In an effort to further strengthen a formidable telecoms sector, the Posts and Telecommunications Department – under the Ministry of Transportation and Communication – granted a fourth mobile operator licence to Myanmar National Tele & Communications in January 2017 following a period of negotiations. With an initial investment of $2bn, the new player launched operations on February 12, 2018 under the brand name MyTel.
The terms of the new mobile licence largely mirror those given to the county’s two other major service providers, Telenor and Ooredoo, and will be valid for a period of 15 years with an additional 10-year extension option. The recent entrance of a new operator is expected to bolster an already competitive marketplace, and potential customers are hoping for even more competitive prices and increased network coverage. After the official granting of the licence, U Zaw Min Oo, CERO of MyTel, told local media, “We expect it will take about one year to prepare the services. It may be quicker as a result of sharing basic infrastructure.”
Stakeholders
The largest shareholder in the MyTel brand is the Vietnamese military-backed Viettel, with a 49% stake. An additional 11 local companies will hold a combined 22% in the venture, while the remaining 29% is to be held by Star High Public Company, a subsidiary of the domestic military-run Myanmar Economic Corporation.
Through its partnership, MyTel is set to benefit from access to the Myanmar Economic Corporation’s existing infrastructure. MECT el, the Myanmar Economic Corporation’s CDMA network operator, had a reported 3.8m subscribers in mid-2015. As of early 2018 it still appears uncertain whether MECTel’s client base will be transferred to MyTel, though various media reports suggest the new operator is to leverage the existing assets of MECT el, including around 1000 towers and over 13,000 km of fibre.
Potential Impact
With much of the heavy lifting already completed by the existing three operators, MyTel will face fewer logistical constraints than its competitors. However, capturing a sizeable piece of the already mature market remains a major challenge. As of August 2017 MyTel had already employed 2000 staff members at branches nationwide, and reportedly plans to expand operations into 10 countries. According to local media reports, the firm aims to offer roaming to Vietnam, Laos and Cambodia at prices equivalent to local charges.
While focusing on rural coverage, the company has set out to achieve nationwide coverage within the first 12 months of operation, hoping to extend that to 95% of the population within the first three years of operation. In contrast to its competitors, the new player jumped straight to 4G broadband coverage when the company went live, leapfrogging over the older and slower 2G and 3G technologies that other operators have made use of. Similar to Ooredoo and Telenor, however, services are broadcast over the 900-MHz, 1800-MHz and 2.1-GHz spectrum bands. According to local media reports, to assist in the goal of doubling mobile internet speeds to an average of 3 Mbps for all users, the firm will connect to the Asia-Africa-Europe 1 submarine cable, while paying access fees to the state-run Myanma Posts and Telecommunications.
In accordance with various media reports throughout 2017, MyTel officially launched on February 12, 2018 after receiving its licence from the government one month earlier.
This development is certain to increase pressure on existing telecoms providers to control costs in an already competitive environment. A key factor determining the success of each provider will be each firm’s ability to lower production costs while charging competitive prices to meet the demands of Myanmar’s price-conscious consumer base.
Read More from OBG
