In a previous FocusCore blog we reported on the telecommunications market opportunities in Myanmar and foresaw another operator would enter. This has now been confirmed as Viettel has received approval to open negotiations with a new consortium of Myanmar companies. If these discussions proceed on plan it is expected the consortium would receive a telecom operator’s licence from the Posts and Telecommunications Department (PTD). They would be the 4th licenced operator in Myanmar.
Viettel Group from Vietnam has in total 80,000 employees, the largest operator in Vietnam, and is wholly owned by the Vietnam Ministry of Defence. Viettel has successfully developed telecommunication services in the Americas, Africa and Asia. Globally the company has stated they propose to invest over $2.23 billion (2015-2017) to bolster overseas expansion.
Viettel is the only telecoms provider operating in some of the remote parts of Vietnam. This may have been an important factor in the negotiations here, as there is impetus in Myanmar to provide better coverage in rural areas. There has been comment on the application fee requested. This being lower than payments provided by other operators, already very active in Myanmar, but notably more active in urban areas.
Other companies had expressed interest in this fourth licence but according to reports they did not file their application by the due date. Viettel will doubtless be hoping second time lucky as efforts to start a service failed in 2014.
The new consortium also includes a subsidiary of the Myanmar Economic Corporation called Star High Public Company, controlled by the Myanmar military. Star High brings thousands of kms of fibre, antenna towers and other infrastructure components that would add to the starting position of the potential new operator.
Reports differ on mobile user numbers already issued in Myanmar. There are certainly many more today, with evidence of 45% of citizens holding one or more SIM cards. The profit potential is lower in rural areas and this is shown as evidence to explain the lower licence fee requested for this project. Once operational, it is hoped there will be improved coverage outside urban areas with also options to subscribe to other telecom services including land line telephony.
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