Telecoms revolution drives parallel surge in Myanmar video streaming growth

The comparatively late flowering of Myanmar's telecommunications industry has led to a surge in the number of over the top (OTT) video streaming services becoming available in the country. And the political and commercial impetus behind digital payments in what is predominantly a cash-based society thus far makes direct carrier billing (DCB) a perfect method of paying for video content transactions and subscriptions.

Myanmar is still classified as one of the "least developed" countries in the world by the United Nations (UN) but a series of political and economic reforms that began in 2011 is steadily improving its status. The country's telecommunications landscape, in particular, has altered significantly since the end of the monopoly of state-owned incumbent Myanmar Posts and Telecommunications (MPT).

Two new MNOs entered the fray in 2013 when mobile phone penetration was estimated at just 13% of the population: Telenor Myanmar owned by Norwegian telco Telenor and Qatar-headquartered Ooredoo (formerly Qtel). Mytel - a joint venture between Myanmar's military and the Vietnamese defence ministry - followed in 2017 alongside Amara Communications' (ACS) which launched a 4G data-only service in 2018. Both were subsidised by favourable commercial terms that allowed them to offer discounted plans well below the Tariff Regulatory Framework. This strategy lowered prices but also precipitated a significant reduction in average revenue per user (ARPU) in the country.

Still, the number of Internet users within a population of around 54m is low compared to other SEA countries - only 41% according to GSMA Intelligence. Despite an 18% increase in total mobile phone connections in 2019 to over 68m (98% are prepaid), the corresponding growth in Internet users was only 4.8%, which may be down to the lack of third (3G) and fourth-generation (4G) mobile infrastructure available outside the perimeter of Myanmar's major cities.

Undoubtedly, mobile internet speeds appear to have stagnated in 2019 (averaging around 24Mbit/s according to Ookla speed tests) as MNOs struggled to expand network reach to unconnected parts of the population in rural areas. And though they still outpaced fixed Internet connections (19Mbit/s), the latter almost doubled their speed last year. That progress has had an inevitable knock-on effect of driving more growth in the volume of web pages served to laptops and desktops (up 24%) compared to a 13% fall for mobile phones in the same period according to figures compiled by Statcounter (though mobile phones still account for a larger 55% of the total).

Yet mobile network bandwidth, coverage and latency are all set to improve in Myanmar over the next five years as the country's MNOs start to roll out their fifth-generation (5G) infrastructure. Telenor Myanmar and Ooredoo have completed limited tests with telecoms equipment manufacturers Ericsson and ZTE respectively while MyTel has outlined plans to launch commercial services using Huawei in 2020 hardware depending on the timing of the forthcoming 5G spectrum auction.

GSMA Intelligence[i] estimates that 12% of Myanmar's mobile phone connections will access 5G infrastructure by 2025, and 67% 4G (up from just 16% in 2017). Within the same timeframe, subscriber penetration is expected to grow from 49% to 60%, with smartphone adoption hitting 79%.

That development should help to drive a parallel increase in subscriptions to all forms of video on demand (VOD) services amongst Myanmar's consumers. Research company Informa, for example, predicts that pay-TV subscriptions will grow 36% between 2019 and 2023, alongside a 140% expansion in the number of fixed broadband customers[ii].

It's estimated there are only 103 cinemas in the entire country, which might leave film fans little option but to find something to watch via the Internet. Video was the third most popular Google search query in January 2020, with VOD provider Channel Myanmar in 7th, according to Kepios Analysis.

The combination of growing consumer interest in Internet video and improvements in the telecommunications infrastructure has attracted numerous OTT video streaming providers into Myanmar over the last four years – both global and regional players as well as local specialists, telcos and MNOs.

Netflix debuted in 2016 as part of its global push, though initial adoption was limited by high US$9-US$17 a month subscription fees and insistence on card payments, the lack of local content and slow fixed broadband speeds. Amazon Prime Video too debuted in Myanmar in 2016, with subscriptions priced at a more realistic US$3 a month. Asian-focussed competitor iFlix is available at US$2 a month, with a small library of local Burmese content, which can be paid for via prepaid cards on local city marts and through its partnership with MPT.

Viu entered the market in 2018 with a promise to include local language subtitles for all of its content sourced from other Asian countries despite issues with fonts. The company partnered with homegrown Internet service provider Myanmar Net to bundle subscriptions with the former's fixed and WiFi broadband services, with associated data packs costing US$1 for unlimited viewing over five days. It has also partnered Telenor Myanmar to offer the telco's customers its premium subscription service bundled with a discounted streaming at 70 US cents per 100 megabytes (MBs). Hulu too is available to consumers in Myanmar priced at US$6 a month (US$10 if bundled with Spotify Premium).

Elsewhere Mahar Movies offers an archive of select Burmese films while Cookie TV is a mobile app for subtitled content which is paid for via DCB/data bundles from the account holders SIM cards. Myanflix is an entirely free online streaming app for a small and select library of Myanmar movies, though new additions are slow to appear.

As well as forging DCB and distribution partnerships with the dedicated players, Myanmar's telcos and MNOs have jumped in with video streaming services of their own. Telenor Myanmar launched WowPlay – stocked with films from Myanmar, Thailand, China and Hollywood - in 2018. Available under both ad-supported and paid subscriptions models, WowPlay also allows users to download movies and watch them offline.

Oreedoo partnered with Eros Now to deliver an OTT video library of predominantly Bollywood content, to subscribers in Myanmar via a third-party platform that orchestrates and manages payments for multiple forms of digital content – including app stores, streaming video and games – from various sources on behalf of the telco, by charging purchases to subscribers' mobile accounts via DCB.

MPT collaborated with SkyNet to deliver its live streaming service on mobile devices for English Premier League football matches in 2019, with the MPT Balltone app free to existing subscribers through additional charges for data packages may apply. And the year before saw metro fibre broadband provider Global Technology Group launch its La La Kyi OTT streaming and VOD platform, delivering local content to connected TVs, tablets and smartphones. TV companies too are vying for a share, with Canal+ Myanmar providing its Conax GO Live multiscreen OTT platform in 2019, enabling viewers to watch pay-TV channels on iOS and Android devices.

The vast majority of people in Myanmar are still not used to paying for goods and services using mobile devices, however. GSMA Mobile Money estimates that only 4% of smartphone owners made online purchases using their smartphones every month for example (the lowest in the SEA region), while just 26% have accounts with a financial institution.

Less than 1% of the country's citizens have either credit cards or eWallets in an economy which is still almost entirely dominated by cash according to World Bank global financial inclusion data. With credit card ownership so low, mobile payments do seem to represent an ideal way for Myanmar's citizens to buy what they want, either through mobile data allowances or SIM card credit balances.

Recognising that potential, three MNOs in the country also offer their own mobile money services, for example. Telenor Myanmar introduced Wave Money in partnership with Yoma Bank and had around 11m customers in 2018 while Ooredoo launched its M-Pitesan platform in 2017. MPT launched its service (MPT Money) in January this year, with all devised to help the Myanmar economy reduce its reliance on cash.

As commercial 5G services spread to the broader population over the next two to three years, the ability to make mobile payments for all sorts of physical as well as digital goods and services using their smartphones will reach a more significant percentage of Myanmar's population. The country's MNOs should establish appropriate partnerships with third-party payment platforms now to maximise that opportunity when it comes.

[i] GSMA Intelligence: The Mobile Economy Asia Pacific 2018

[ii] Informa - Myanmar: Mobile, Broadband, TV, and OTT Video Report