Sunday, August 20, 2017

Telcos extend services beyond cities

It is easy to forget the excitement in Yangon, Mandalay and Nay Pyi Taw when Ooredoo and then Telenor launched their services, promising a new era in telecommunications. Already those launches have started to fade from memory.

A monk checks out an Ooredoo SIM card. (Aung Htay Hlaing/The Myanmar Times)A monk checks out an Ooredoo SIM card. (Aung Htay Hlaing/The Myanmar Times)

K1500 SIM cards, quality phone connections and zippy internet are now close to the norm for urban dwellers. But while Yangonites, Mandalarians and residents of Nay Pyi Taw have had the choice of Telenor, Ooredoo and MPT for six months, that is far from the case elsewhere in the country.

Myanmar’s telecoms race is in full swing. Tower companies are rapidly putting steel in the ground further and further from the largest cities, while fibre and microwave links are connected, generators fired up and equipment switched on.

In these regional cities and smaller towns, it is like August or September 2014 all over again. While MPT is already established in most of these places, their foreign competitors are only now reaching areas like Mawlamyine in Mon State, Bago in Bago Region or Hpa-an in Kayin State (see related article below).

This rapid expansion is bringing mobile services to people at an incredible rate. Deputy telecoms minister U Thaung Tin told parliament last month that about 3 percent of the population was connected in 2011, rising to about 30pc at the end of 2014.

Frost and Sullivan telecoms industry analyst and consultant Naveen Mishra said penetration rates are set to keep rising, pointing to regional markets like Indonesia where they are above 100pc.

Industry insiders say there are no signs yet that the pace of the rollout is slowing.

“2014-15 will be the fastest build years,” said Ooredoo Myanmar CEO Ross Cormack. “We’ll double population coverage by the end of the year, which will mean a quadrupling of the number of sites across the country. It’s a huge build this year.”

Both foreign operators previously pointed to challenges in a number of areas, including delays in approvals to put up towers. Mr Cormack said Ooredoo’s rollout is now running much more smoothly. “Everybody’s used to us, we’ve [become] used to dealing with all the requests you get from local communities – and we’re very sensitive to where we build.”

Now that the telcos are switching on towers across the country, they are matching it with localised marketing campaigns to let local customers know they have arrived in town.

“As we go out to new geographies, we bring our messages,” said Mr Cormack in a January interview. “We were in Mawlamyine the other day. We said we are here, we would love you to try out our services, these are the types of services you can expect.”

Mr Cormack said there is something of a “crescendo” of messaging as each new area is switched on.

The firm uses a balance of advertising, which changes depending on the location – mixing in “above the line” advertising, such as advertisements on the streets and in mass media, and “below the line” advertising, such as Facebook, leaflets, electronic media and word of mouth.

Also important is the firm’s PR efforts. It is not shy about highlighting the work it is doing in areas like education, health, entrepreneurial development and women in the communities.

The messaging has also evolved. “In the very early days we were trying broad brush to get branding, to get your messages that you’re here, that we’re about telecommunications,” said Mr Cormack.

While Ooredoo still conducts significant advertising much of its methods have become more focused. For instance, its Mawlamyine launch was accompanied by a large degree of local advertising, such as fliers, T-shirts and giveaways, along with traditional “above-the-line” marketing.

A lot is riding on these rollouts. With Telenor, MPT and Ooredoo, it is a competitive three-horse race – slated to grow if another operator, such as YTP and Vietnam’s Viettel, is able to enter.

The three existing telcos – four if MECTel, a partially army-owned operator, is also counted – all have different strategies.

Analyst Mr Mishra said Ooredoo for instance is using 100pc next-generation equipment, while Telenor is designing its service to follow the gradual evolution of telecoms users from voice to internet.

While there is a lot of pressure to spread service quickly and snap up new subscribers, turning on a network too early – which ultimately disappoints users – is also to be avoided.

Telenor CEO Petter Furberg said he personally tested the network in Hpa-an, the capital of Kayin State, before the firm’s launch in the area. He walked the city, testing the signal in places where there is likely to be high traffic, such as inside the market, to decide if it was ready. Later the same day he visited Mawlamyine and felt more build was required before turning the network on.

Ultimately, Telenor’s launch in Mawlamyine was pushed back by a couple of weeks. It is an approach the firm has used before: Its first launch in September was confined to Mandalay, delaying its Nay Pyi Taw and Yangon launches until October to ensure quality coverage.

Mr Furberg said that early on, people were asking why the firm was so quiet in terms of marketing. “We have been very deliberate in not building up expectations because they were very high [before launching],” he said.

Telenor has targeted the mass market. Mr Furberg said it focuses on customers who previously could not afford to be connected, but now can be because of its lower prices.

“In the beginning it’s all about messaging that we are turning on the network and we are coming with affordable SIM cards and affordable services, internet and voice, and nothing more really,” he said. “That’s pretty much what we can promise today and to start talking about other more sophisticated services, I think we will do as we see the markets have matured.”

In three months to the end of 2014, Telenor signed up 3.4 million subscribers, of which 40pc are daily active data users. MPT’s Takashi Nagashima claimed 11 million active subscribers in a January interview. Ooredoo Group has not yet released figures for the fourth quarter of 2014, though the figure is likely to be in the millions.

Analyst Mr Mishra said within a very short period of time, data use will rapidly increase, driven by customer demand for applications like Facebook and WhatsApp, as well as services for a particular market segment. He pointed to figures from Telenor showing 40pc of its users use data daily as a sign that people are looking to get online.

“If price points are good, we will see a spike in the use of internet,” he said. “Basic connectivity is not there yet, but it is improving.”

While Yangonites and Mandalarians may now be used to the idea of competition in the mobile services marketplace, the majority of Myanmar’s population is still waiting for either a challenger to MPT or their first telco to roll into town.

Which of the three – or four – operators ultimately pulls ahead may depend on any number of factors, but marketing is important to let future customers know that services have arrived.