2018.1 Development internet service – 3G/4G…………………….2 Network Transfer Services.3 Profile of MobiFone Telecom Corporation – Mobifone……………….1 Mobifone organizational structure industry……………………….2 Initial Cause-effect map……………………………………………….1 Relationship between service quality (SERVIQUAL model) and the first problem………………………………………………………………….1 List of causes……………………………………………….1 Inappropriate telecommunication infrastructure…………… ….2 Poor quality service………………………………………… ….4 Inappropriate competitive strategies ……………………………….33 TIEU LUAN MOI download : skknchat@gmail.1 Application of the service quality (SERVIQUAL) model in the telecommunication industry……………………………………………….2 Final caused-effect map…………………………………………….1 Priority solutions to BTS shortage……………………………………….2 Adding solutions to quality of service……………………………………39 5.………41 REFERENCES APPENDIX Appendix 1: Complaint from Facebook Page of Mobifone (Data collected from Dec/2018 to Apr/2019) Appendix 2: Depth interview with internal staffs Appendix 3: Transcript of Causes evaluation and solution (second interview) TIEU LUAN MOI download : skknchat@gmail.com List of Tables Table 1: Report on the situation of deploying MNP service of the MIC Table 2: Report on the situation of deploying MNP service of the MIC Table 3: Report on the situation of deploying MNP service of the MIC Table 4: Summarized data from the beginning of MNP service Table 5: Summarized data from the beginning of MNP service Table 6: Summary of customer feedback on Mobifone service Table 7: Annual report of total number of BTS of Mobifone from 2005 to 2013 Table 8: The estimated budget forMobifone from Jan to Sep, 2020 TIEU LUAN MOI download : skknchat@gmail.com List of Figures Figure 1: Market Share of 3G Data service between providers in 2016 Figure 2: Vietnam data mobile report in Quarter 2, 2017 Figure 3: Mobifone organizational structure, 2017 Firgure 4: Summarized data from 16/11/2018 – 30/10/2019 Figure 5: Report on the situation of New Subscribers during MNP (16/11/2018 – 24/03/2019) Figure 6: Initial cause-effect map Figure 7: Conceptual Model of Service Quality Figure 8: The Engel-Blackwell-Miniard Model Figure 9: Updated causes-effect map Figure 10: Annual report of total number of BTS of Mobifone from 2005 to 2013 Figure 11: Final cause-effect diagram TIEU LUAN MOI download : skknchat@gmail.com Abbreviations and Acronyms ICT Information and communications technologies MNP Mobile Number Portability QoS Guaranteed quality of service RBV Resource Based View ROA Return On Return ROE Return On Equity TV Television VMS Vietnam Mobile Telecom Services Company VNPT Viet Nam Post and Telecommunication Group TIEU LUAN MOI download : skknchat@gmail.com EXECUTIVE SUMMARY In 2018, when the Ministry of Culture and Information (MIC) officially launched MNP, the statistics showed that the current number of Mobifone customers has left this provider and switched to using other telecommunication providers such as Viettel, Vina. This rivals obviously have the same situation but with Mobifone, this is an alert for the company to look back on the quality of its service. By making interview, literature review and analyzing the data in 2018-2019. “Service Quality could not adapt Customer needs” is the main problem make customer switch to other providers.
The result of research and interview defined 4 causes affected to problem. These causes has been validated and evaluated to define the level of important to company. As the discussion, Lack of base transceiver is the main cause. Based on these causes, alternative solution has been suggested and discussed to find the suitable one for Mobifone.
To make clear for the solution, an action plan was made. This action plan is expected to help Mobifone improve their Network Coverage Quality and Service customer. 1 TIEU LUAN MOI download : skknchat@gmail.1 Overview of the telecommunication industry in Vietnam In the ‘Doi Moi’ economic refomrs that began in 1986, the telecommunications sector in Viet Nam was seen as an essential factor, and the economy achieved a remarkable result through structural reform measures that deviate from the conventional state monopoly mold. Currently, the Vietnam telecommunication industry is dominated by three major service providers, namely, Viet Nam Post and Telecommunication Group (VNPT) – Vinaphone, MobiFone Telecom Corporation – Mobifone, and Army Telecommunications Group – Viettel.
During the first half of 2017, Vietnam’s telecom advertising reported a 127 per cent rise in full profits of 213 trillion dong ($ 9.38 billion), with major commitments from Viettel, with 55 per cent of Vietnam Post and Telecommunications company sales (31 per cent), and Mobifone (9. Telecoms groups announced double-digit revenue growth, supported by supporters switching from 2 G to 3 G services, just as 4 G services recently sent by suppliers. Starting estimates from the Information and Communivations Ministry said that there were around 130 million mobile endorsers as of June, including 68.2 million 3 G customers and 7.3 millino landline supporters. The sum of wired broadband Network endorses continued growth over the primary half, hitting 10.
Three major Vietnamese telecommunications groups during the time propelled 4G benefits in large urban communities, and are struggling to convey the nation’s service by the year-end. Driving supplier Viettel said its all-out backers, with 61 million local customers, grew to about 100 million. The gathering declared revenue for the duration approaching 117 trillion dollars, and pre-tax income of 21 trillion dollars, achieving virtually a large portion of its year-round goals. Worldwide revenue ranged from 25 per cent to $600 million, mostly from flexible adminitrations, particularly 4 G and e-wallet administrations, and huge technology 2 TIEU LUAN MOI download : skknchat@gmail.com innovation projects for governments and organizations.
Viettel is focused on $1.4 billion in overseas sales, a 29 per cent rise year – on – year, and adapting to the target of 50 million endorses in 2017 elsewehere. The organization hopes to finish building network base in Mynmar, and this year will provide 4 G broadband service in its 10 overseas markets1. The outputs of each of the three major players in Vietnam’s telecommunications industry are presented below. Viet Nam Post and Telecommunication Group (VNPT) - Vinaphone: general sales combined were 53,770 billion VND, reaching 101.2% of the projection, rose 6.3% compared to the year 2016.
Besides, the telecommunications and technology revenue reached 48,380 billionVND, up by 6% compared to the last year. MobiFone Telecom Corporation - Mobifone: MobiFone's recruitment reached 19 million new subscribers, exceeding 1.1% of the projection which was set out in 2017 and 11% growth compared to the year 2016. Revenues reached 38,439 billion VND that was over 107.2% of the year’s projection, growing 14.5% over the year of 2016. Profit before tax in the year 2017 was estimated to reach 5,204 billion, reaching 100% of the target Army Telecommunications Group - Viettel: Revenues reached 226,558 billion VND completing 100% of the company target.
The net profit before tax reached 43,200 billion VND, achieving the 101% of the projection. Rate of profit before tax/equity 34.4% of the plan. In 2017, leading to Viettel's recruitment increase by 7.4 million new subscribers.2 Vietnam telecommunication industry challenges from 2013 to 2018 This section presents the major challenges faced by the Vietnam telecommunication industry between 2013 and 2018. Vietnam telecom market posts strong growth.
3 TIEU LUAN MOI download : skknchat@gmail.1 Development internet service – 3G/4G Regarding the 3G service market, in 2016, the number of 3G mobile subscribers of Viettel accounted for 57.7% of the total 3G subscribers, an increase of more than 16% compared to 2013. The market share of Vinaphone was 23.9%, an increase of 1. To the contrary, the market share of 3G services of Mobifone reduced from 33. The market shares of the three major players in the industry are shown in figures 1 and 2 below.
Figure 1: Market Share of 3G Data service between providers in 2016 (Source: White Book of MIC, 2017) Figure 2: Vietnam data mobile report in Quarter 2, 2017 (Source: Q & Me Vietnam Market Research in 2017) 4 TIEU LUAN MOI download : skknchat@gmail.com With the new 4G service, Vinaphone, Viettel and Mobifone have not only had an increase in their revenues but have given the users more opportunities to experience unprecedented services in Vietnam. This is not withstanding the many challenges that the Vietnamese providers must overcome, namely: (i) calculating revenue and cost in implement base transceiver of 3G/4G in across the whole country; (ii) developing equipment and tools which will be used for 3G/4G; (iii) price of internet data package (3G/4G); (iv) increasing network and coverage quality.2 Network Transfer Services Mobile Number Portability (MNP) first appeared in some European countries from 2001 to 2004, MNP is a program that enables users to select other mobile network providers without changing Mobile Network Carrier. Accordingly, allowing users to keep the same serial numbers on different mobile network carriers. This service brings many benefits to the users (more choices, better service providers), businesses such as improve service quality and management agencies (garbage scams).
MNP seems to create a competitive strength in telecommunications market between providers in which the quality of the service is seen to increase; the value-added products are plentiful and innovative to attract the users, whereas the cost rate of service is seen to decrease. MNP also helps MIC in controlling the number of Sim/ Card. Besides, it brings some opportunities such as attracting customer from other Operators; Reviewing and Evaluating Company Customer care service quality and becoming a service provider rather than a pure network operator. This service implementation at the end of 2018 is seen to be a threat to Mobifone in telecommunication market.3 Profile of MobiFone Telecom Corporation - Mobifone Formed Vietnam Mobile Telecom Services Company – VMS, Vietnam Post and Telecommunications Corporation, state owned company, was established on April 16th, 1993.
Mobifone has since developed from strength to strength and is estimated to be the means of communication of choice for 50 million subscribers (about 30 per cent of market share). In 2014, revenue from MobiFone Corporation reached U$ 2 billion, making it one of Vietnam’s three largest mobile operators. Value to services 5 TIEU LUAN MOI download : skknchat@gmail.com has remained a key strategy for Mobifone leadership since its founding. MobiFon Corporation now offers a variety of services, including telephone, email, interet, IPTV/cable TV, business solutions, and investment services.
The main services of Mobifone include 5 packages: MobiGold (business), MobiCard (low cost users), Mobi365 (for workers, farmers), MobiQ (for Student), Mobizone (for in-zone call). Besides, Mobifone is providing many added value services such as: SMS, Voice SMS, Funring, SMS Locator, LiveInfo, Services on 3G: Video Call, Mobile TV, Mobile Internet, Fast Connection (Accessing mobile broadband internet). MobiFone was the first mobile telecommunications service provider in Vietnam to be recognized as the best mobile operator in three consecutive years (from 2005 to 2008) during the Vietnam Mobile Awards Ceremony, organized by E-chip Mobile Magazine, and in 2009 in particular, Mobifone was honoured to win the 2008 Excellent Operator Award from the Vietnam Ministry of Information and Communications. Mobifone was the most common of Vietnam’s mobile telephony services for six consecutive years (2005 to 2010) voted by Vietnamnet readers.
Based on MIC report on the last quarter ending December 2018, Mobifone was ranked seventh out of five hundred of the best-profitable enterprises in Vietnam. The business ranking is rated objectively and independently which is based on the key calculation, with the main criteria being ROA, ROE, revenue and the rate of profit on the equity of the business. In the first 6 months, the Mobifone's total assets reached VND 36,247 billion, rising by VND 6,282 billion compared to the beginning of the year, the net turnover of VND 17,231 billion and the profit before tax reached VND 2,434 billion.1 Mobifone organizational structure Presented below is the Mobifone organizational structure. 6 TIEU LUAN MOI download : skknchat@gmail.