In the four years since the Myanmar government opened up the mobile industry to outside competition, the nation has experienced an economic revival across many sectors driven, in part, by its vastly improved communications network.
Mobile penetration (based on unique users) jumped from 12 per cent in the middle of 2014 (about the same level as North Korea) to 66 per cent in Q1 2018, data from GSMA Intelligence (GSMAi) showed.
The number of mobile connections increased from 7.6 million in Q2 2014, when state-run MPT was the only player, to 53.7 million at end-March 2018. Smartphone adoption now stands at roughly 71 per cent, up from 10 per cent in mid-2014 when Telenor and Ooredoo rolled out their first mobile services in a few major cities.
Myanmar’s three operators started deploying 4G networks in 2016, but the latest data from OpenSignal showed average LTE download speeds already topped 28Mb/s, more than 11Mb/s faster than the global average. In the wireless data analytics company’s first State of Mobile Networks report for the country (based on data gathered in Q1 2018), Myanmar ranked only a few places behind the US and Russia for 4G download rates.
Ooredoo was the first to launch LTE services in May 2016 and, with 4G accounting for 68 per cent of its 9.1 million connections, is the 4G leader by a large margin (the country’s 4G adoption rate was 18 per cent at end-March).
Two newcomers recently joined to chase an increasingly saturated market, where average ARPU declined by 24 per cent to $3.60 between Q1 2016 and Q1 2018. Telenor’s ARPU dropped 32 per cent during that period, GSMAi data showed.
MyTel, backed by a local consortium and Vietnam’s market leader Viettel, constructed a 4G-only network and officially launched service in early June. It claimed an ambitious 70 per cent population coverage at launch after deploying 7,000 4G base stations and 30,000km of fibre. The operator was awarded the country’s fourth mobile licence in January 2017.
Myanmar, with a population of 53.6 million, represents Viettel’s biggest overseas market (it has interests in operators in ten countries outside Vietnam) and has one of the highest economic growth rates (about 7 per cent).
The fifth player, Amara Communications, acquired 4G spectrum in the 2.6GHz band for $120 million in two regions in late 2016 and kicked off a campaign in Yangon in February to promote its 4G+ data service ahead of a commercial launch in March. The wireless broadband data provider is targeting consumers with unlimited data plans which it says are much less expensive than the four mobile players.
Both new players will face major obstacles in taking market share from the three established telcos.
The one area the new operators will likely aim to exploit is MPT’s limited LTE coverage – estimated at just over 10 per cent by GSMAi despite the operator announcing plans to expand 4G coverage nationwide in partnership with Japan-based operator KDDI in June 2017.
Telenor are Ooredoo have double that percentage, which is still fairly low and an opportunity for the newcomers.
After its initial launch in Yangon, Amara, wisely, is targeting rural areas where the others’ coverage is limited compared with their urban footprints. It plans to launch data-only SIM cards.
Military-run Viettel said it is looking at Myanmar to drive strong growth. But if you look at its experience in Cambodia, which also has five players, the future could be bleak for the entire market.
Its mobile unit Metfone, with a 39 market share in Cambodia, focused on cutting prices when it entered in 2006 to gain share. Veon (then Vimpelcom) rolled out service in 2009 under the Beeline brand and four years later, after incurring heavy losses to acquire just 1 million subscribers, sold out to its local partner. Viettel acquired Beeline in 2015. Interesting to note GSMAi data shows Metfone’s 4G network covers only 52 per cent of the population two years after launching LTE service.
Whatever strategy it takes in Myanmar, any wins will be hard fought. Incumbent MPT’s market share actually increased nearly 2 percentage points since early 2016 to 48 per cent at end-March, while Telenor and Ooredoo’s both slipped slightly to 35 per cent and 17 per cent respectively.
More important than market share, at some point, will be profitability. With five companies scrambling for subscribers and investing heavily in nationwide coverage, the impact on ARPU is likely to be severe for the foreseeable future.
(Updated 2 July to clarify Amara Communications offer)
The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.