Competition for Ooredoo heating up in Myanmar
September 29 2014 12:44 AM
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Ooredoo Myanmar, which sold 1mn SIM cards in the first three weeks after its launch, has a target of
Ooredoo Myanmar, which sold 1mn SIM cards in the first three weeks after its launch, has a target of 25mn customers by end-2014

By Arno Maierbrugger

Gulf Times Correspondent
Bangkok

Qatar’s mobile phone giant Ooredoo, which started services in Myanmar in August, is now finally confronted with competition of Norway’s Telenor, the second foreign licence holder on the highly undersupplied mobile phone market in the newly opened country. Telenor announced last week that it launched its services on September 27, almost two months after Ooredoo started to sell its first SIM cards in Myanmar.

Both companies are now battling for market shares in the 53mn-people country where mobile phone penetration is still estimated to be below 10%. They also have to deal with a third player, the country’s state-owned ex-monopolist Myanmar Posts and Telecommunications (MPT), which recently entered a joint operations agreement with Japanese telecom firm KDDI and conglomerate Sumitomo to beef up its strategies against the newcomers.

The fight for a pie of the mobile business cake in Myanmar is expected to become a tough one, especially with regards to pricing. Where, under monopolistic structures, SIM cards in Myanmar just a few years ago could only be afforded by a chosen few at prices of several thousand dollars together with equally overpriced connection rates; they have now dropped to 1,500 kyat apiece, or some $1.50, and airtime for calls is now charged at 25 kyat per minute, a meagre 2.5 US cents, as is data traffic per 1MB download.

The previously unknown competition between the major players in Myanmar’s telecom landscape has prompted some customers to complain that the new rates are still too high and they would wait for cheaper packages offered by the market entrants. Both newcomers are now offering promotions with subsidised mobile phones and airtime or Internet bonus packages.

However, the initial costs to penetrate the maiden market in Myanmar seem to be justified. The country’s Ministry of Telecommunications and Information Technology expects the number of mobile phone users to reach up to 80% of the population as early as next year, while the number of Internet users is forecast to reach 50% in the same period. This means that a large number of previously unconnected people in Myanmar will begin to use voice and data services, start to get acquainted to services such as mobile payments and e-commerce, and millions of consumers will be brought to the Internet.

Some analysts are even predicting that the availability of mobile phones and mobile payments will “revolutionise” the way business is done in the agricultural-dominated economy of Myanmar, with farmers saying that the new phones are saving them “enormous amounts of time and money” when dealing with traders.

Ooredoo Myanmar, which sold 1mn SIM cards in the first three weeks after its launch, said it has a target of 25mn customers by end-2014. Telenor Myanmar CEO Petter Furberg spoke of a target of 9mn customers in the period, and incumbent MPT wants to sell 5mn SIM cards until year-end, which in total requires a customer base for 39mn new SIM cards in the last quarter of the year – quite a big leap from less than a meagre 600,000 mobile phone customers in Myanmar in 2010 – slightly more than 1% of the population – in the last year of strict military rule in the country.

 

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