Myanmar recently celebrated its five-year anniversary of liberalisation in the telecom market, changing from monopoly structure to competitive landscape of five operators; from 13 per cent penetration to more than 124 per cent; from a market dominated by 2G to one where 5G trials are taking place; and from a Greenfield market to one approaching maturity.
This phenomenal transformation is certainly worth discussing and exploring.
At the end of 2013, more than 120 countries around the world registered penetration of more than 100 per cent. That same year, Myanmar, a country more populous than many of these markets, had a penetration level of merely 13 per cent (see chart, below, click to enlarge), served only by the monopoly operator (MPT). SIM cards were sold through a lottery for more than $240 each, for a mobile network which was frequently jammed.
Ripe for revolution, the inflection point finally came when the Burmese government, to increase the country’s tele density to between 75 per cent and 80 per cent by 2016, invited non-domestic players into the market.
Telenor and Ooredoo won licences and they launched their services in the third quarter of 2014.
Let us first look at what market looks like today:
What brought about rapid transformation?
Let us look at what the operators in the market did (or rather did different) to bring the market up to scale in such a short period.
While MPT still commands the biggest market share of 40 per cent in terms of connections in the market, it raises the question of why MPT quickly lost ground to the new operators after holding a monopoly?
Beyond the provision of basic telecom services, however, new entrants tried to carve unique propositions. Where Ooredoo focused on faster mobile internet, Telenor focused on the digital payments sector with its launch of Wave money (a mobile money service) in 2016. In the nine months to end-September, the service had more than 11 million customers, who remitted around $2.8 billion (equivalent to approximately 2 per cent of the country’s annual GDP for 2018).
The result? Both operators have been succesful at maintaining positive double-digit EBITDA margins with Oordeoo at 33.7 per cent and Telenor at 52 per cent in Q3 (see chart, below, click to enlarge).
What operators now need to consider for long term growth?
Myanmar has come a long way in the transformation of its telecom landscape. The market is entering the phase where contribution from core telecom services is stagnating and operators need to explore different perspectives for a long term growth.
Focus on data offerings and network expansion:
While the overall penetration of MBB-capable connections in Myanmar is high (98 per cent), the actual penetration of unique mobile internet subscribers is still low at 40 per cent, clearly highlighting the untapped potential. Moreover, there is demand from the end-customer indicated through the increase in Telenor’s average monthly data usage from 2.7GB at the end of June 2019 to 3.5GB by September 2019.
New operators entering the market from 2018 (MyTel and Ananda Infinity) are clearly trying to tap this opportunity with regualtory support: MyTel was allowed to offer its services at 70 per cent below the minimum tariff specified by the regulator in the Tariff Regulatory Framework, for a fixed period of three months, helping it to attract 1 million subscribers within ten days and 2 million within a month of its nationwide network rollout. Ananda, on the other hand, also kicked off operations by offering data-heavy plans, further intensifying competition in the market.
Shifting market sentiments also provide a boost to operators’ 5G plans. While Telenor is working with Ericsson to prepare its network for the technology, Ooredoo and MyTel have already conducted tests for 5G network with a range of use cases. MyTel’s CEO even announced they aim to launch commercial services in 2020, based on the timing of an auction of 5G spectrum.
Diversify revenue base:
With the launch of MyTel and Ananda Infinity, Myanmar is now a highly competitive mobile market. And yet, GSMA Intelligence forecasts revenues to remain stable for next few years at around $2 billion. As a result of such stagnation, operators need to start seeking new revenue streams.
And we are seeing operators do just that. For instance, seeing the potential of mobile money services being offered by Telenor (Wave Money) and Ooredoo (M-Pitesan), MPT announced (in March 2018) plans to launch its own mobile financial services, for which it has received the licence in October 2019.
This mirror operators in other regions which are exploring revenue opportunities in adjacent services including convergence, IoT, pay-TV, media and the broader universe of digital services.
The bigger dynamic here, however, is one of evolution, from greenfield to fairly competitive to highly competitive, and the questions that come with it. How will operators remain competitive in long term? Is consolidation round the corner? Will adjacent services be competitive. What lessons are there for other markets in transition?
Beyond any history lesson about mobile services in Myanmar, the future is what’s most interesting as the market moves into maturity.
– Ankit Sawhney – research manager – and Charu Paliwal – team lead, GSMA Intelligence
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.Subscribe to our daily newsletter Back