Ooredoo Targets Rural Market in 4G Expansion
Over the last two years, Myanmar has emerged as one of the most dynamic telecom markets in the Asia-Pacific region. Mobile penetration has increased from less than 10% in 2013 to almost 90% in 2016. The country already has three licensed operators -- Ooredoo Myanmar, Telenor and Myanmar Post and Telecommunications (MPT) -- but the government has recently issued a tender for a fourth license.
While 2G services were the only option as recently as two two years ago, today all service providers in Myanmar have rolled out 3G/4G networks. However, this also means the market is maturing very rapidly and it will be hard to maintain the current rate of growth.
A subsidiary of the Qatari incumbent Ooredoo , Ooredoo Myanmar was the first operator to launch 4G services in Myanmar earlier this year and is now poised for an expansion into rural areas. CEO Rene Meza answers Light Reading's questions about the company's strategy.
Light Reading: Ooredoo has recently launched 4G services in Myanmar. What has the response been like? How many 4G subscribers do you have? How many subscribers are you hoping to garner in the first year of 4G services?
Rene Meza: A number of mobile users switched to 4G after the launch of the 4G network a few months back because the tariff for 4G is the same as for 3G. Initially our 4G services were launched only in Yangon, Mandalay and Naypyidaw but now 4G is also available in Bagan and we have a total of 4.6 million 4G subscribers.
LR: The Myanmar telecom sector has grown very fast in the last two years. Do you see the growth plateauing out soon? From where is the next growth likely to come for Ooredoo?
RM: The growth plateauing in Myanmar's telecom sector will be based on the quality of the network and service because mobile users' expectations are high. If an operator can't provide attractive service, customers will definitely switch to another. Our growth is improving quarter-by-quarter. We had 8.2 million active customers in the second quarter of 2016 and 4 million active users in the same period last year. Subscriber growth is improving because of our investment in a reliable network with quality customer service.
LR: How do you view the entry of the fourth telecom operator in the country? Do you think that enhanced competition will adversely affect all the service providers?
RM: The telecom industry is a dynamic market and there are a lot of changes and challenges every day. It used to be a monopoly in this industry and customers didn't have the option of choosing a better service provider. The more options we have, the better it is for the people in Myanmar because they will be able to enjoy value-for-money services. We love the challenges of the telecom market.
LR: Do you see a lot of potential in the rural side of the country? What is your rural expansion plan?
RM: Yes, I do. That's why we offer a range of smartphones starting at just 30,000 Kyats [$22.70]. We plan to have 4,500 towers and expand our fiber line-up to 13,000 kilometers by the end of this year. I believe that with this expansion and the use of advanced technology, we will be able to reach the rural side of the country.
LR: Do you have to make an effort to educate the masses about the potential of mobile broadband? Is Ooredoo also making an effort to create an app ecosystem to increase revenue from 4G?
RM: To start with, Myanmar consumers are very well versed in choosing their wireless provider, even though it is only recently that they started having a choice. That said, we have done and continue to do all we can to spread the message of the potential of mobile broadband, an effort we refer to as "digital development." We have made subsidized smartphones available to the people of Myanmar who might not be able to afford them or have not had the opportunity to experience the benefits of Internet access. Through our corporate social responsibility initiatives, we have connected libraries across Myanmar to the Internet and provided various devices to enable tens of thousands of Myanmar people to connect to the Internet for the first time. We will continue to do all we can to fulfill our promise to help Myanmar and its people connect to the better future.
We have also partnered with Huawei to offer 4G WiFi devices and now our customers can have WiFi connectivity in their homes or offices. Therefore, even when ten devices are connected, users will still be able to enjoy superfast Internet speeds. It is one of the first WiFi devices to be able to support 4G technology and is available at very affordable rates to the end customer.
LR: What is the regulatory support you look for from the government?
RM: Much has been achieved to enable the remarkable rollout of our network for the people of Myanmar. That said, there are many policy and regulatory challenges that remain to be addressed. Some of those include the pro-competitive allocation of new spectrum to operators, which is the highway on which our services travel. There is also the creation of an independent regulator and ensuring that all operators are subject to the same rules. We have worked and will continue to work collaboratively with the government to craft a regulatory regime that employs international best practices and ensures that both urban and rural populations are equally able to enjoy a world-class network and services.
— Gagandeep Kaur, contributing editor, special to Light Reading