What has CMC Telecom - the only ISP with foreign shareholder achieved after 15 years?
Eight years ago, CMC Telecom became the first ISP in Vietnam to have a foreign shareholder: Time DotCOM - Malaysia's largest private carrier who holds in hands many fiber optic networks, including the A Grid. The "Asia - World - Asia" connection strategy of Time DotCom has now worked, helping CMC Telecom assist Vietnamese enterprises to stay in touch with the world during the recent severe submarine cable disruption.
Choosing TIME as its foreign shareholder also helps CMC Telecom to strongly develop after 15 years of establishment. From a new and young company, CMC Telecom has transformed itself into a converged service provider to offer top digital infrastructure and ICT services in Vietnam and in the region.
The decision to choose a foreign partner
To Mr. Dang Tung Son - Deputy CEO/ CMO of CMC Telecom, the decision in 2015 is still seen as one of the historical turning points of the company.
Previously, it was not rare for the market to witness not-so-successful investment deals of foreign carriers. However, the similarities in strategies have brought success to the "cross-Asia handshake" between CMC Telecom and TIME.
Faced with challenges as a fledgling network operator, but with the ambition to provide international standard ICT services to enterprises in Vietnam, Board of Directors and Management of CMC Telecom then clearly defined that the first strategic step must be to build a domestic telecommunications cable system and create an international telecommunications network.
TIME dotCom Berhad (TIME) is the partner that CMC chose to approach. Founded in 1996, the Malaysian company quickly rose to become the second largest network operator in the country and gradually reach to the region, with a capitalization of $2 billion. It is also a market-leading private carrier, taking advantage from the early investment of hundreds of millions of dollars in undersea cable infrastructure such as UNITY, Asia Pacific Gateway (APG), Asia-Africa-Europe-1 (AAE-1) and FASTER to allow seamless connection between Asia and the world.
"If the cooperation is formed, both companies will be able to share with and support each other in terms of technology, service, production, market development and especially connection to world telecommunication infrastructure network, while jointly exploit domestic and international customer databases", Mr. Son recounts.
After spending more than a year getting to know each other, in May 2015, a signing ceremony was held, marking the first time a Vietnamese ISP had a foreign shareholder.
The sweet success after 15 years
Contrary to the initial concerns of observers at that time, the alliance between CMC Telecom and TIME dotCom proved successful immediately after the first year.
In 2016, the APG began to be exploited by Vietnamese carriers. Despite being a new face, CMC Telecom wowed the crowd as one of the first providers in Vietnam to exploit this cable system, with the ability to provide bandwidth of 54Tb/s and Internet speed of nearly 20 times faster than the old AAG.
Clearly defining connectivity infrastructure as the "lifeblood" that decides the success of digital transformation strategy, CMC Telecom continued to expand and upgrade its infrastructure both at home and abroad.
At the end of 2017, the company officially put Cross Vietnam Cable System (CVCS) into operation. With the total length of more than 2,500 km (from Lang Son to Tay Ninh), the cable route passing through 19 provinces and cities of the country received a total investment of over 500 billion VND and is the only Vietnamese cable system directly connected to A Grid - the mainland cable system of Southeast Asia. By July 2018, CMC Telecom became one of the first three companies in the world to earn MEF 3.0 certification - the most advanced standard for Ethernet connection service between international carriers today. This achievement is a testament to CMC Telecom's ability to deliver the highest quality connection services in the market, based on globally recognized standards.
In Time DotCOM's 2022 annual report, CMC Telecom is mentioned right in the first pages as one of its two critical partners in Southeast Asia with continuous revenue growth. According to CMC Telecom's financial statements, the company's revenue increased from 830 billion VND in 2015 to 2,500 billion VND in 2022, i.e. over 300%. In the last three years, the company has maintained a compound growth rate of over 25% and currently has revenue of about 3,000 billion, accounting for 60% of profits of the Corporation.
Revenue of CMC Telecom is continuously increased
According to Mr. Son, TIME has critically contributed to the achievements of CMC Telecom. Both entities are private enterprises who understand the challenges of the regional telecommunications market. And since their inceptions, both have been aiming at high-end customers, especially those in Banking and Finance - the industry seen as the lifeblood of a nation's economy.
"When cooperating with a foreign company, we learn how to provide international quality services through the training to obtain certifications of the world's leading technology firms," said Mr. Son.
Along with that, the "deep-dive" market penetration strategy which aims at the target customers also helps CMC Telecom have a deep understanding of customers and their characteristic operations, thus to provide the most optimal solutions and services.
As of mid-2023, statistics show that CMC Telecom is leading the Digital Infrastructure market, as its services are being used by 100% of banks in Vietnam - considered as the most fastidious and demanding clients. In addition, 50% of enterprises in the top 100 global brands of Forbes are also using services of this Vietnamese provider.
When CMC Telecom expanded its business to Data Center and Cloud, the company became the first partner chosen by big names like AWS, Google and Microsoft when they penetrated Vietnamese market, and successfully built the first Multi-Cloud platform in the domestic market. The company has also developed its own cloud computing platform - CMC Cloud, which has become the leading domestic cloud service in Vietnam, holding more than 25% of market shares by mid-2023.
Along with the opening of Tan Thuan Data Center - the most modern and secure data center in Vietnam in August 2021, CMC Telecom has become a leading digital infrastructure provider that offers enterprises digital transformation products and services with modern and secure digital infrastructure according to the highest international standards as well as the most reliable information security technology.
Awards such as: Top 10 Digital Infrastructure Solution Providers in Asia Pacific in 2022 by APAC CIO Outlook, Most Innovative Cloud Service Provider in 2020 by IFM, etc. are testaments to the success of the only ISP with foreign shareholder. At the recent Asian Telecom Awards 2023, CMC Telecom is also the only Vietnamese representative to be honored with two prestigious awards of Cloud Initiative of the Year and Infrastructure Initiative of the Year.
CMC Telecom is the only Vietnamese representative to be named the winner in both the Cloud and Infrastructure categories at the Asian Telecom Awards 2023
Regarding the vision for the future, Mr. Dang Tung Son - Deputy CEO/ CMO of CMC Telecom affirmed: "In the next 4-5 years, CMC Telecom will continue to maintain its growth rate at 25-30% and grow its revenue to 8,000 billion VND. This is challenging, but with the right strategy and highly qualified personnel with strong aspirations, we believe that this goal is completely achievable."