Myanmar’s telecoms sector became one of the fastest growing in the world since it was opened up to foreign competition in late 2013, when Norway’s Telenor and Qatar’s Ooredoo won mobile licences to compete alongside state-owned incumbent MPT.
The country had roughly 51 million mobile connections at the end of last year, up from around 15 million two years ago, with SIM penetration now nearing 70 per cent.
However, the heady growth of 2014 and 2015 is over. Last year the three operators added a total of 13.1 million subscribers compared with 22.5 million additions in 2015, according to Q4 figures from GSMA Intelligence. Quarterly net adds dropped from five million in Q4 2015 to 2.6 million last quarter.
Ooredoo Myanmar was the only operator to sign up more subs in 2016 than the previous year (3.8 million versus 3.6 million in 2015). Telenor Myanmar added just about half the 10 million subs that it picked up in 2015, and MPT’s net additions fell to four million from 8.6 million in 2015.
Declining subscriber growth can be expected as mobile penetration rises, particularly as it starts to reach saturation. However, a drop from a 2.5-times increase in 2015 to 35 per cent growth last year is undeniably dramatic.
Markets shares stabilise
In addition to slowing growth, the three operators’ market shares have started to flat line.
MPT, with 22 million mobile connections, saw its market share drop from 100 per cent in Q2 2014 to 43.5 per cent last quarter, the GSMA Intelligence figures show. However, over the past two quarters its market share ended its free-fall, declining less than 2 percentage points – between Q2 2014 and Q2 2016 its share plunged 55 percentage points.
Meanwhile, Telenor’s market share held steady at the 37 per cent to 38 per cent level since the beginning of 2016. It picked up nearly 19 million customers since its entry. Number three Ooredoo’s market share also stabilised at between 17 per cent and 18 per cent since Q2 2016, and it ended the year with 9.6 million connections. Its stronger subscriber growth can be attributed to its lead in LTE, with some 4.6 million 4G users accounting for 48 per cent of its user base and 95 per cent of the country’s 4G subscribers. Telenor’s 4G user base stood at just 200,000 customers and MPT is yet to launch LTE service.
The fact that the newcomers are no longer taking much share from the incumbent isn’t good news for Vietnam’s largest operator Viettel, which plans to build out a nationwide 3G network in Myanmar. Early last year it was named the foreign partner for a local consortium awarded Myanmar’s fourth mobile licence. The consortium plans to invest $1.5 billion to roll out a network in the 900MHz and 2.1GHz bands.
Military-run Viettel said last April it aims to reach nationwide coverage within the first year of operation and extend access to 95 per cent of the population within three years. The yet-to-be-named telco is expected to receive its licence from the government soon and launch operations right away. Don’t be surprised to see a move to initiate tower sharing, perhaps with MPT.
After the fourth licence was awarded MPT, which signed a joint operating agreement with KDDI and Sumitomo in 2014, announced plans to invest $2 billion over the next 10 years to expand coverage and prepare for more intense competition.
Telenor announced in October it would continue to expand coverage across the country, with plans to add nearly 4,000 towers in the next two years to take its total to more than 10,000 sites.
With a population of 54 million and already 51 million mobile connections, Myanmar is reaching the next phase of its mobile journey – from one of the last frontier markets to a maturing emerging market. Smartphone adoption is at a staggering 70 per cent, as most users are opting for mobile broadband packages when they sign up for their first SIM.
The market Viettel encounters will be very different than the one Telenor and Ooredoo faced nearly three years ago. It’s now all about mobile data. While there may be many similarities between Myanmar and Vietnam, such as laborious regulations, generally poor infrastructure and low ARPU ($4.52 a month in Myanmar versus $5.36 in Vietnam), Viettel’s mobile data experience isn’t exactly world leading – just 40 per cent of its 51 million users in Vietnam have 3G plans and it is yet to launch 4G.
Myanmar’s consumers will certainly be the winner as an additional mobile operator will likely put pressure on already low voice and data tariffs and force the existing players to improve coverage outside major cities.
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.