Telenor and Ooredoo's entry into Myanmar helped drive up mobile subscriptions by 87.4 per cent year-on-year to 10.7 million at end-September 2014, and pushed up mobile penetration to 19.9 per cent from 12.5 per cent at end-2013, global analyst firm Ovum revealed.
According to the company's latest forecasts, mobile subscriptions will grow at a CAGR of 21 per cent to reach 38.5 million at end-2019, up from 14.8 million at end-2014, as operators expand their networks to new cities and rural areas.
"The major factors driving mobile subscriptions have been the availability of SIM cards and the massive decline in SIM prices and call rates," said Ovum analyst Vivek Roy.
Ooredoo and Telenor have priced SIM cards at MMK1500 (€1.37/$1.50), with local voice calls costing MMK25 per minute and SMS costing MMK15 per message. The arrival of the new players has also forced incumbent operator MPT to slash calling rates to remain competitive: MPT has cut rates from MMK50 per minute to MMK25 per minute, with SMS rates cut from MMK25 to MMK15 per message.
In August last year, Ooredoo launched 3G networks in three of Myanmar's key cities--Mandalay, Nay Pyi Taw, and Yangon--and was quick to expand, with mobile services reaching 78 cities and towns by the end of September, providing coverage to 14 million people, Ovum noted.
In the same month, Telenor launched 2G and 3G mobile services using 900 MHz and 2100 MHz spectrum, respectively, in Mandalay and moved toward the metropolitan hubs of Nay Pyi Taw and Yangon in October.
Ovum commented that before the liberalisation of the mobile market in Myanmar, the availability of SIM cards was limited by government control, and SIM prices were incredibly high--certainly beyond the reach of average citizens.
"Evidently, the rationalisation of mobile service pricing was expected as Myanmar opened up its market to new competition, but operators should refrain from price wars and look to improve profitability in the short-to-medium term by differentiating their services via adding more value and features," Roy said.
Over the next five years, Telenor and Ooredoo have committed to providing mobile connectivity to 90 per cent and 97 per cent of Myanmar's population, respectively, and with around 70 per cent of the population currently residing outside of urban areas, heavy investments will need to continue.
"Subscription growth will be healthy, as we see CAGR of 21 per cent through 2019," added Roy. "However, boosting data usage and figuring out the right rural strategy will be key in driving profitability through the long term."
- see this Ovum release
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