After the official launch of Ooredoo’s mobile services in Myanmar during August the Qatari company has entered a new market beyond the Middle East and Africa region.
“We’ve pledged to invest $15 billion to develop Myanmar’s telecoms sectors, and plan to cover 75% of the population over the next five years,” said Dr. Nasser Marafih, Group CEO at Ooredoo.
In August 2013, Ooredoo won one of two telecom licenses for Myanmar and, after one year, the company offers its voice calls and internet services in three of Myanmar’s major cities, Mandalay, Nay Pyi Taw and Yangon, and will extend its coverage beyond these three cities to include 68 cities.
On the recent launch, Marafih comments that “the opening results have been phenomenal, with people queuing around the block for an Ooredoo SIM.”
However, some parts of the population have not welcomed the company in the same way, as radical Buddhist monks in Myanmar are urging a boycott of telecoms firm Ooredoo because it hails from Muslim-majority Qatar.
“We believe that technology can truly enrich people’s lives, and Myanmar is a perfect example of how we could help do that. Our service will have a massive impact on the population’s lives – enabling online banking, educational resources, healthcare and entrepreneurial skills to become available 24/7 for the first time ever,” he said to CommsMEA.
Marafih believes that Ooredoo’s presence in Myanmar will have a positive impact on the country’s GDP. “Due to the low mobile penetration rate in Myanmar, we know that roughly 10% penetration could lead to around 1.5% to 1.8% improvement in GDP,” he noted.
The company started to roll out the brand through some of the companies in its portfolio. Kuwait was the latest country to adopt the Ooredoo brand, after the launches in Qatar, Algeria, Tunisia and the Maldives.
“The purpose of transforming into Ooredoo was about much more than just changing our name – it was about taking our business to the next level and creating a new identity that would better reflect our vision to enrich people’s lives,” he said.
When asked about his intention to extend the brand transformation through its company portfolio, Marafih said: “We continue to roll-out the brand across our markets, and have plans in place to introduce the Ooredoo brand in the majority of our markets by the end of the year.”
Ooredoo claims major improvements in these markets, as they have launched Qatar’s first 4G network, alongside 4G launches in Kuwait, Oman, and the Maldives.
“We also launched 3G services in Algeria and Tunisia. In Myanmar, which became the latest Ooredoo operation to go live in August 2014, we had a world first in launching with rolling out a new network using next generation UMTS900 3G technology,” he noted.
The company has also improved its customer experience programmes across every market.
Ooredoo group operates in the Middle East, North Africa and Asia and, in terms of performance, the company has seen its best results in Qatar, Oman and Algeria.
“A major part of our strategy is that we have made sure to have a balanced portfolio of operations, with a presence in core markets that produce high-revenue and emerging markets with the potential for high growth. This has ensured solid returns for our customers, and enabled us to manage risk effectively,” said Marafih.
“In terms of investment, we have continued to target opportunities in areas like the MENA region and South East Asia. Focusing on these areas has enabled us to track opportunities that emerge and fit with our strategy; take on challenging markets like Iraq, Palestine and now Myanmar, and walk away from opportunities if we don’t feel they are right for us,” he noted.
Currently, more than 82% of its revenue comes from outside its home market, Qatar.
Ooredoo reported an 11% drop in second-quarter profit for the group. Marafih said that this decrease in the revenues was because of the currency depreciation, Myanmar start-up costs, investment into Kuwait's recovery strategy and the global brand roll-out.
“We see the latter three areas as absolutely key for the future growth and development of our business, and believe they will ensure strong returns in the medium term. In terms of key revenue drivers, we’re investing heavily in the future of our business – data,” he commented on the results.
Marafih highlights that the reasons to invest in data are straightforward. “Data traffic is growing exponentially, driven by the increasing availability of smartphones and smart devices. Voice traffic and revenues are falling for all companies in our industry, so it’s clear where we need to be to survive and thrive in the future,” he explained.
“We’ve achieved some success in this area. Data was the largest contributor to 2013 revenue growth, with Ooredoo achieving the number one position in mobile data in Qatar, Algeria, Iraq and Tunisia. This was supported by successful 3G launches in Algeria and 4G launches in Qatar, Oman, Maldives and Kuwait,” he continued.
Some operators are facing overtaxation in some countries, making their activity more challenging as they have to face investments to improve their services. Ooredoo claims to face excessive taxation and regulatory fees in many of its operational territories.
“Many countries — and not just those in which Ooredoo operates — view mobile operators as an ongoing source for additional income. Such sector-specific taxation serves to discourage investment and, in addition, is often a disincentive to customers because of the added cost that they must pay for telecom products and services,” he commented.
Marafih also noted another challenge that operators are facing: OTT developers. “There are other players in the telecom sector such as OTT players, which have little or no tax burden. The same concept applies to licence fees which are also often seen as a cash generation mechanism as opposed to a reasonable fee to ensure that the value of a scarce resource such as spectrum is recognised,” he noted.