Vietnamese telco Viettel, aiming to be licensed as part of a joint venture that should become Myanmar’s fourth mobile operator, says its partnership with a local consortium and a government-owned company could invest US$1.5 billion and would rely at first on 3G technology.
The Hanoi-based and military-controlled company has been selected as the most likely foreign partner for the joint venture, which will include Myanmar National Telecom Holding Public Limited, consisting of 11 local companies, and state-owned Star High Public Company Limited.
“This strong foundation ideally positions us to cater to the untapped telecom market potential in Myanmar,” Viettel’s deputy general director Le Dang Dung said in a statement in Vietnamese quoted by Reuters.
The company’s networks will rely on 3G technology, with 4G services on the way pending the availability of spectrum. The move straight to 3G services differentiates Viettel from two of its competitors – state-owned Myanma Posts and Telecommunications (MPT) and Norway’s Telenor – which offer both 2G and 3G coverage. Ooredoo of Qatar went 3G-only starting from its launch in August of 2014.
Viettel’s strategy also reflects the huge data demand in the Myanmar market. The sector’s mobile operators say a majority of their users are on smartphones, with Ooredoo reporting in March a five-factor uptick in data usage since its launch. Meanwhile Telenor estimated at the end of last year more than 60 percent of its base used smart devices, compared with 80-90pc on MPT’s network.
Competition – already thick on the ground – may only get more intense once the fourth operator makes its debut.
“In a market where Telenor and Ooredoo are winning market share, the new entrant [will be] expected to offer generous usage quotas and freebies – voice, SMS, data and even content – to win and retain the user’s mind and wallet share,” Avinash Sachdeva, a Frost and Sullivan senior industry analyst for ICT, wrote last month.
“[It] missed the exponential growth period when the mobile market opened up for the new operators. They need to act smart and play catch-up, and it’s going to be quite daunting.”
The deal has yet to be sewn up, however. The telecoms regulator, the Post and Telecommunications Department (PTD), has not received an official application for the licence as joint venture talks are continuing.
However Mr Sachdeva thinks chances are good the companies will link up.
“There is a high possibility of the successful JV being established through the final negotiations, as the entire process went through the two different stages of evaluations and all the associated entities would have done their business assessments after exploring all the pros and cons,” he said.
From: Myanmar Times