The gap between international operator Ooredoo and its rival Telenor has widened again this quarter, with Ooredoo reporting less than half the number of subscribers secured by the Norwegian operator over the same period.
Ooredoo and Telenor, which recently announced financial results for the second quarter of 2015, have been locked in fierce competition, along with state-owned incumbent Myanma Posts and Telecommunications (MPT) in a battle for users across the increasingly connected country.
Ooredoo said in a July 29 press release it had racked up 4.3 million Myanmar customers by the end of June – representing an increase of 1 million users over the previous quarter. The firm had earlier added 1.1 million subscribers in the first quarter of 2015.
Meanwhile, Telenor’s second quarter subscription count came to 9.5 million at the end of June, up from 6.4 million the quarter before. Its base total has since crossed the 10 million mark.
Telenor’s swift growth in users accompanies an almost 50 percent jump in revenues from the firm’s Myanmar operations. Telenor Myanmar’s total intake increased from NOK 768 million (US$94 million) in Q1 to NOK 1.1 billion ($140 million) in Q2.
On the other hand, Ooredoo Myanmar’s revenues increased 16pc from quarter to quarter, up from QAR 236 million ($65 million) in Q1 to QAR 274 million ($75 million) in Q2.
A recent report from Swiss bank UBS labelled Telenor the market “outperformer” and attributed its success to factors including distribution and wireless strategy.
Telenor has acted as price leader for data in Myanmar, though competitors Ooredoo and MPT have winnowed its lead, according to the UBS report. Telenor lowered the price for its standard service My Internet from K6 per megabyte to K5 per MB, on the same day that Ooredoo cut its data rates from K10 per MB to K6 per MB under its Phalan Phalan internet plan.
“Telenor’s prices will always be the lowest for the mass market,” said CEO Petter Furberg in a statement at the time.
Both firms predicted in the first quarter that average revenue per user (ARPU) would drop as the telecos moved out from more well-to-do urban centres. Ooredoo’s ARPU clocked in at about $7 in the first quarter and $6.5 on average for the first half of 2015. Telenor’s decreased from US$6.7 in Q1 to a normalised figure of $5.7 in Q2.
Ooredoo said in its July 29 press release that data usage among its Myanmar users had doubled during the first half of 2015. About 80pc of Ooredoo users are now connecting to the network via smartphone devices, according to CEO Ross Cormack. Meanwhile, Telenor reported 55pc of its customers as active data users.
Ooredoo initially differentiated from competitor Telenor by offering strictly 3G services to customers from launch – a strategy Telenor has since adopted, switching from its mixed 2G and 3G approach, which the UBS report said had helped enable Telenor to provide services to a wider market.
“Although Telenor has said that the 2G/3G combined network has not turned out to be as much of an advantage as it has hoped ... being able to address 2G nonetheless represents a significant advantage, with Telenor noting that only around 60pc of its subscribers have a 3G-capable phone,” the report said.
Both international operators have described their rollouts in Myanmar as testing, particularly during the rainy season. Challenges are likely to increase as they expand further into rural areas and ethnic states.
“There are challenges of reach, of weather, and because of the lack of roads, it’s quite expensive to navigate. You have to be resourceful,” said Mr Cormack in an interview earlier this week. “I love that the electronics are being carried across the flood by buffalo. It’s fantastic.”
Though both firms have faced obstacles, Ooredoo in particular has come up against hostility, because of the company’s Qatari roots, as previously reported in The Myanmar Times.
However, following anti-Muslim rhetoric on social media and calls for a boycott of the company led by nationalist monks, presidential spokesperson U Ye Htut stated that he would use any telecoms provider as long as it provided adequate service.
In an interview earlier this week with The Myanmar Times, CEO Ross Cormack said that the company was aware of the issues and was actively addressing them through dialogue.
“Problems have occurred from time to time but you just have to engage people face-to-face and explain that you’re a professional company working under a licence from the government,” he said.
“We’re an international telecoms business, not a religious institution. We reach out to communities in a number of different ways. We meet the leaders, the opinion formers and of course we visit the monasteries and make donations and receive blessings,” he said.
Ooredoo’s rollout in August began more than a month before Telenor turned on services in Mandalay. The company’s coverage now blankets more than 35 million people, 7 million more than in the first quarter.
Mr Cormack, who has stepped down from Ooredoo Myanmar and will be replaced by Rene Meza – previously of Vodacom – at the end of August, said the firm expects to have around 70pc to 80pc of the population covered and to have a presence in every state and region before 2016.
Mr Cormack’s next move is to the Philippines, where he originally planned to go with Ooredoo to oversee a 4G licence but where he will now head in a private capacity.
– Additional reporting by