Army-Backed Mytel Ordered to Halt ‘Shake’ Program

By Moe Myint 4 July 2018

YANGON – Deputy Director General U Myo Swe of the Post and Telecommunications Department, a branch of the Ministry of Transport and Communications, told The Irrawaddy on Wednesday that the agency has ordered the country’s fourth telecom operator, Mytel, to halt its “Shake Mytel” program, which offers a “free” service to its customers.

Mytel is a joint venture between the Myanmar Army-backed Star High Company, which owns 48 percent, Vietnam’s Defense Ministry, which holds 28 percent, and Myanmar National Telecom Holding Public Ltd, a group of 11 local companies with a combined 23-percent stake.

The company’s launch in Yangon on June 9 was attended by Army chief Senior General Min Aung Hlaing, Deputy Minister of National Defense of the Vietnam People’s Armed Forces Senior Lieutenant General Tran Don and nearly a dozen generals from both countries.

Telecommunications Department official U Myo Swe said Mytel initially proposed the Shake program as a lucky draw, but in practice the company has offered free service to users for weeks.

“As you know, in a lucky draw, when you shake the phone you can’t win every single time, but their program offers it to you many times every day. If you shake around 10-15 times then you will win a number of times. It doesn’t involve giving cars, phones or other items to participants; it offers ‘free service’ to phone users,” said U Myo Swe.

U Myo Swe said, “The reason the tariff framework prohibits free service is that it could lead to firms fighting each other [in the telecom sector], with the strongest company defeating its rivals. If we allow telecom companies to offer free service, the biggest conglomerates could come in and wipe out their rivals. ”

He pointed out that in recent years unfair competition had become a problem in neighboring countries including India, Laos and Cambodia. The Ministry of Transport and Communications has been drafting a new Tariff Regulatory Framework in order to create a sustainable telecom sector with fair play rules for operators.

Under the current Tariff Regulatory Framework, operators cannot price their voice call, SMS and mobile data services below fixed floor prices. During promotional periods and for their renewed special packages, operators are normally allowed to reduce the floor price by nearly 40 percent but Mytel has been granted permission to decrease the floor prices by 70 percent during its promotion period, which has lasted for about three months, as the ministry assumes it would have little impact on established operators.

U Zaw Min OO, Chief External Relations Officer of Mytel Company, acknowledged that it changed the program on June 27. However, the Shake Mytel program is still active. He explained that Shake Shake offers free Internet MB, text messages and phone calls. According to him, the company gives out a total of 10,000 reward points per day.

To take advantage of the offer, Mytel users need to download the Mytel Android application and simply try the Shake program. The Mytel communications officer said that when users shake the mobile device they can receive 5-10 SMS calls for free, and sometimes 10-100 MB and 10-15 minutes of free calls. He elaborated that such opportunities cannot be won by every subscriber as the promotion only works in Android phones and doesn’t function on Java and IOS phones. He also claimed that the company had limited users at that time.

In fact, the free service started six days before Mytel’s opening ceremony.  The “Shake Mytel” service began June 9 and ended on June 27 (free service) as the telecommunications regulatory department was besieged with questions by other operators over fair play in the market. Plus, Mytel already offered free Internet service to users amounting to about 1,500 MB and 150 voice calls, which can be used within three months.

U Myo Swe said the agency informed the company on June 20 and the company officially stopped the program one week later, on June 27. Mytel had offered the free service for 19 days and the reward points indicate that the company has given a maximum of 190,000 points to its SIM users. U Zaw Min Oo roughly estimated that the company spent over 100 million kyats.

Although the company has practiced “lucky draw” systems in different ways, they were not fined by the Telecom Department. U Zaw Min Oo said that starting from June 27, it was quickly changed to a traditional lucky draw system, which currently offers car, phone and other electronic items to Shake Mytel participants as the company has reached more than 1.5 million active SIM users across the country.

According to his explanation, if the user shakes the phone they will get a code number. The Mytel company announces Shake winners weekly on its official Facebook page.

The mobile penetration rate in Myanmar has reached a peak since Telenor and Qatar’s Ooredoo arrived in 2014, abruptly changing the monopoly market of state-owned Myanma Posts and Telecommunications (MPT), which charged millions of kyats for a SIM card during the military administration and early in ex-president Thein Sein’s term. Now, people can easily get every kind of SIM card for 1,500 kyats on the street.

The three operators jointly announced in a statement in February that about 53 million people use their services across the country. MPT, which partnered with Japan’s KDDI in 2014, was on top with 25 million subscribers while Telenor got second place with 19 million and Ooredoo had 9.5 million users.