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Business

Foreign providers, price competition spur growth

Ads by foreign mobile operators such as Ooredoo are popping up in Yangon, Myanmar's largest city.

YANGON -- Myanmar's market for mobile phone services is expanding at a blistering pace as recently arrived foreign providers continue slashing prices in their quest for more customers.

     The number of subscribers to cell phone services in Myanmar, a country with more than 50 million people, will climb steadily in the coming years, according to U.K.-based market research company Ovum. The company forecasts that by the end of 2019, the country will have 38.5 million subscribers, 2.6 times the total at the end of 2014.

Growth spurt

The number of mobile subscribers stood at 10.7 million at the end of September 2014, up some 87% from the end of 2013. The country's mobile penetration rate, rose from 12.5% to 19.9% during that period.

     During the decades of military dictatorship, the market was monopolized by state-owned operator MPT. Since the summer of 2014, however, Qatar-based Ooredoo and Norway's Telenor have been allowed to offer wireless services in the country.

     These foreign players have adopted aggressive pricing strategies to quickly cement their market position, selling SIM cards at one-hundredth the going price and offering lower fees for voice services.

     This has created a trend among consumers in major cities like Yangon, Myanmar's largest, to own more than one handset. Doing so allows them to switch phones according to their usage and which carrier is currently offering the best rates.

     Ooredoo and Telenor are also racing to expand their wireless networks in Myanmar, with both companies announcing plans this year to develop their infrastructure.

     Ooredoo aims to raise the coverage ratio of its mobile service to 80% of the population by the end of this year. Telenor's target for this year is an area coverage ratio of 90%.

     The government, which has set a goal of boosting the nation's mobile penetration rate to over 80% in 2016, will likely support the infrastructure development plans of the two foreign carriers through various measures, such as simplifying the approval process for building new base stations.

     The country's largest Internet service provider, Yatanarpon Teleport, is also seeking to enter the mobile service market through a joint venture with Vietnam's Viettel Group.

     Competition from newcomers will further accelerate the growth of the market.

Expanded services

Inspired by the rapid growth of the country's mobile market, major wireless service operators are also preparing to offer mobile financial services.

     Telenor plans to team up with Yoma Bank, a leading financial institution in the country, to roll out a mobile banking service in September. The Norwegian company is considering offering remittance and payment settlement services using mobile phones, and it has already begun talks with Myanmar's central bank for regulatory approval.

     Since entering the country's mobile service market in the summer of 2014, Telenor has been competing fiercely with Ooredoo and MPT for customers. Telenor hopes offering financial services will help it attract more customers.

     Four local banks already offer mobile banking services in the country.

 

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