Price competition in Myanmar may be unsustainable
Myanmar's mobile operators are struggling to remain profitable in the face of heavy price competition, and the entry of a fourth telco threatens to disrupt the market further.
The Myanmar Times quotes the CEOs of both Telenor Myanmar and Ooredoo Myanmar as stating that continuing downward pressure on tariffs is threatening the sustainability of the market.
While both have denied engaging in a price war, they have repeatedly cut rates within a short time of each other.
Both have also expressed concern that any continuing downward price pressure may impede the incentive to invest in infrastructure development in the future.
Rates offered by the operators - as well as the consortium between Myanmar Posts and Telecommunications and Japan's KDDI - are on par with rates in more developed markets with more established infrastructure and a far lower cost of doing business, Ooredoo Myanmar CEO Rene Meza recently commented.
The Myanmar government is meanwhile preparing to allocate a fourth mobile license to a consortium consisting of a number of local companies in partnership with an international operator. The entry of a new player will only place further downward pressure on prices.
Shanthi Ravindran and Glen Ragoonanan/Analysys Mason
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