Telenor Shifts Myanmar Focus to Data Services as ‘Hyper growth’ era ends

YANGON (Reuters) – Norwegian telecoms company Telenor will focus on improving data services in Myanmar, the head of the local business said on Wednesday, as an era of rapid subscriber growth following the opening up of the economy has ended.

The liberalization of Myanmar’s telecoms sector has been a rare example of successful reform since the military ceded power in 2011, with Telenor quickly establishing itself as the No. 2 in the market with 18 million subscribers.

But after a period of astonishing growth in a country which had one of the world’s lowest mobile penetration rates, the fight over customers is shifting to more-lucrative Internet services, fueled by Myanmar’s near-ubiquitous use of Facebook.

“Those who wanted to have a SIM card already have one … The fight will turn into existing customers rather than new, virgin customers who have never had experiences in cellphones,” Telenor Myanmar chief executive, Lars Erik Tellmann, told Reuters in an interview.

“Everyone has jumped into mobile – there’s no fixed line alternatives and very few have PCs while Internet penetration remains extremely low,” said Tellmann. “That explains why everyone is so hungry for their smartphone and their ability to be online.”

Other social media apps popular in Myanmar include Facebook-owned WhatsApp and Viber.

Telenor faces tough competition from Myanmar Posts and Telecommunications (MPT), a state-owned provider that has partnered with Japan’s KDDI Corp to improve its services, and Qatar’s Ooredoo.

Estimates vary, but industry experts say MPT has around 21 million subscribers while Ooredoo has reported 9 million.

Vietnamese carrier Viettel said in April it planned to form a consortium with two Myanmar companies to invest a combined $1.5 billion in Myanmar’s telecoms sector if it won the country’s fourth, and last, telecom license.

Myanmar accounted for 5.3 percent of Telenor’s revenue in the third quarter and was its fastest growing market.

But the company’s average revenue per user in Myanmar, a key industry measure, was down 28 percent to $4 compared with a year earlier, partly because Telenor is now pushing deeper into rural areas where people spend less on mobile services.

“Super hyper growth has flattened,” said Tellmann.

As of the third quarter, around 40 percent of Telenor’s revenue in Myanmar came from data services, Tellmann said, while the remaining 60 percent was from the traditional sources such as voice calls and text messages.

The company has built 6,800 telecoms towers and plans to build an additional 3,200 by the end of 2018.

“The leftover rollout we have is going to be the most challenging and difficult,” said Tellmann, referring to areas controlled by the country’s myriad of ethnic armed groups and where fighting still goes on unabated.

Source: Reuters


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