Boycott and coup attempt cost Mytel USD$24.9 million in three months
November 5, 2021
Since the military’s illegal attempted coup in February, Myanmar consumers and shop owners have turned their backs on the military controlled mobile network Mytel, costing the telco at least US$24.9 million and a loss of almost 2 million subscribers from February to April.
In addition, around 10,000 Mytel Pay agents exited in the first 2 months of the coup, with agent numbers falling from 54,430 agents before the coup in January to 38,189 in July.
In response, the company has used costly and illegal strategies in a desperate attempt to claw back market share.
This comes after Mytel boasted record-setting growth in sales when it began in 2018. Within one month of setting up, Mytel had signed up more than two million subscribers, including a majority of Myanmar military personnel following a soft launch that involved exclusive access to military bases.
According to leaked data, 80 per cent of its sales was generated by the enormous network of privately-owned mobile phone shops who sold Mytel’s products throughout the country.
Mytel is part-owned by Star High, a subsidiary of the military conglomerate Myanmar Economic Corporation. The military’s ownership of Mytel amounts to between 28 and 39 per cent of the company following the transfer of shares from cronies to Star High. 49% is held by Viettel Global Investment, a company owned by Vietnam’s Ministry of National Defence.
The military leadership has a lot to lose. A Justice For Myanmar analysis of Myanmar Investment Commission documents leaked by Distributed Denial of Secrets show projections that the Myanmar military could receive over USD$700 million from Mytel over the coming decade.
Following the bloody February coup attempt, Myanmar consumers and mobile phone store operators alike launched a nationwide boycott of military products to reduce the flow of funds that enable the military junta’s campaign of terror. Primary targets have been products of the military’s foreign joint ventures: Mytel, Red Ruby cigarettes and Myanmar Beer.
As part of the campaign, public messages flooded social media encouraging boycotts and people shared images of local action. Dedicated apps and websites such as Way Way Nay were created to help people identify products and businesses associated with the illegal military junta.
Mytel boycott activities have included consumers’ destroying SIM cards and refusing to call Mytel numbers, and shop owners’ removing Mytel products and signs from their shops and refusing to sell and market Mytel products.
Mytel’s dirty tricks
In an effort to recover from its losses, Mytel has deployed costly and illegal strategies that undercut the market, breach telecommunications regulations and hurt their own staff.
Mytel likely gained subscribers by selectively implementing the military’s own shutdown orders, maintaining internet access for users when other subscribers were in the dark.
Mytel also implemented costly promotions to encourage shop owners to refrain from supporting the boycott.
According to a source, Mytel has offered mobile shop owners bonuses of 7,000 kyats (around USD$4) for every Mytel SIM card sold.
The SIM cards are provided to the mobile shop owners almost free, only costing 50 kyats (USD$0.03) each. This led to some mobile shops trying to give away Mytel SIM cards as gifts to customers so as to claim the bonus.
Mytel also began aggressively pushing promotions, including the ‘Wacky Jacky Game’, where subscribers could grab up to 100 million kyats (over USD$60,000). In ‘Grab Lucky Money’, random prizes of up to 20 million kyats (over USD$12,000) in e-money were offered. These enticements came as the military junta severely restricted ATM withdrawals and the generals’ coup attempt caused an economic crisis.
Among promotions, Hyundai cars were also offered. Justice For Myanmar wrote to Hyundai to ask if they approved the promotion, which capitalised on the Hyundai brand, but did not receive a response.
Subscriber discounts included mobile phone plans reduced to 999 kyats (USD$0.61) for 9 GB of data – the lowest data rate ever in Myanmar and bonuses of up to 250%.
Some of these promotions would ordinarily run afoul of the regulator, the Post and Telecommunications Department (PTD) of the Ministry of Transport and Communications, which has a price floor directive and competition rules that forbid services that undercut the market.
Soon after Mytel began operating in 2018, the company launched a lucky draw promotion that was so easy to win it was considered close to being a free service. PTD stepped in and ordered Mytel to stop the practice, citing competition rules.
PTD is now under control of the military junta led by the same generals who profit from Mytel, ensuring the system is rigged for the profit of the generals.
Rapid rise, rapid demise?
The Spring Revolution has shown that boycotts work. Ordinary people can inflict real damage on the military’s business interests. Mytel’s conduct also shows that the military will fight for its market share, benefiting from the systemic corruption that the military has created. The military’s total impunity extends to its business dealings.
Boycotting Mytel and all other military products is stopping the flow of funds to the junta. It is continuing, despite the challenges Mytel and the generals throw at the movement. The military cartel will be dismantled. Power to the people!