Market Power and Public Benefit: Lessons from Banking and Telecom in the Maldives

1: Introduction

Market dynamics shape every economy, but in small island nations like the Maldives, their effects are often more visible and deeply felt. When a single provider dominates a sector, people tend to face higher costs, limited choices, and slower improvements. But when there’s real competition, services improve, companies become more responsive, and the public gains better value.

This article focuses on two essential sectors in the Maldivian economy: banking and telecommunications. Both are part of daily life, whether it’s accessing money or staying connected. Yet the level of competition in each sector is strikingly different.

In banking, the Bank of Maldives (BML) remains the dominant provider. Its closest local challenger, Maldives Islamic Bank (MIB), is still growing and significantly smaller in scale. Other banks operate in the country too, but most are state-owned foreign branches with limited retail presence. The locally incorporated Commercial Bank of Maldives is still in its early stages and has yet to scale significantly.

To its credit, BML has made banking more accessible across the Maldives. Its wide network of branches, ATMs, and digital services has helped bring essential financial services to all inhabited islands. But in the absence of stronger competition, progress on fees, rates, and innovation tends to be slower than it could be.

To its credit, BML has made banking more accessible across the Maldives. Its wide network of branches, ATMs, and digital services has helped bring essential financial services to all inhabited islands. But in the absence of stronger competition, progress on fees, rates, and innovation tends to be slower than it could be.

This article draws on the financial data of four public limited companies, BML, MIB, Dhiraagu, and Ooredoo, because they all publish audited annual reports. This allows for fair, transparent comparisons between sectors. MIB is included not just because of its public reporting, but also as the only fully-fledged Islamic bank in the country and BML’s most visible domestic challenger.

Banking and telecom are compared here because the contrast between them offers timely lessons. In telecom, competition between Dhiraagu and Ooredoo has led to better coverage, better pricing, and more innovation. In banking, the same competitive tension is still missing. That difference matters, not just for consumers, but for the broader economy.

By comparing market concentration, financial strength, and service access, this article explores how competition affects daily life. It also outlines ways policymakers can make other sectors work better for people.

2: Banking Sector Analysis – One Giant, One Challenger

The banking sector is still highly concentrated. BML controls most of the market, while MIB operates on a much smaller scale.

2.1 Market Size and Financial Returns

In 2024, BML reported MVR 49.6 billion in total assets. MIB had MVR 11.9 billion. BML held MVR 38.4 billion in customer deposits and MVR 20.5 billion in loans, while MIB managed MVR 8.7 billion and MVR 3.5 billion, respectively.

Fig 1: Banking Sector, Scale Comparison (2024)

BML earned a net profit of MVR 1.79 billion in 2024, with a return on equity (ROE) of 31.2% and earnings per share (EPS) of MVR 132.06. MIB posted a profit of MVR 156.6 million, with ROE at 13.7% and EPS at MVR 41.78.

2.2 Reach and Digital Access

BML operated 38 branches, 142 ATMs, and handled 107 million digital transactions. MIB ran 6 branches, 16 ATMs, and recorded 6.3 million digital transactions.

Fig 2: Growth in digital transactions

BML also offers Islamic banking under its BML Islamic division. But MIB is the only fully independent Islamic bank and the only one with public financial reporting.

2.3 Impact of Limited Competition

BML’s reach and innovation are commendable. However, in the absence of strong competition, banking fees tend to stay high, lending and deposit rates are less competitive, and innovation progresses more slowly. MIB offers a valuable alternative, particularly through Islamic finance, but its smaller scale limits its ability to influence market pricing, service models, or customer experience more broadly. A more balanced market would benefit consumers and encourage sector-wide improvements.

3: Telecom Sector Comparison – A Duopoly That Works

In contrast, telecom is a two-player field, and it works better. Dhiraagu and Ooredoo compete closely in both urban and remote areas.

3.1 Financial and Service Performance

In 2024, Dhiraagu earned MVR 2.57 billion in revenue and MVR 716 million in profit. Ooredoo followed with MVR 2.38 billion and MVR 612 million. ROEs stood at 27.1% and 26.4%, respectively.

Fig 3: Telecom Profitability and Return (2024)

Both invested heavily, Dhiraagu spent MVR 428 million and Ooredoo MVR 410 million, to improve services.

3.2 Innovation and Coverage

5G coverage reached over 50% of the population, with 52% for Dhiraagu, 55% for Ooredoo. Broadband access reached 94% and 92% of inhabited islands, respectively. Subscribers were also nearly equal, with 0.45 million for Dhiraagu and 0.44 million for Ooredoo.

 3.3 Lessons from Competition

The telecom sector demonstrates how real competition results in frequent service upgrades, transparent pricing, wide access, and product innovation.

Fig 4: 5G and Broadband coverage

When providers are evenly matched and strive to outperform each other, consumers benefit across the board.

4: Key Comparisons

To see how competition shows up in everyday life, it helps to look at the numbers side by side. This section compares the market share, service quality, and user experience in banking and telecom, using data from 2024 audited reports.

4.1 Market Share Overview

Banking is still heavily concentrated, with the Bank of Maldives (BML) holding about 81% of banking assets. Its nearest local competitor, Maldives Islamic Bank (MIB), accounts for just 19%. In telecom, the split is more balanced. Dhiraagu leads slightly with 52% of sector revenue, while Ooredoo holds 48%. That balance helps keep both companies on their toes.

Sector	Leading Player	Market Share	Second Player	Market Share
Banking	BML	~81% (assets)	MIB	~19% (assets)
Telecom	Dhiraagu	~52% (revenue)	Ooredoo	~48% (revenue)

4.2 What It Means for Consumers

Here is how people experience these sectors. In banking, services are widely available through BML, but fees are high, choices are limited, and new features are slow to arrive. In telecom, users benefit from better pricing, regular upgrades, and the freedom to switch between providers.

Area	Banking Sector	Telecom Sector
Reach	Nationwide via BML	Over 90% of islands by both
Fees and Pricing	High and rigid	Competitive and consumer-friendly
Product Innovation	Slow and provider-led	Fast and consumer-responsive
Switching Barriers	High	Low
Digital Use	Growing	Widespread

5: Policy Implications – Enabling Competition in a Small Market

The telecom experience in the Maldives demonstrates that effective regulation and healthy competition can produce real gains for consumers, even in smaller markets. With smart regulations, competition can thrive even in small markets. The banking sector shows what happens when it does not.

The telecom experience in the Maldives demonstrates that effective regulation and healthy competition can produce real gains for consumers, even in smaller markets. With smart regulations, competition can thrive even in small markets. The banking sector shows what happens when it does not.

5.1 What Helped Telecom

The success of competition in telecom has been shaped by three key factors. First, shared infrastructure, especially the submarine fibre network jointly expanded by Dhiraagu and Ooredoo, has played a crucial role. While each provider maintains its own mobile towers, both achieved full coverage across inhabited islands by around 2016, effectively reducing duplication. This shared baseline allows companies to compete on service quality and pricing instead of focusing on infrastructure deployment. Second, fair licensing and spectrum allocation prevented one provider from dominating the market. Third, consumer protections such as number portability and transparent billing empowered users to make informed choices and encouraged providers to keep improving. These enablers did not just benefit companies; they improved outcomes for nearly every household and business.

5.2 Why Banking Stalls

Banking lags behind due to several systemic barriers. High entry requirements, such as significant capital thresholds and complex licensing rules, discourage new players from entering the market. Digital banking tools and wallets are often poorly integrated across banks, limiting customers’ ability to move funds or compare services easily.

While both BML and MIB do publish their fee schedules online, the format and accessibility remain challenges. The information is often presented in dense PDF documents and varies in structure, making it difficult for customers to easily compare offerings or evaluate total service costs. Improving the clarity, standardisation, and navigability of these disclosures would allow consumers to make more informed financial decisions.

In many atolls, BML remains the only physical banking option, reducing the pressure to improve or diversify services.

5.3 Where to Start

Creating more space for competition does not require a complete overhaul. It begins with targeted steps that improve access, transparency, and interoperability. The table below outlines a few areas where small policy shifts could help level the playing field and give both consumers and new providers a fairer shot.

Area	Recommendation
Digital Interoperability	Expand shared payment systems. Build on Favara’s rollout to support open, bank-to-wallet access.
Fintech Access	Allow pilot schemes for community lending, digital wallets, and ethical finance tools.
Fee Transparency	Strengthen and standardise fee disclosures to improve clarity, comparability, and consumer decision-making.
Islamic Finance Growth	Promote sukuk, takaful, and other Sharia-compliant funding for SMEs.
Island Banking Options	Offer tax or licensing incentives for bank presence outside Malé.

These reforms are not about weakening dominant players. They are about building stronger, more responsive markets. When challengers can grow, incumbents are encouraged to do better. In the end, the consumer is the one who benefits.

Conclusion: Making Markets Work for Maldivians

Banking and telecom show two sides of market structure. One is dynamic and competitive; the other is still too concentrated.

The lesson is clear: competition works. That gap limits not only consumer choice, but also the potential for fairer, more inclusive economic development. To bring its benefits to more people, the Maldives needs to open space for challengers, invest in consumer protections, and ensure that no single provider becomes too entrenched to be questioned.

No citizen should be too remote to serve, and no company too big to improve.

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Maldives Economy Today [Vol 1 - Issue 4] July 2025