Viettel Construction Corporation (code CTR) has recently announced its decision to invest in the project of building infrastructure for BTS rental in 2024 with a total investment of VND 1,460.4 billion. The project has a scale of up to 5,000 BTS stations, to be implemented in 63 provinces/cities from the first quarter of 2024 to 2026.
With this roadmap, it is expected that in 2024, Viettel Construction will increase its ownership of BTS stations to 9,975 stations, continuing to be the number 1 TowerCo in Vietnam. At the same time, this figure also puts Viettel Construction in the Top 10 TowerCo in ASEAN and the Top 30 TowerCo in the world. It is expected that during the period of 2025-2030, the company will build an additional 2,000 BTS stations each year.
TowerCo – Investing in telecommunication infrastructure rental – is a business model where independent units invest in telecommunication infrastructure (BTS stations, fiber optics, in-building systems, energy systems) and then lease them to network operators. Network operators such as Viettel, Mobifone, Vinaphone… can rent from TowerCos instead of having to invest in telecommunication infrastructure themselves, helping to reduce costs and focus resources to improve service quality.
The investment in BTS stations by the Viettel Group companies is noted in the context of Vietnam actively deploying 5G coverage. Recently, the Ministry of Information and Communications has approved a plan to auction the use of 5G frequency bands. The Ministry of Information and Communications requires that after 2 years from the date of obtaining the business license, the company must commit to deploying a minimum of 3,000 5G BTS stations and providing services no later than 12 months from the date of obtaining the license. The auction of 5G frequency bands will be the basis for the telecommunication market to explode, increasing the demand for large small cell stations with distributed densities across the country to ensure coverage areas.
Especially, because the nature of 5G networks requires high speed, the building distance will need to be shortened, leading to a larger number of 5G stations. Therefore, the revenue of Viettel Construction is expected to increase not only from investing in the construction of 5,000 new BTS stations but also from the construction of telecommunication infrastructure for the Viettel Group and other domestic network operators.
With the successful auction of the right to use the 2,500-2,600 MHz frequency bands on March 8, 2024, SSI Research forecasts that the total number of BTS stations of Viettel Construction will reach a 70% growth compared to the same period in 2024, benefiting from the shutting down of 2G frequencies and the deployment of 5G, which can support a 53% increase in infrastructure rental revenue compared to the same period. In the long run, this analyst predicts that the profitability contribution from this sector can be even higher.
Targeting billion-dollar revenue by 2030
In addition to investing in BTS stations, Viettel Construction’s Infrastructure Investment sector also invests in fiber optics, DAS and solar energy. With the amendment of the Electricity Law and the Renewable Energy Law in 2024, Viettel Construction will have increased investment opportunities. In 2024, the country will allocate VND 657,000 billion for public investment, of which capital for developing transportation infrastructure accounts for the majority, reaching VND 422,000 billion. This is an opportunity for Viettel Construction to expedite the progress of investing in underground cables along the North-South highways.
Viettel Construction’s investment activities are considered effective by the Telecommunications Infrastructure Corporation, which specializes in providing integrated services from consulting, design, project construction, operation, and investment. By optimizing costs during the implementation process, Viettel Construction can quickly recover its investment capital.
Viettel Construction expects that the increasing development of transportation and energy infrastructure will accelerate the company’s growth. It is predicted that by 2030, the rental infrastructure investment segment of Viettel Construction could reach over VND 2,000 billion, contributing to the milestone of billion-dollar total revenue.
In 2024, Viettel Construction sets its target for consolidated total revenue to exceed VND 12,653 billion and pre-tax profit of VND 671.4 billion, which are growth rates of 10% and 4% respectively compared to the performance in 2023. In the first two months of 2024, the company estimates a revenue of VND 1,703 billion and a pre-tax profit of VND 94.3 billion, representing an increase of 9% and 6% respectively compared to the same period in 2023. With the achieved results, the corporation has completed 13% of its total revenue plan and 14% of its annual profit target.
