Competition among telcos leading to better pricing in Myanmar

After emerging from state-owned monopoly, Myanmar’s telecommunications sector is now a growing market for four competitors: state-owned Myanma Posts and Telecom (MPT), Norway-based Telenor, Qatar-based Oredoo, and MyTel, a partnership of local and foreign entities.

The number of mobile-phone users in Myanmar now totals 56.8 million. Of this number MPT has 22 million subscribers, Telenor 19 million, Oredoo 9 million and MyTel 3.2 million.

“After new operators entered the market, competition increased and brought with it advances and changes,” said Ko Moe Thura, deputy general manager for MPT’s Corporate Communications Department.

MPT monopolised the telecoms market in Myanmar until the government under the presidency of U Thein Sein granted permits to Telenor and Ooredoo to do business in the country.

The Directorate of Telecommunications selected Telenor and Ooredoo to conduct telecom operations and services on June 27, 2013 and gave out the working licences in February 2014.

When Ooredoo and Telenor started selling their prepaid phone plans and SIM cards, people were purchasing them frantically. People, unsatisfied with MPT’s services, were curious and excited about what the two new operators had to offer.

For many years before the entry of the new service providers, MPT charged for local calls at K50 per minute and K25 SMS per message. However, after launching their services, Telenor and Ooredoo charged K25 per minute for local calls and K10 for SMS. Moreover, their internet data rates were also lower.

The Ministry of Transportation and Telecommunications granted operating licences to Telenor and Ooredoo they bid US$500 million and US$1.05 billion, respectively for 15-year contracts for telecom development in the country. The newest entry MyTel, owned by Myanmar National Tele & Communications (MNTC) Co, was set up in January this year after bidding US$300 million.

Mytel is a partnership between Vietnam-based Viettel Co and Myanmar National Telecom Holding Public Ltd, a consortium of local firms and Star High Co owned by the Ministry of Defense.

The telco is jointly owned by Myanmar National Telecom Holding Public Co Ltd with a 23 percent stake, Star High Public Co Ltd with a 28pc stake and Viettel Global, which holds the remaining 49pc.

“It is important for the government to set up an independent regulatory organisation to oversee the telecoms sector in the country as two of the four service operators in the country are tied to the government,” said U Tint Naing Tun, head of corporate communications for Ooredoo Myanmar.

“It doesn’t matter who owns the service provider. We fall under the same regulations and do not receive preferential treatment beyond being able to use some of the cell towers set up by the Myanmar Economic Corporation,” said U Zaw Min Oo, chief external relations officer for Mytel.

Telcos in the country are required to follow the regulations set out by the Department of Post and Telecommunications if they offer promotion programmes. Although the Department of Post and Telecommunications only allows service providers to discount their service charges up to a maximum of 40 percent, it is allowing Mytel to reduce its charges up to 70pc for the time being as it is new to the market.

“We cannot keep up (with other service providers) in infrastructure because we are less than a year old,” said U Zaw Min Oo.

“Telecommunications in Myanmar is rapidly improving and regulations are needed to create level playing field. We would also urge the government to set up a free and independent communications commission to approve new cyber security regulations as soon as possible,” said Telenor Myanmar’s CEO Mr Sharad Mehrotra.

While the four service providers are competing for customers through price discounting, some people say they would prefer the telcos also think about improving their services while also competing on price.

“As the number of operators has increased to four in the country, the market has become more competitive now. But other countries have also seen examples of fierce competition leading to disrupted markets. I hope the telcos give best services to the people while competing fairly with each other,” said the Department of Post and Telecommunications Director General U Soe Thein at Myanmar Connect 2018 telecoms industry conference in September.

Source: Myanmar Times

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