Myanmar's first non-government phone carrier, Ooredoo, goes live

The Qatar-based phone company is the first to open for business since the Asian country's military dictatorship dissolved three years ago.

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Hordes of customers descend on an Ooredoo dealer in Yangon, Myanmar. Myint Lwin Oo

Ooredoo, Myanmar's first non-government linked mobile carrier, went live this past weekend in three of the Asian country's major cities, Yangon, Mandalay and Naypyidaw. It was a highly anticipated launch for both the Myanmar people and telecoms industry watchers alike, as fewer than 10 percent of the rapidly developing country's 61 million people own a mobile phone.

It's a huge market, especially when compared to more developed countries in the region, such as Singapore and Hong Kong, which have a mobile penetration rate of over 150 percent. Comparable countries like Bangladesh (69 percent), Vietnam (79 percent), and Ethiopia (21 percent) far outstrip Myanmar's mobile rate.

So the opening up of the market since the end of the country's military dictatorship three years ago presents a huge opportunity for tech companies -- and Ooredoo is already upsetting the country's incumbents with its aggressive pricing and marketing strategies.

A mobile carrier based in Qatar, and one of the four mobile network licensees in Myanmar, Ooredoo has been moving fast. To help generate buzz ahead of going live, the company has given phones with free mobile data for the life of the device to selected local celebrities and VIPs, and to the mobile shops that have signed on to be its retailers. So far, around 6,500 dealers have signed up with Ooredoo as dealers.

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This phone comes with an unlimited voice and data SIM card. Michael Tan/CNET

Some partners started to sell Ooredoo SIM cards even before the network went live on August 2. Sales were reportedly brisk as reports quoting unofficial sources say dealers depleted almost their entire inventory of SIM cards within minutes. Mobile Mother, one of the largest mobile chains in North Myanmar, reportedly sold out its 1,000-SIM inventory in less than a day.

Ooredoo has fixed August 14 as the date of its commercial launch in Myanmar, with the period until then acting as an "open beta test" as the network undergoes its final preparations and optimizations.

Shaking up the market

Ooredoo's opening salvo is to severely undercut incumbent provider Myanmar Postal and Telecom (MPT). Ooredoo charges $0.025 per minute for calls between Ooredoo users -- half the price of MPT -- and $0.035 per minute for calls to mobiles on other networks. Starter SIM cards sell for $1.50, with that much stored credit, and 20MB of free data.

During the launch phase Ooredoo will offer 900 free minutes of voice calls within the same network (90 free minutes to other networks) and 20MB of data per day, and will not count Facebook against that data allocation. Compare that with MPT's current rate of $0.004 per minute of data connection, which has the effect of forcing MPT mobile users to toggle data on and off countless times per day.

Ma Myo, a housewife living in Yangon, is impressed with Ooredoo's deal. "I just had a baby and my husband will be travelling back to Singapore to work," she said. "But now, he can save on the callback cards which charge $0.20 a minute, because with the 3GB Ooredoo data plan I want to buy, he can call me anytime and see the baby too. We'll try which is better, Hangouts or LINE, but hopefully the Internet is enough for video."

Teething problems

Ooredoo's launch has not been without teething problems. Users have complained on social media and in local newspapers about the unstable service quality and perceptions that the per-MB data charges are expensive. A group of nationalist Buddhist monks has called for a boycott of the network, on the basis that the company is based in Qatar, a majority Muslim country.

Even so, Ooredoo is confident that service quality would be satisfactory on the official launch date.

"By August 15 we will deliver high definition voice calls, stronger signal and fast Internet everywhere we have coverage," said Ross Cormack, CEO of Ooredoo Myanmar.

That Ooredoo will charge for data by usage rather than connection time is a big deal for Myanmar. Mobile users in the country will finally become always-on, allowing messaging apps like Viber -- Myanmar's favourite VoIP and messaging app -- to work as they should. Previously, users had to make a voice call to request the recipient turn on their data connection before they could use Viber together.

More competition to come

While all connections are 3G at the moment, Ooredoo is widely expected to roll out a 4G network in 2015.

The incumbent MPT may not be standing still for much longer. Expecting stiff competition from newcomers, MPT got a financial boost when Japanese telecoms giant KDDI and trading house Sumitomo have pledged to invest $2 billion for half of MPT's mobile network profits. This new partnership seems to be moving fast too -- KDDI/MPT is expected to roll out new price plans this month to compete against Ooredoo.

Telenor, a Norwegian carrier, is widely expected to launch SIM cards in September, having won the second license allocated to international firms. Plans for a fourth licensee, Yatanarpon Teleport, are as yet unclear, but they promise attractive plans to differentiate themselves.

MPT has connectivity in small villages and towns, making these still captive audiences, while Ooredoo can currently only be used in a few major cities.

Mobile phone makers, led by Huawei and Samsung, expect to sell many more phones in Myanmar this year, while gray importers are negotiating to offer the heavily rumored iPhone 6.

About the author

With his grandpa building a tapioca processing plant from scratch, and his dad an engineer, Michael just can't escape his genetic predisposition for tech. Besides being a trained lawyer, Michael runs his own tech distributorship and enjoys flying his fleet of quad-copters in his spare time.

 

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