Qatar’s mobile phone major Ooredoo has made a great and successful step forward in expanding its reach in Asean by picking up a mobile phone licence in Myanmar, a country seen as the last frontier for this industry and thus guaranteeing high rewards.
It seems that Ooredoo has made a very generous offer to the Myanmar government by pledging to invest no less than $15bn into a complete 3G rollout in a country where just 4 out of 100 people are currently using mobile phones.
It is very likely that the investment will pay off over the 15-year licence period, and certain turbulences surrounding the successful award will also quickly cool down.
The landmark win of the tender underpins Ooredoo’s presence in the Southeast Asian market and will quickly establish the new brand as a household name. The company, through its recent investment into Indonesia’s mobile phone provider Indosat, has already grown its customer base to 58.5mn. Ooredoo is also an active investor in Starhub, Singapore’s leading integrated communication provider, has also invested in LTC, the incumbent fixed and mobile network provider in Laos, and also cooperates with a broadband network provider in the Philippines.
With the Myanmar engagement and continuous expansion in the region, observers feel that Ooredoo’s customer base in Southeast Asia could easily grow to about 100mn subscribers over time, with Myanmar being the key market in the region.
However, Ooredoo will now have to build up its network in the country literally from scratch. The company is, together with the winner of the second licence, Telenor, contractually obliged to start operating a mobile phone network within nine months and connect one quarter of the population to mobile services within a year. By 2018, three-quarters of the country’s citizens are expected to have access to the network. If either of the two firms fails, the Myanmar government said it has France’s Telecom-Orange and Marubeni Corp of Japan as a “back-up option”.
One thing where Ooredoo might have to adjust its marketing strategy to local animosity is that certain members of the Buddhist religious community in Myanmar have voiced reservation towards a company coming from the Middle East. However, this should be rather seen as a challenge than a problem and Ooredoo can certainly prove that successful business expansion will quickly overcome irrational concerns of a small minority.
*Do you think Ooredoo’s step into Myanmar will pay off? Should the company continue its successful expansion drive in Southeast Asia? Let us know through Twitter: @insideinvestor using hashtag #gulftimes.
*Our columnist Dr Arno Maierbrugger is Editor-in-Chief of www.investvine.com, a news portal owned by Inside Investor focusing on Southeast Asian economic topics as well as trade and investment relations between Asean and the GCC. The views expressed are his own.