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BMI View: We have made some forecast revisions to Myanmar this quarter as the growth in H116
outpaced our initial expectations. Furthermore, Viettel has reportedly been chosen by the government as
the foreign partner for Myanmar's fourth and final mobile operator, to be licensed by end-2016. Through a
joint venture model, Viettel can replicate its tried-and-tested developing market strategy. However, the new
operator's challenges include the slowing organic mobile subscriber growth, ongoing price competition and
corporate governance. Meanwhile Cambodia's mobile market has experienced significant growth in the last
few years, but the momentum has come at the cost of one of the lowest ARPU levels in the Asia Pacific
region. The lack of growth opportunities, coupled with intense price competition and a crowded market, has
seen prominent companies exit the market. In Laos, low-value prepaid mobile services predominate, and
customers have little incentive to upgrade to higher-value products. This makes it difficult for operators to
generate a meaningful return on investment in networks and spectrum.
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? Although mobile services in Myanmar are being extended to rural parts of the country, the
emphasis is on prepaid services and this is putting downward pressure on ARPUs. The replacement
of 2G networks with 3G/4G platforms will be the main development trend through to 2020 and beyond.
? Mobile subscriber growth in Cambodia and Laos has been negatively affected by operator consolidation
in the former and the purging of inactive SIMs in the latter. Price competition undermines the value
of 3G networks.
? In all three markets mobile substitution acts as a disincentive for investment in wireline voice and
broadband. xDSL is the primary delivery platform as fibre is too expensive. We do not expect wireline
broadband to become a mass-market phenomenon in any of these three markets in the medium to long