6.1 PAPER-Launching Mobile Financial Services

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PUBLISHED ON
DECEMBER 19, 2017
THE CIBER CASE SERIES
Launching Mobile Financial Services in Myanmar:

The Case of Ooredoo
BY GITA V. JOHAR * , ODED NETZER ‡ , AND ALEXANDRE LIEGE †
VIDEO PROLOGUE: PLEASE WATCH BEFORE READING THE CASE.
October 2014: Dawn of Myanmar’s Modern Age

It had been two weeks since Ooredoo had launched its telecom network in Myanmar. Unlike
their neighbors in Cambodia, Laos, and Thailand, where estimated average cell phone
penetration was 77%, less than 10% of Myanmar’s population had mobile phone accessi prior
to Ooredoo’s rollout.1 Yet those statistics were rapidly changing. The price of SIM cardsii, as
measured by sales of government-owned Myanmar Posts and Telecommunications (MPT)
SIM cards, had just plummeted from a reported range of $80–$100 iii on Myanmar’s grey
market to the government–mandated face value of $1.50. (MPT was the only mobile operator
in Myanmar prior to Ooredoo’s launch.) On week one of the launch, over one million Ooredoo-
branded cards were sold, leaving Ooredoo’s newly minted telecom infrastructure struggling
to keep up with demand.
i For the purposes of this case, cell phone penetration will be measured by the number of SIM cards in circulation.
ii SIM cards were the connection to the mobile network in so-called prepaid markets; typically customers purchased a card when
the phone was purchased and added voice and data hours via “top-up” purchases using scratch cards with unique codes.
iii There were also isolated reports of people paying up to $500 or even $1,000 for a SIM card.
Author affiliation Copyright information

*
Meyer Feldberg Professor of Business, Columbia Business School © 2015-2017 by The Trustees of Columbia University in the
‡ Associate Professor of Business, Marketing Division, Columbia City of New York. This version of the case replaces an earlier
Business School version that was published on December 9, 2015.
†
International Development Director, MasterCard International Inc.
This case cannot be used or reproduced without explicit
permission from Columbia CaseWorks. To obtain permission,
Acknowledgments please visit www.gsb.columbia.edu/caseworks, or e-mail
The case writers would like to thank Jennifer Ong (Bain Consulting, ColumbiaCaseWorks@gsb.columbia.edu
Singapore), Julian Gorman and Ross Cormack (Ooredoo,
Myanmar), the launch management team at Ooredoo, and all those Disclaimer
in Yangon who contributed their time and thoughts to support the All of the data cited in this case are based on industry norms
development of this case. Marie Ball provided research and writing and case writer estimates and do not reflect company-specific
support for this case. research or projections.
This case is for teaching purposes only and does not represent
an endorsement or judgment of the material included.
This document is authorized for use only by Bologna Business School (AMMINISTRAZIONE@BBS.UNIBO.IT). Copying or posting is an infringement of copyright. Please contact
customerservice@harvardbusiness.org or 800-988-0886 for additional copies.
In June 2013 Ooredoo had been awarded one of two telecommunication licenses to operate in
mobile-starved Myanmar; the licenses were finalized in February 2014. Winning the license
had started the clock ticking for the Ooredoo Myanmar team and its key competitor, Telenor,iv
which planned to launch its services in November 2014. 2 Telenor and Ooredoo had both
committed to providing voice service to at least 75% of the country and data service to over
50% of the country within five years.3
With voice and data service as Ooredoo’s first priority, mobile financial services (also known
as mobile money) were expected to follow quickly. Mobile money—using a cell phone as a
bank account—was prevalent in emerging markets where a high percentage of the population
was unbanked, especially where people were more likely to own a mobile phone than to have
a bank account. In emerging markets, the most common uses of mobile money platforms were
for money transfers (typically to send funds from people in urban locations to family members
in rural areas) and bill payment. According to the Center for Financial inclusion, 90% of
Myanmar’s population did not have access to formal financial services.4
VIDEO EXCERPTS
Link 1: King on the Myanmar opportunity and challenges
Link 2: Gorman on the Myanmar opportunity and challenges
The Business Problem

Ooredoo Myanmar CEO Ross Cormack looked to Digital Services Senior Director Julian
Gorman, supported by Mobile Financial Services Head Consultant Thomas King, to formulate
a game plan for mobile money in Myanmar once the company’s first wave of services had
launched. As King explained, Myanmar was a slightly different animal from most other
emerging markets: “We’re involved in a totally new network, we’re building our towers from
scratch, building our customer base from scratch…Usually when you launch mobile money
it’s on an established network.”5
Gorman had to make some critical decisions by the end of 2014. Should Ooredoo launch
mobile financial services in Myanmar in early 2015? And if so, what services should be
provided and in what form: as a mobile wallet (an e-account that customers handled directly
to transfer money from their account to other customers with a mobile wallet), or an over-the-
counter (OTC) service (where payment and money transfers were processed by handing cash
to an agent who transferred the money on the customer’s behalf)? What resources would be
required to launch the services? Was the Myanmar customer ready for mobile money? How
would the launch of mobile financial services affect Ooredoo’s core airtime business? As
Gorman considered these questions, he reviewed the situation in Myanmar, the
iv As mobile network operators (MNOs), both would be telecom service providers; SIM cards (rather than handsets) were the
physical product to be sold.

The Case of Ooredoo | Page 2
BY GITA V. JOHAR*, ODED NETZER‡, AND ALEXANDRE LIEGE†
telecommunications industry, mobile financial services, the potential market size, and
Ooredoo’s competitive environment.
The Country: Myanmar

Located in Southeast Asia, in 2013 Myanmar had a population of approximately 53 million.6
The country shared borders with Laos, Thailand, Bangladesh, India, and China. Its estimated
GDP in 2013 was USD 59.4 billion—15% that of Thailand.7 It was also estimated that Myanmar
had the lowest per capita income in the Southeast Asia region, with approximately 32% living
at or below the poverty line. The World Bank reported that Myanmar’s literacy rates were
about 92%. 8 According to a recent consumer survey, men were the traditional income
providers for households (71%); however, decisions on family finances and grocery shopping
were primarily handled by women (78%). The infrastructure of the country was poor, with
75% of the population living without electricity, 50% of the roads inaccessible during monsoon
seasons, and extremely limited connectivity beyond the top 20 cities in the country. (See
Exhibit 1 for additional demographic information as reported by TNS, a local private research
firm.)
A former British colony, Myanmar (called Burma until 1989) was first administered as a
province of India before becoming a self-governing colony and ultimately an independent
state in 1948. Until 2010 the country had been largely controlled by the army. In April 2012,
following the release of hundreds of political prisoners, preliminary peace agreements with
major armed ethnic groups, and the enactment of laws that provided better protections for
basic human rights, there was an easing of international restrictions, and key sanctions were
lifted by the European Union, the United States, and other nations. The mood of the country
had shifted; as long-time Myanmar resident Jason Copland (market research director at TNS
Global) noted, “The biggest change was the freedom of expression that people had. And it
certainly made for a lighter mood in the street and in the office…People were feeling more
optimistic.”9
The financial sector in Myanmar was particularly underdeveloped. According to the
Economist, as of September 2013 Myanmar’s 24 banks—four of which were wholly state owned
and another 11 of which were at least partially government owned or managed—had a total
of 863 branches. By comparison, Thailand, with just 14,000 more people, had nearly 7,000 more
branches.10
There was also a generalized lack of trust in banks, following several runs on them in recent
history. Many employers paid their workers in cash, as King explained:
So right now if you’ve got a business of 20, 30, 50, even 100 people, once a month
the financial director is going down to the bank with a check and he gets a
suitcase full of cash and he comes back to the office and he hands out envelopes
of cash to his staff.
Page 3 | Launching Mobile Financial Services in Myanmar:

The Case of Ooredoo
Despite recent changes, modernity, on many levels, was not in the direct line of sight in mid-
2014. IFC consultant Julie Earne explained:
On the surface, you arrive here and you look around and it looks like a very modern
city, Yangon [Myanmar’s largest city and commercial hub]. And then you move
outside of Yangon and you realize that this is an anomaly and most of the country is
agrarian and not linked in and left behind..11
Myanmar was also the last frontier for mobile telephones. In 2012 only an estimated 9%–12%
of the people there owned a mobile phone, and fewer than 400,000 had Internet access.12 Part
of the reason for this low penetration was cost; the scarcity of SIM cards was also a factor.v For
example, in 2013 MPT made only about 350,000 SIM cards available, at a cost of 1,500 kyats
(about $1.50), through a lottery system—but on the grey market those cards sold for 50 to 70
times that amount.13
As part of Myanmar’s modernization effort, the government put out a telecommunications
tender bid in early 2013. It was actually the world’s most competitive licensing competition
ever seen. There were 92 bidders right at the beginning. Two international firms, Ooredoo and
Telenor, were selected.
One 2014 estimate suggested that telecoms could contribute as much as 7.4% of Myanmar’s
GDP over a three-year period and employ as many as 66,000 people full time.14
See Exhibit 2 for projected telecom subscribers in Myanmar, 2012–2019.
VIDEO EXCERPTS
Link 3: Earne on pace of cultural change
Link 4: King on cash-based society
Link 5: Htun on challenges facing the rural population
The Company: Ooredoo Myanmar

Myanmar was slated to become Ooredoo’s second-biggest market by population after
Indonesia. Between operating expenses, capital expenses, and the 2014 portion of the license
payment, Ooredoo estimated that it had invested $1 billion in Myanmar in 2014 alone.
Sensitive to the costs incurred, Ooredoo’s business plan expected that the products and
services launched in Myanamar would be profitable by year three, standard practice in the
mobile telecom industry. The company saw one of its core competences as operating profitably
in turbulent, high-risk environments.
vSmartphone and feature phone penetration had gained some degree of traction in Myanmar prior to Ooredoo’s launch, as many
households owned one of them as an all-in-one entertainment device (camera, television, gaming device, and music player). At
an average cost of $43 in 2013, it was a less expensive alternative to televisions or computers. (A feature phone was a mobile
phone that incorporated functionalities such as the ability to access the Internet and store and play music but lacked the advanced
capability of a smartphone.)

Ooredoo had taken several steps to mitigate risk in Myanmar by working with the government
to strengthen the legal framework, vi alleviating land issues, and exercising sensitivity in
regions in conflict and hard-to-reach areas. It had also created direct ties in-country by hiring
800 local employees and by sponsoring the country’s Football Federation and the national
soccer team.
In the three months following the issuance of its license in February 2014, Ooredoo had begun
to build out its network. It had contracted with a mandated tower construction company,15
built its first towers, completed the switch in Yangon, and made its first successful call.
Ooredoo rolled out its 3G services beginning in several major cities, with plans to quickly
expand into rural areas. The network would require no further upgrades to accommodate
mobile financial services.
It was expected that Myanmar’s mobile phone system, like those of other emerging markets,
would operate on an almost exclusively prepaid basis. SIM cards would be sold via a network
of agents and dealers in convenience stores and other retail outlets throughout the country.
Ooredoo SIM cards were only compatible with phones with 3G service or higher—i.e., with
smartphones—which presented some challenges. As Jennifer Ong, a Bain consultant working
in Myanmar, explained, it would be up to the agents who sold the cards to “explain it to
customers such that when they buy an Ooredoo SIM card they would check their phone and
make sure it is compatible. Because if you put an Ooredoo SIM card in a phone that is not
compatible with this network then their user experience is going to be quite terrible.”16
Ooredoo had already signed contracts with the leading distributors and was on its way to
achieving its five-year goal of 240,000 SIM activation points and approximately 722,000 top-
up points of sales. Launching about one month prior to Telenor, Ooredoo sold over one million
SIM cards the first week out of the gate, with Cormack observing, “We’ve got over a million
customers… which we’re obviously very pleased about, but also very humbled about because
it’s higher demand than we even expected, even knowing that there was huge pent-up
demand.”17
Ooredoo advertised its launch on huge billboards and incentivized early sign-ups with
offers of free Internet access. Click here for promotional video leading up to launch. See
Exhibit 3 for additional marketing collateral.
VIDEO EXCERPTS
Link 6: Cormack on winning the bid
Link 7: Gorman on preparing for launch
Link 8: Cormack on the industry’s inflection point
viIncluded were the Telecom Law of 2013 with rules against anticompetitive practices, regulations for network sharing, and clear
legal intercept rules.

The Case of Ooredoo
The Competition: Telenor Myanmar
The other major player awarded a license was the largest carrier in the Nordic region, the state-
controlled Norwegian firm, Telenor. Telenor had over 150 million customers worldwide, with
extensive operations in Asia, including in Myanmar’s neighbors Thailand, India, and
Bangladesh as well as in Malaysia and Pakistan. In Myanmar, Telenor hoped to replicate its
customer experience in Pakistan, where its subscriber base had soared to an estimated 32
million over 10 years and where the company’s Easypaisa mobile financial services had taken
off.
Like Ooredoo, Telenor was running at full capacity on multiple fronts in Myanmar to identify
potential distributors and cell phone tower sites, deal with operating challenges such as a
chronic shortage of electricity, and obtain permission to build cell towers. Petter Furberg,
Telenor’s chief executive for Myanmar, noted that the services would roll out in three major
cities just ahead of its planned November deadline:
An extensive distribution network will be the backbone of our mass market
approach. As part of Telenor Myanmar’s network roll-out plan, we will recruit
distributors and franchisees in each and every state and region in Myanmar with
the goal of establishing a network of 100,000 retailers within five years of the
network and service roll-out. These partners will include “mom-and-pop” shops
and other small businesses, and will sell a wide range of Telenor’s mobile
communications products and services, such as SIM cards, recharge vouchers and
other value-added services, at locations convenient to our customers.18
Unlike Ooredoo, Telenor would offer 2G services in addition to 3G voice and data, with an
additional deployment of services expected subsequent to launch. Telenor’s SIM cards would
therefore be compatible with inexpensive feature phones as well as smartphones. Telenor’s
stated launch strategy was to capture the market lead position with a low-cost operating
model, a high degree of outsourcing, and a lean organizational structure. Customer pick-up
was based on the continued decline in handset pricing, with feature phones priced from $10
and smartphones from $35.19
According to most industry observers, Telenor would be a formidable competitor for Ooredoo.
And, as Ong commented, “On Telenor’s side the advantage that they have is they are
launching both a 2G and a 3G network. 2G is an older technology that all phones would be
able to tap into, feature phones included, so anyone who wants to buy a Telenor SIM card can
just buy it straight off and use it in their phone.”
VIDEO EXCERPT
Link 9: Ong on Telenor and 3G versus 2G service
The Telecom Industry: Airtime

Mobile network operators (MNOs) generated revenue for airtime use either through exclusive
contracts with customers or by charging for minutes added to a branded SIM card, and they

closely monitored average revenue per user (ARPU) for the networks in which they operated.
ARPU in Asia was around $70 per year; Ooredoo expected a slightly higher ARPU in
Myanmar. Profit margins industrywide averaged about 30%.vii
Customer retention rates, and the associated churn rates (or customer turnover rates) were also
an important metric. As Gorman noted,
Telco operators have had mixed results on becoming personal brands. Around the
world, people who love Apple, love Apple. Doesn’t matter what Apple does, they
love Apple. Telecos haven’t been as successful in having that passionate
connection with their customers.20
Gorman added that banks, too, typically engendered more loyalty from their customers than
MNOs did. That said, in markets like the United States where customers tended to be locked
into contracts and operators had loyalty programs, churn rates might be as low as 1.35% per
month, or 15% a year.21 But churn was an especially important metric in emerging markets. As
Ong explained,
Developed markets are mostly a postpaid market so it is a lot easier there to drive
customer loyalty because they are tied to a contract. In an emerging market where
it is mostly prepaid, how do you drive customer loyalty when people can just buy
your SIM and throw it away?
In prepaid markets, churn was typically defined as occurring when a customer did not use an
MNO’s branded SIM card for three months; in fact, most telecos deactivated a SIM card after
three months. In India, with more than 15 mobile operators in a highly competitive,
predominantly prepaid market, a study published in 2014 noted that the annual churn rate
surpassed 50% (equivalent to a monthly rate of 6%).22 Competitive pressure, not surprisingly,
also led to lower ARPU.
Customers in prepaid markets generally bought a SIM card with a limited number of minutes
at the time of their phone purchase. As they used their phone, they replenished their stock of
minutes through branded top-up scratch cards with unique codes, available from a wide
variety of retail outlets.
John Nagle, CEO of a global cash-processing network, explained the top-up process:
A scratch card is airtime that a consumer buys from a retailer… so they go in and
they ask for a top-up and what they’re doing is they’re loading value—five or ten
or 20 dollars’ worth of airtime—onto their phone…Mobile operators print a card
with their brand on them and they print a number at the back and they put a foil
vii
Assuming an average user provides $10 of revenue, with a profit of $3 (30%), the profit margin per user would be 30%.

The Case of Ooredoo
over the number so that you can’t read it. You scratch out this and you input the
number and it puts the value of the card onto your airtime on your phone.23
The agents selling these cards would buy them in a variety of denominations and typically
sold several mobile operator card brands. Different mobile operators offered slightly different
denominations and agents would be challenged to keep all of the brands in stock. Ooredoo
cards, for example, would be offered in denominations of 5,000, 10,000, and 20,000 kyats. Based
on a Myanmar usage study conducted in May 2013 (when MPT was the only mobile provider),
customers tended to top up most frequently at local convenience stores (61%), followed by
mobile stores (33%). About 88% of customers purchased top-up cards for five minutes or less.24
Just as SIM cards connected customers to their voice service, agents were the mobile network
operator’s connection to its client base—not just to sell the products, but also to educate
consumers about changes in service. Ooredoo had two levels of dealers: super dealers and
dealers. The super dealers bought the airtime in bulk, recruited and organized the dealers, and
resold the airtime to them. The dealers sold the airtime directly to Ooredoo’s customers.
VIDEO EXCERPTS
Link 10: Gorman on customer loyalty
Link 11: King on churn
Link 12: Nagel on airtime top-ups
The Telecom Industry: Mobile Financial Services

Broadly defined, mobile financial services allowed customers (or agents working on their
behalf) to conduct monetary transactions and pay for goods and services using the mobile
phone as a platform. In 2013 there were 208 live mobile financial services operating in 83
countries, 60% of which had been launched in the past three years. Ooredoo was considering
the launch of mobile financial services with a money transfer service (government regulations
stated that transactions would be limited to 300,000 kyats per transaction), followed by other
services such as bill payments.
There were two basic ways to deliver mobile money services to customers: one option was a
mobile wallet, an e-account that customers handled directly, using their phone to transfer
money from their account to other e-accounts or to agents. Over time, as additional services
became available, the mobile wallet could allow customers to conduct a wide range of
transactions, including money transfers, bill payments, the deposit of wages, and the purchase
of goods or services—including airtime. The other delivery model was an OTC service, where
payment and money transfers were processed by handing cash to an agent who transferred
the money on the customer’s behalf.25 This service did not require the customer sending money
to have a mobile phone.
THE MOBILE WALLET MODEL
Many industry observers believed mobile wallet to be the endgame in mobile finance for the
unbanked, providing that population a faster track to true financial inclusion. Most MNOs

paid agents a commission for the cash-in/cash-out services they performed for money
transfers, even when the customer used his or her own mobile wallet for the transaction.
Airtime could typically be bought directly from the MNO by a customer using a mobile wallet;
the MNO paid no transaction fees to the agent for those purchases.
Financial inclusion experts believed that customers using mobile wallets gained more trust in
the workings of formal financial systems and ultimately would upgrade from money transfers
and bill payments to more sophisticated value-added services such as loans and savings
accounts.
The launch of mobile wallet services often impacted new SIM card acquisition rates, with some
operators reporting growth rates in their customer base increasing by approximately 3%. At
the high end of customer-acquisition statistics accompanying mobile wallet launches, Telenor
Pakistan reported a 14% increase in subscribers in one quarter of 2010 compared to the same
period in 2009.26 SIM cards could be topped up from the mobile wallet, thus eliminating the
period that customers were without airtime service, which could increase ARPU by as much
as 15% because of increased use of that service. The experience of MTN Uganda was
instructive in terms of potential synergies between the mobile wallet business and the airtime
business. Launched in partnership with Stanbic Bank in March 2009, MTN Uganda’s
MobileMoney service enabled customers to send and receive money domestically and to buy
airtime using their mobile phone. Customer churn decreased from 45% annually to less than
10% annually after MTN introduced mobile wallets.
M-Pesa
One of the best-known examples of a mobile wallet network serving the unbanked was M-
Pesa. M-Pesa was launched in Kenya in early 2007 by Safaricom (part of the Vodafone group)
as a mobile wallet service that allowed users to deposit, withdraw, and transfer money with a
mobile device. All that was required to access M-Pesa was to go the nearest M-Pesa agent or
outlet. After providing proof of identification, the customer opened a mobile wallet with his
or her phone number and was given a four-digit PIN number. The PIN guaranteed that only
the account owner could access the funds. To deposit money in their wallet or withdraw funds
from it, customers went to an M-Pesa agent. To transfer money to another M-Pesa account,
they entered their PIN and the amount to be sent on their phone, and the funds were instantly
transferred to the receiver. Ordering a money transfer with M-Pesa felt a lot like sending a few
SMS (text messages). If the SIM card was lost, the customer brought proof of identity to an M-
Pesa branch to get a new card with the same phone number and the same account information.
Within eight months of M-Pesa’s launch, over 1.1 million users had transferred a total of over
87 million USD using the service; by September 2009 over 8.5 million users had transferred a
total of 3.7 billion USD. By June 2014 M-Pesa had 15 million users conducting more than two
million daily transactions.
At the time of launch, Kenya had an almost 40% penetration of mobile phones, in which
Safaricom was the clear market share leader, with 80% of the customer base. Nearly 20% of

The Case of Ooredoo
Kenyans were unbanked. One year after launch, one study estimated that over 80% of Kenyans
were aware of M-Pesa, and 66% had used it.
At launch, Kenya had a very limited financial infrastructure in place with only 491 branch
banks, 500 post office branches, and 352 ATMs servicing a population of 15 million. Within a
year after launch, M-Pesa had 2,262 distribution outlets; by March 2009 this number had risen
to nearly 10,000.27
However, despite the high penetration of mobile phones in Kenya and other factors such as a
Central Bank regulation supportive of mobile financial services, the service was not profitable
until year three.
THE OTC MODEL
With OTC services, customers went to an agent who performed the transaction on their behalf,
using his or her mobile phone to send the funds to the recipient’s phone. The sending customer
paid the agent in cash for the amount to be transferred and needed neither a SIM card nor a
phone. An SMS with an access code for the money was then sent to the recipient, who went to
another agent who “cashed out” the funds (less a stated fee). In this model, the agent served a
similar function as a private bank—the predominant channel for money transfers where no
mobile money system existed—at locations that were presumably more convenient for
customers.
Ong described the benefits to launching an OTC service in a developing market:
The advantage of an over-the-counter model is that it is easier to educate people
about mobile money through it. With mobile money you are basically telling
someone to use their phone to perform financial transactions. But you need to
assure people of the security of the transaction, right? So when you use an OTC
model, you have the agent who will explain how this is going to be done and you
have the agent doing it as well.
According to King, OTC service had some distinct advantages over the mobile wallet,
especially in the short-term: “The benefit with OTC is the immediate volume that you get.
That’s not necessarily a benefit for us, but it’s a benefit for our agent network because if you
don’t give your agent network enough volume, they’re going to lose interest, simple as that.”
Given that Ooredoo had just launched airtime services, the use of the OTC network to launch
mobile money meant that the company did not need to wait for penetration of Ooredoo SIM
cards into the market to gain momentum. (Mobile wallets, on the other hand, relied on
customers buying Ooredoo SIM cards to use in their own phones to make money transfers.)
Easypaisa
One of the best-known examples of an OTC model was Telenor’s Easypaisa service in
Pakistan. When Telenor Pakistan and Tameer Microfinance Bank launched Easypaisa in 2009,
88% of the population in Pakistan did not have access to formal financial services, with only
2,500 banking branches servicing 105 million people in the rural areas of the country.
However, there was 65% mobile penetration (a figure that was projected to grow to 95% by

2013), creating what industry observers termed “a perfect storm of factors that had the
potential for the explosive mobile financial services adoption: a proactive mobile operator, an
operator with a banking license and a market with high mobile penetration but low financial
inclusion.”28
Easypaisa was lauded by financial inclusion organizations as an overwhelming success:
They created a network of over 11,000 agents, each processing bill payments and
money transfers. Easypaisa is unique in that customers do not need to have a
mobile account with Telenor to pay their bill at an Easypaisa shop—they simply
present their cash and bill to an agent who completes the payment on a mobile
phone.29
Easypaisa had also delivered huge benefits to Telenor Pakistan, having proven to be a
customer acquisition tool. See Exhibit 4 for screenshot from the site.
In 2013 the Consultative Group to Assist the Poor (CGAP) reported that Easypaisa was the
third-largest mobile money deployment in the world, serving 7.4 million unique users. Of
these customers, 2.4 million were wallet users and another 5 million were unique OTC
customers.30
OTC service was originally conceived as a bridge for the unbanked to mobile wallets and
ultimately to more sophisticated financial instruments, but Telenor reported that this
migration had been slow:
We have to recognize that OTC is a real solution for a particular segment of the
unbanked and is there to stay. Regardless of how convenient and attractive we
make mobile wallets, there will always be a segment of customers who will
prefer the OTC solution because they find it easier to rely on the agent to send
money and they prefer not to open an account for themselves.31
As industry watchdog service GSMAviii reported: “[OTC] agents are at the frontline of every
mobile money deployment: if they don’t sign up customers, no customers sign up; if they don’t
hold float, ix customers can’t transact; and if they aren’t reliable, the mobile money service
won’t be seen as reliable.”32
Much more was required from mobile money agents than from agents selling prepaid airtime,
who only stocked and sold SIM and top-up cards. Mobile money agents needed to be better
capitalized. Research had shown that they needed up to ten times more float than their airtime
viii The GSM Association (GSMA, or Groupe Speciale Mobile Association), founded in 1995, is an association of mobile
operators and related companies devoted to supporting the standardization, deployment, and promotion of the GSM mobile
telephone system.
ix In traditional bank systems, float is defined as the time between the deposit of a check in a bank and payment. Float here
refers to how much money agents must have in their accounts to cover the cashing out process for mobile banking customers.

The Case of Ooredoo
counterparts required and that they waited longer for their profits. Regulations in most
countries also required that mobile money agents have a bank account.
In addition, mobile money agents also needed more training, and their work was more labor
intensive. The sale of airtime simply involved selling a scratch card, whereas the sale of a
money transfer required handling the transaction, educating customers, and helping them
through the process. Whenever a customer came to an agent to send or receive money, or a
client with a mobile wallet came to an agent for cash-in or cash-out services, the agent would
receive a commission. SIM card sales and top-ups generated higher margins per transaction
and quicker payouts for agents than money transfers or bill payments did, so the agent
incentive scheme for mobile money needed to be carefully crafted.
Ong explained that there was a trade-off for patient agents:
With OTC, agents can earn a commission from the money transfer itself— whereas
with a wallet system, they only earn commissions from the cash-in and cash-out.
So how do you continue incentivizing these agents? You promise them increased
volume and then you find other ways to incentivize them. For instance, you give
them an incentive for getting people signed up to a wallet. Or for every customer
they register, they get a cut for every mobile money transaction the customer
performs (up to a certain number).
THE ECONOMICS OF MOBILE WALLET VS. OTC MODELSx
Based on industry norms, the revenues and gross margins earned from consumer fees for
money transfer services were almost identical for mobile wallet and OTC. In the case of the
wallet, for each transaction—regardless of the amount—the sender would pay a $0.05 person–
to-person transfer fee, and the receiver would pay $0.70 for cashing out (withdrawing) the
money from an agent. The telecom company would pay a commission of $0.225 to the agent
who made the deposit on the sender’s wallet (i.e., provided cash-in service) as well as a
commission of $0.225 to the agent who made the withdrawal from the receiver’s wallet (i.e.,
provided cash-out service). In other words, the telecom company would pay 60% of the
customer’s fees as commissions to the agents and would retain 40%.
In the case of OTC money transfers, the sender would pay the fee of $0.75 (about 770 kyats)
per transaction to the telecom company, and the telecom company would then pay
commissions of $0.225 to the sending agent and $0.225 to the receiving agent. Again, the
telecom company would retain 40% of the customer’s fees.
Although the revenues and gross profits per money transfer transaction were similar in the
OTC and mobile wallet cases, the number of money transfer transactions was expected to be
xData for the economics of mobile wallet and OTC is estimated based on the GSMA Webinar on Mobile Money Pricing &
Commissions, February 2011 (http://www.gsma.com/mobilefordevelopment/gsma-webinar-on-mobile-money-pricing-and-
commissions ) with case writer refinement.

greater in the mobile wallet model because of ease of use. On the other hand, initially the
adoption of mobile money transfer was expected to be faster for OTC than for mobile wallet,
for several reasons: senders and receivers would not need a SIM card to complete the
transaction; less customer education would be required; and agents would likely be
incentivized to promote the money transfer service. However, as the number of services
offered by the mobile wallet (e.g., bill payment and direct deposit of salaries) increased, in later
years the number of customers was likely to grow faster with a wallet compared to OTC.
Despite these advantages, because the wallet was a more sophisticated system, in offering it
the telecom company would incur additional expenses: costs to develop and maintain the
technology platform, higher marketing and salary expenditures, and registration fees paid by
the telecom company to the dealer each time they registered a customer.
These financials are captured in Appendix 2.
VIDEO EXCERPTS
Link 13: King on role of banks and mobile money providers
Link 14: Paing on the banks’ interest in mobile money
Link 15: Htun on serving the rural unbanked
Link 16: Ong, King and Paing on OTC versus mobile wallet
The Customer for Mobile Money

Wanting to better understand customer needs relating to mobile money services in Myanmar,
Ooredoo commissioned qualitative and quantitative market research in the spring of 2014. See
Exhibit 5 for a screenshot of the female participants.
General findings confirmed market observations. Most people in Myanmar were in need of
cash transfer services but lacked the infrastructure for the transactions. Money was primarily
sent to and from the Yangon and Mandalay areas. Transfers were currently done using a
private or government bank, bus service personnel, friends and relatives, or Hundi (a trust-
based informal network of money transfer intermediaries); private banks were the most
common channel. Banks were used primarily by salaried workers in urban areas to transfer
money to relatives in rural areas. A bank account was not necessary to make use of this service,
but with branches few and far between, access was difficult for the roughly 75% of Myanmar’s
population who were agrarian and lived in more remote areas. Pwint Htun, a native of rural
Myanmar who is now a CGAP consultant to the World Bank, shared this insight:
I was talking with a farmer and she said every time her daughter sends her
remittance back from Thailand, she needs to go to the nearest town and withdraw
the money. She has to wait in line at the bank, sometimes wait for the bank staff to
have lunch—it’s half a day of work for her just to collect the payment.33
The process of money transfer at a bank took about 30 minutes on average, from the time spent
in travel to completion of the transfer. There were a limited number of bank branches and bank

The Case of Ooredoo
operating hours were inconvenient. Attributes that were considered important in money
transfer services were speed of the transaction and convenience, costs, security, and ease of
use.
Gorman considered how a typical customer might think about switching from using a bank’s
money transfer services to using mobile money transfer services. Would the customer benefit
economically? In terms of pricing, a leading bank charged $0.49 (about 500 kyats) for the fax
fee plus 0.15% of the amount being sent. There were no set charges associated with Hundi, bus
terminal personnel, or friends (these services were typically provided in exchange for favors
or other services) but—especially with Hundi or the bus service personnel—there was less
certainty that the money would actually arrive. In terms of customer understanding, a fixed
fee per transaction would be the easiest for the Myanmar market to understand.
VIDEO EXCERPTS
Link 17: Liew on current money transfer process at banks
Link 18: Tan on key research findings
Ooredoo’s Proposed Launch Plan for Mobile Money

Based on the market research findings, Gorman thought that the first mobile money service
Ooredoo should launch was money transfer, with mobile bill payment as the next likely
service to roll out.
Unlike M-Pesa agents in Kenya, telecom operators in Myanmar were required to partner with
a bank licensed by the Central Bank to offer mobile money services. This presumably provided
benefits to consumers of telecom financial services (in the form of regulated security for their
money) and most definitely to the banks, which benefitted from the associated float. After
considering several partners, Ooredoo selected CB Bank. King described how float would
work for the bank:
The way that mobile money works is that an agent goes to our bank, our partner
bank, and deposits money in their account. We then receive notification from the
bank that that money has been deposited for that agent and we credit or issue
mobile money to that person...What that means is that at any given time there is
always cash in the bank account backing up the money that happens to be
floating around the system at any given time. That money sitting in that bank
account is referred to as the float. That float can be massive. Absolutely
massive...I think the return here [in Myanmar] that the bank would get would
be about 13%. If you consider the fact that we may well have in the region of 50
or 60 million dollars on deposit at any given time, that’s a nice return for the
banks.
All Ooredoo mobile money agents would be required to have a CB bank account, although the
account requirements would be limited to approved identification and an address. Balances
would be limited to one million kyats. CB Bank would be responsible for compliance with

regulations as defined by the Central Bank. For its part, CB Bank would earn interest on the
mobile money float and, with the future launch of additional financial services, presumably
be able provide debit cards, micro loans, savings accounts, and microinsurance to Ooredoo’s
customers.
With airtime agents and dealers already in place, Gorman considered how to develop a
network of mobile money agents to both sell its products and educate consumers about the
use of those products. The options he considered were to leverage Ooredoo’s existing airtime
agent network, to create a separate network of agents who exclusively sold mobile money
products, or to engage a third party to distribute mobile money products. The decision was
complicated by the fact that as customers began to make airtime purchases over their phones,
moving to a mobile wallet would likely, over time, diminish the immediate commissions
agents made on airtime sales. But for the foreseeable future, agents would be the face of the
brand and were essential for consumer education.
As Gorman noted, “The thing you have to consider is having a viable commercial model for
the agents. If the money turning over in the system can only sustain a certain number of agents,
you know you need a certain amount of revenue and a certain number of transactions to keep
them interested and busy.”
WEIGHING THE OPTIONS
Gorman was still undecided about whether to roll out Ooredoo’s money transfer service in
Myanmar with OTC or with a mobile wallet. In thinking of OTC money transfers, one extreme
option would be that the sender and the receiver would not be required to use an Ooredoo
SIM card. The agents would complete the transactions on behalf of the customers. Gorman
considered the implications of the mobile wallet model for the central airtime business.
Though it was difficult to estimate the airtime ARPU in Myanmar due to the country’s low
mobile penetration prelaunch, Ooredoo estimated an ARPU of approximately $5.00 per
month.34 With increased competition and cellphone penetration the ARPU was expected to
decline. This would not change with the launch of mobile financial services using the OTC
model. However, if a mobile wallet system were launched, industry analysts estimated that
ARPU would increase by 15% because of the ease of topping up the SIM card using the wallet;
customers might increase phone usage, and hence, the ARPU could go up accordingly. This
increase in ARPU was significant, given that net profit in the airtime business was in the range
of 30%. Ooredoo could also expect the churn rate of its mobile wallet users to lower to an
annual rate of 15%; a 50% annual churn rate was expected to apply to the rest of the customer
base. This was a conservative estimate, based on the experience of MTN mobile money
Uganda—where the churn rate dropped to as low as 3% among mobile wallet holders. (The
reason for the lower churn rate among mobile money users was the high degree of consumer
stickiness to bank services relative to mobile carriers.)

The Case of Ooredoo
There were also other synergies to consider. When customers used their wallet to buy airtime,
mobile telecoms would not need to pay the 8% commissionxi to the dealers for top-ups. Finally,
Gorman believed that by offering a value-added service such as a mobile wallet, Ooredoo
could compete better against Telenor and increase customer acquisition. The actual increase
was not quantified, although speculations ranged from a growth of 3% to 5%.
On the surface, Myanmar was a textbook opportunity for mobile money, as Gorman pointed
out: “[There is a] very large, unbanked population….The mobile networks are just rolling out
now. The technology is much cheaper than it was ten years ago. So you’d think that all the
ingredients are in place for mobile money to be successful here.” Yet, as Gorman also noted,
most of the people in Myanmar would be experiencing a cell phone for the first time, and
asking them to understand mobile financial services so soon might be a risk because “there’s
only so much people can absorb quickly.”
King and Gorman were both aware of the unique challenges this “last frontier” presented.
Gorman summed up the task before them:
The difficulty with mobile money is, of about the 220 odd deployments around
the world, there’s some common characteristics among the successful ones…even
then ten or twenty are actually profitable. But the consistency is about scale,
operator lead, and the regulatory environment.
With Telenor days away from launching airtime services, Gorman carefully considered
Ooredoo’s next steps. Was Myanmar truly ready for mobile money? If so, what should the
timing of the launch plan be? And once launched, what should the model look like?
VIDEO EXCERPTS
Link 19: King on bank float
Link 20: Liew on benefits of mobile money
Link 21: King final thoughts
Link 22: Gorman final thoughts
xi
8% commission to dealers for airtime based on case writers’ estimates.

Exhibits
Exhibit 1
Myanmar Consumer Overview
Demographics
Male 46%
Female 54%
Urban 23%
Metropolitan 10%
Rural 67%
Life expectancy (male) 61 years
Life expectancy (female) 67 years
Literacy rate 92% in 2009
High school 54%
Secondary education 11%
Avg # of children 2.03
Avg. urban household size 4.2
# Generations under one roof 2 (69% of households)
Occupation
Self-employed 65%
State-owned business 17%
Private—local 15%
Private—foreign owned 1%
NGO .2
Income
Less than $188US per month 54%
$189-$375 per month 14%
$376-$625 per month 6%
None 23%
Urban income classification
High socio/economic>$500/month 22%
Middle socio/economic $225-500/month 36%
Low socio/economic <$225/month 42%
Household amenities
CRT TV 73%
Rice cooker 77%
Refrigerator 60%
Indoor plumbing 40%
Air conditioner 19%
Plasma TV 18%
Washing machine 17%
Gas stove 12%
Internet 2%
Wish list
Washing machine 21%
Refrigerator 15%
Laptop 15%
Air conditioner 14%
LCD/Plasma TV 13%
Mobile phone (not smartphone) 12%
Tablet (i.e., iPad) 8%
Digital camera 8%
Personal computer/desktop 7%
Smartphone 7%
Sources: TNS, “Myanmar Lifestyle and Benchmark Report,” June 18, 2013

The Case of Ooredoo
Exhibit 2
Projected Telecom Subscribers in Myanmar, 2012–2019
Source: Analysys Mason. Average numbers. Telenor presentation, February 10, 2014.

Exhibit 3
Ooredoo Airtime Services: Marketing Launch Collateral
English translation
Ad on left: With 1500 kyat SIM card, you will hear clearly. Today, in Ooredoo Myanmar stores, you can get them.
(At the very bottom, under logo): You can buy them in Mandalay, Rangoon, and Naypyidaw.
Ad on right: With 1500 kyat IM card, you can get faster Internet. Today, in Ooredoo Myanmar stores, you can get
them. (At the very bottom, under logo): You can buy them in Mandalay, Rangoon, and Naypyidaw.

The Case of Ooredoo
Exhibit 3 (continued)
English translation
Ad on left: If you buy Samsung Galaxy V, you get 100 minutes free each month, 100 SMS transfers each month,
and 300MB data for 3 months.
Ad on right: Free Facebook access. You can use Ooredoo Internet for 500 kyat a day. (Bottom box): Every day for
500 kyat, you can use 30MB of Internet, 20MB of kyat Facebook for free. Text 30 MB to 2238.
Source: Company documents.

Exhibit 4
Easypaisa Site Visual for Mobile Money Transfer
Source: “2011: The Impact of Mobile Financial Services,” Telenor Group, http://www.telenor.com/sustainability/impact/2011-the-
impact-of-mobile-financial-services/.

The Case of Ooredoo
Exhibit 5
Focus Group Participants
Source: Company documents.

Appendix 1
Case Participants: Interviewee List in Yangon, Myanmar
Ross Cormack CEO Ooredoo
Julian Gorman Digital Services Senior Director Ooredoo

Thomas Newton
King Head Consultant, Mobile Financial Services Ooredoo
Director, Client Services; Head of Telecom & Technology
Adrian Tan* (Singapore and Malaysia) Nielsen
Jennifer Ong* Consultant/Research Project Manager Bain
Chee Seng Liew Senior Deputy Managing Director CB Bank
Pwint Htun Consultant CGAP (IFC)
John Nagle CEO RedDot Network
Julie Earne Senior Microfinance Specialist IFC
Jason Copland Market Research Director TNS Global
Frontier
Thura Soe Technology/myKyat
Paing Managing Director mobile money
*Interviewed in Singapore

The Case of Ooredoo
Appendix 2
Base Case Projections (Case Writer Estimates)
OTC
OTC Bcase (Customers can only make OTC
transactions) year 0 year 1 year 2 year 3 year 4 year 5
Total fixed costs $1,420,000 $1,100,000 $1,175,000 $1,450,000 $1,325,000 $1,400,000
Acquisition of the platform and upgrades $500,000 $200,000
Maintenance $100,000 $100,000 $100,000 $100,000 $100,000
Market research $120,000
Advertising $300,000 $375,000 $450,000 $525,000 $600,000
Non-variable payroll $800,000 $700,000 $700,000 $700,000 $700,000 $700,000
Variable revenue per customer $7.00 $9.00 $12.00 $15.00 $17.00

Revenue per active customer $7.00 $9.00 $12.00 $15.00 $17.00
Variable cost per customer $4.85 $6.05 $7.85 $9.65 $10.85

Payment to sending dealer and receiving dealer $4.20 $5.40 $7.20 $9.00 $10.20
Recruitment and Branding of agents $0.50 $0.50 $0.50 $0.50 $0.50
Call center $0.15 $0.15 $0.15 $0.15 $0.15
Margin per customer (old and new) $2.15 $2.95 $4.15 $5.35 $6.15
Actual number of customers 150,000 300,000 450,000 700,000 1,000,000

Number of agents (mid-year) 1,500 3,000 4,500 7,000 10,000
Yearly cash flow ($1,420,000) ($777,500) ($290,000) $417,500 $2,420,000 $4,750,000

Cumulated cash flow (net result) ($1,420,000) ($2,197,500) ($2,487,500) ($2,070,000) $350,000 $5,100,000
SEE ALSO ASSOCIATED EXCEL SPREADSHEETS RELATING TO FINANCIAL DATA.

Sources: Case writer estimates; “Is There Really any Money in Mobile Money” and “Mobile Churn Trends and Customer Retention Strategies” by GSMA.

Appendix 2 (continued)
Base Case Projections (Case Writer Estimates)
MOBILE WALLET
Wallet Bcase (Customers can only make wallet based
transactions) year 0 year 1 year 2 year 3 year 4 year 5
Total fixed costs $1,820,000 $1,520,000 $1,645,000 $2,130,000 $1,955,000 $2,080,000

Acquisition of the platform and upgrades $900,000 $300,000
Maintenance of the platform $180,000 $180,000 $240,000 $240,000 $240,000
Market research $120,000
Advertising $500,000 $625,000 $750,000 $875,000 $1,000,000
Non-variable payroll $800,000 $840,000 $840,000 $840,000 $840,000 $840,000
Variable revenue per customer $7.00 $9.50 $14.00 $18.00 $20.00

Revenue per active customer $7.00 $9.50 $14.00 $18.00 $20.00
Variable cost per customer (old and new) $5.03 $6.49 $9.15 $11.52 $12.70
Payments for cash-in/out $4.20 $5.70 $8.40 $10.80 $12.00
Recruitment and Branding of agents $0.33 $0.29 $0.25 $0.22 $0.20
Call center $0.45 $0.45 $0.45 $0.45 $0.45
License for Mobile Money platform $0.05 $0.05 $0.05 $0.05 $0.05
Variable cost per new customer (new only) $6 $6 $6 $6 $6

Registration cost per customer $6 $6 $6 $6 $6
Margin per new customer ($4.03) ($2.99) ($1.15) $0.48 $1.30

Margin per old customer $1.97 $3.01 $4.85 $6.48 $7.30
New customers 50,000 157,500 280,000 367,500 512,500

Retained Customers (ASSUMING 15% CHURN RATE) - 42,500 170,000 382,500 637,500
Total number of customers (mid-year) 50,000 200,000 450,000 750,000 1,150,000

Number of agents (mid-year) 333 1,143 2,250 3,333 4,600
Yearly cash flow ($1,820,000) ($1,721,667) ($1,987,143) ($1,627,500) $698,333 $3,240,000

Cumulated cash flow (net result) ($1,820,000) ($3,541,667) ($5,528,810) ($7,156,310) ($6,457,976) ($3,217,976)
SEE ALSO ASSOCIATED EXCEL SPREADSHEETS RELATING TO FINANCIAL DATA.

Note: All customers are active; inactive customers are not reported. The cost of enrolling inactive customers is factored in the acquisition cost of mobile wallet customers.
Source: Case writer estimates.

The Case of Ooredoo
Endnotes
1 Daniel Ten Kate, Kyaw Thu, and Adam Ewing, “Myanmar Picks Telenor and Ooredoo for
Phone Licenses,” BloombergBusiness, June 28, 2013,
http://www.bloomberg.com/news/articles/2013-06-27/myanmar-picks-telenor-and-ooredoo-
for-phone-licenses-over-soros. (Note: penetration numbers vary from 8% to 12%.)
2 ”Telenor and Ooredoo Win Myanmar Telecoms Tender,” DW, June 27, 2013,
http://www.dw.de/telenor-and-ooredoo-win-myanmar-telecoms-tender/a-16911779..
3 Aung HlaTun and Jared Ferrie, “Update 3 – Telenor, Oordeoo Win Myanmar Telecoms
Licenses,” Reuters, June 27, 2013, http://www.reuters.com/article/2013/06/27/myanmar-

telecoms-idUSL3N0F312M20130627.
4 Jeffrey Riecke, “Inclusive Activity in Myanmar,” Center for Financial Inclusion Blog, June 10,
2013, http://cfi-blog.org/2013/06/10/inclusive-activity-in-myanmar/.
5 All statements by Mr. King (head consultant, mobile financial services, Ooredoo Myanmar)
are cited from August 28, 2014, interview in Yangon, Myanmar. (See Appendix 1 for case
interviewee list.)
6 “Myanmar,” The World Bank, http://data.worldbank.org/country/myanmar.
7 CIA, “GDP (Official Exchange Rate),” The World Factbook,
https://www.cia.gov/library/publications/the-world-factbook/fields/2195.html#bm.
8 “World Development Indicators: Education Completion and Outcomes,” The World Bank,
2014, http://wdi.worldbank.org/table/2.13.
9 Cited from September 2, 2014, interview in Yangon, Myanmar.
10 “Twinned with South Sudan,” Economist, October 25, 2014,
http://www.economist.com/news/finance-and-economics/21627698-myanmar-has-licensed-
few-foreign-banks-its-financial-sector-still.
11 Cited from September 1, 2014 interview in Yangon, Myanmar.
12 “Chairman’s Message,” Ooredoo Annual Report 2013, 6.
13 Angelina Draper, “Tech Scene in Myanmar Hinges on Cellphone Grid,” New York Times,
July 13, 2004, http://www.nytimes.com/2014/07/14/business/international/tech-scene-in-

myanmar-hinges-on-cellphone-grid.html.
14 Draper, “Tech Scene in Myanmar.”
15 Two tower construction companies had been mandated: Myanmar Tower Company and
Pan Asia Majestic Eagle. (Sources: “Pan Asia Majestic Eagle Limited (PAMEL) Enters into
First Ever Non-Recourse, Cross Border Financing in Myanmar,” Reuters, September 30, 2014,
http://www.reuters.com/article/2014/10/01/pamel-myanmar-
idUSnPn5vlc2W+81+PRN20141001; “Digicel Group and YSH Finance Sign Agreement with
Ooredoo Myanmar,” Digicel Group, December 2, 2013,
http://www.digicelgroup.com/en/media-center/press-releases/achievements/digicel-group-
and-ysh-finance-sign-agreement-with-ooredoo-myanmar.)

16 All statements by Ms. Ong (consultant and research project manager, Bain Consulting
Singapore), are cited from August 27, 2014, interview in Singapore.
18 Khine Kyaw, “Telenor’s Aim Remains High in Myanmar,” Myanmar Eleven, August 22,
2014.
19 Telenor, presentation at analyst and press conference, February 10, 2014.
20 All statements be Mr. Gorman (digital services senior director, Ooredoo Myanmar) are
cited from September 2, 2014, interview in Yangon, Myanmar.

21 Average monthly churn rate for Verizon, 2013, Q1. Source: “Average Monthly Churn Rate
for Wireless Carriers in the United States from 1st Quarter 2013 to 3rd Quarter 2014,” Statista,
http://www.statista.com/statistics/283511/average-monthly-churn-rate-top-wireless-carriers-
us/.
22 P. S. Rajeswari and P. Ravilochanah, “Churn Analytics on Indian Prepaid Mobile Services,”
Asian Social Science 10, no. 13 (2014

ccsenet.org/journal/index.php/ass/article/download/38130/21272.
24 “Usage and Attitude Study of Telecommunications Sector in Myanmar,” Business Insight,
May 2013.
25 Greg Chen, “Mobile Money: OTC versus Wallets,” CGAP Blog, September 12, 2013,
www.cgap.org/blog/mobile-money-otc-versus-wallets.
26 Telenor Pakistan – Scaling to Meet Accelerated Growth: Case Study: Telenor Easypaisa (Cape
Town, South Africa: Fundamo),

http://www.fundamo.com/PDF/Case%20study/Telenor%20Easypaisa%20Pakistan%20Case%
20Study.pdf.
27 GSMA Annual Report, 2009.
28 Telenor Pakistan – Scaling to Meet Accelerated Growth, 3.
29 “MMU Examples – easypaisa,” GSMA,
http://www.gsma.com/mobilefordevelopment/programmes/mobile-money-for-the-
unbanked/mmu-examples/easypaisa.
30 Nadeem Hussain, “The ‘EasyPaisa’ Journey from OTC to Wallets in Pakistan,” CGAP,
October 10, 2013, http://www.cgap.org/blog/%E2%80%9Ceasypaisa%E2%80%9D-journey-

otc-wallets-pakistan.
31 Hussain, “The ‘EasyPaisa’ Journey.”
32 Neil Davidson and Paul Leishman, “Incentivising a Network of Mobile Money Agents,” in
Building, Incentivising and Managing a Network of Mobile Money Agents: A Handbook for Mobile
Network (London, England: GSMA,April 15, 2010), 1.
33 Cited from August 30, 2014, interview in Yangon, Myanmar.
34 Ooredoo Group, Capital Markets Day 2014 (Doha, Qatar: Ooredoo, May 12, 2014),
http://www.ooredoo.com/en/media/get/20140512_CMD-2014-Ooredoo-Myanmar.pdf.

The Case of Ooredoo

6.1 PAPER-Launching Mobile Financial Services

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THE CIBER CASE SERIES

Launching Mobile Financial Services in Myanmar:

VIDEO PROLOGUE: PLEASE WATCH BEFORE READING THE CASE.

October 2014: Dawn of Myanmar’s Modern Age

Author affiliation Copyright information

The Business Problem

physical product to be sold.

Launching Mobile Financial Services in Myanmar:

The Country: Myanmar

Page 3 | Launching Mobile Financial Services in Myanmar:

The Company: Ooredoo Myanmar

Launching Mobile Financial Services in Myanmar:

Page 5 | Launching Mobile Financial Services in Myanmar:

The Telecom Industry: Airtime

Launching Mobile Financial Services in Myanmar:

Page 7 | Launching Mobile Financial Services in Myanmar:

The Telecom Industry: Mobile Financial Services

Launching Mobile Financial Services in Myanmar:

Page 9 | Launching Mobile Financial Services in Myanmar:

Launching Mobile Financial Services in Myanmar:

Page 11 | Launching Mobile Financial Services in Myanmar:

Launching Mobile Financial Services in Myanmar:

The Customer for Mobile Money

Page 13 | Launching Mobile Financial Services in Myanmar:

Ooredoo’s Proposed Launch Plan for Mobile Money

Launching Mobile Financial Services in Myanmar:

Page 15 | Launching Mobile Financial Services in Myanmar:

Launching Mobile Financial Services in Myanmar:

Page 17 | Launching Mobile Financial Services in Myanmar:

Launching Mobile Financial Services in Myanmar:

Page 19 | Launching Mobile Financial Services in Myanmar:

Source: Company documents.

Launching Mobile Financial Services in Myanmar:

Page 21 | Launching Mobile Financial Services in Myanmar:

Source: Company documents.

Launching Mobile Financial Services in Myanmar:

Julian Gorman Digital Services Senior Director Ooredoo

Page 23 | Launching Mobile Financial Services in Myanmar:

Variable revenue per customer $7.00 $9.00 $12.00 $15.00 $17.00

Variable cost per customer $4.85 $6.05 $7.85 $9.65 $10.85

Actual number of customers 150,000 300,000 450,000 700,000 1,000,000

Yearly cash flow ($1,420,000) ($777,500) ($290,000) $417,500 $2,420,000 $4,750,000

SEE ALSO ASSOCIATED EXCEL SPREADSHEETS RELATING TO FINANCIAL DATA.

customerservice@harvardbusiness.org or 800-988-0886 for additional copies.

Total fixed costs $1,820,000 $1,520,000 $1,645,000 $2,130,000 $1,955,000 $2,080,000

Variable revenue per customer $7.00 $9.50 $14.00 $18.00 $20.00

Variable cost per new customer (new only) $6 $6 $6 $6 $6

Margin per new customer ($4.03) ($2.99) ($1.15) $0.48 $1.30

New customers 50,000 157,500 280,000 367,500 512,500

customerservice@harvardbusiness.org or 800-988-0886 for additional copies.

Yearly cash flow ($1,820,000) ($1,721,667) ($1,987,143) ($1,627,500) $698,333 $3,240,000

SEE ALSO ASSOCIATED EXCEL SPREADSHEETS RELATING TO FINANCIAL DATA.

Page 25 | Launching Mobile Financial Services in Myanmar:

Licenses,” Reuters, June 27, 2013, http://www.reuters.com/article/2013/06/27/myanmar-

7 CIA, “GDP (Official Exchange Rate),” The World Factbook,

10 “Twinned with South Sudan,” Economist, October 25, 2014,

12 “Chairman’s Message,” Ooredoo Annual Report 2013, 6.

July 13, 2004, http://www.nytimes.com/2014/07/14/business/international/tech-scene-in-

Launching Mobile Financial Services in Myanmar:

cited from September 2, 2014, interview in Yangon, Myanmar.

Asian Social Science 10, no. 13 (2014

24 “Usage and Attitude Study of Telecommunications Sector in Myanmar,” Business Insight,