Deputy General Director Dang Tung Son on Vietnam Investment Review

Malaysia’s second largest fixed-line telecom operator – TIME dotCom Berhad (TIME) has become a strategic shareholder to CMC Telecom since 2015. Why did you decide to partner with TIME in the first place? How has the relationship grown since then?

Back in 2013, before the deal was sealed, we realised that Vietnam would soon open up its telecommunications sector to foreign investment. The gains in foreign capital in the last few years is seen to be extremely significant, but we also observed several instances of failed marriages. Therefore, CMC Telecom ourselves was very careful in deeply collaborating with a foreign partner. Prior to TIME, we were in talks with several finance and telecom corporations from Japan and Korea. What we desired was a shareholder that would take us further with our culture.
CMC Telecom was on TIME’s shortlist of potential partners and we first met in April 2014 to discuss the co-operation framework. With their target of enhancing the mutual understanding before deeper conversation, CMC Telecom was invited for a courtesy visit to TIME’s headquarter and facilities in Malaysia. We have learnt a lot from TIME with their domestic and international business, especially how TIME grew from zero to hero, becoming the second largest company of its kind in Malaysia, with a market capitalisation now added up to $1 billion. They have experienced an amazing development path with clear strategies to thrive in a fiercely competitive market.
We were completely confident and trusted that CMC Telecom and TIME could co-operate comprehensively in the long-term, based on the same overall vision, mission, and strategy we shared. As a result, our strategic deal was completed shortly and smoothly in May 2015, just after 1 year since the first initiatives.
From 25 per cent initial investment in CMC Telecom, TIME has boosted its holdings up to 45.27 per cent at present. This movement proves the enhanced and long-term mutual understanding which CMC Telecom and TIME have achieved. Our mother shareholder – CMC Group also found TIME to be a trustworthy partner with full capability to facilitate our significant development and growth.

How has CMC Telecom been doing since your establishment, particularly after the foreign investment? What impacts did the deal have on your profit and revenue?

Following the investment, in May 2015, we initiated the strategy for 2016-2018. TIME got involved in the process and they were fully aware of our ambitions.
Our strategy is focused with the designed target of transforming the company into an ICT Converged Service Provider (CSP) in Vietnam, and ultimately, aiming at global market. Our key target customers are large domestic and foreign enterprises.
We also initiate five core values, namely innovative, professional, teamwork, quick and customer centric. We believe that these values are crucial to create our momentums towards the digital future.
TIME, with their developing experience and success in international market, shared the same core values with CMC Telecom. TIME has gradually supported us in our operation, step by step help us understand our customers deeper, beyond Competitors’ knowledge so that we can present as their provider of choice, in order to offer all their ICT needs to grow their own businesses
CMC Telecom have reported an average 30 per cent growth in sales per annum since 2015 and we will endeavour to maintain this rate in the next three years. We have also seen a 10-fold increase in profit over the last 6 years, with VND170 billion ($7.5 million) at present.

As your partnership with TIME has been tremendously successful, do you think a foreign investor can always help a local company to reach new heights?

We believe each corporation with their specific business is unique and there is no one-size-fit-all solution – and this applies to foreign investment, too. For any business, it is important to have the fundamental of clear vision, strategy, and missions.
Corporations need to think long and hard about their mission and vision for the future roadmap to decide if they need additional shareholders to be on board. Whether it will be a foreign or local shareholder, they must strive for the same goals.
Source: Vietnam Investment Review, No. 1407/October 1-7, 2018