How will the entry of two telcos affect Myanmar citizens?

wasting time in myanmar, unproductive meetings, wrong prospects. business partner search service

The awarding of two new telecom licenses is a watershed in Myanmar’s road to modernization. It is expected to bring competition and innovation to an otherwise sleepy telecom sector that has been a disappointment to the Myanmar people and a drag on the economy for many years. Myanmar Posts and Telecommunications (MPT) and Yatanarpon will be privatized and will have to pull up their socks if they want to survive in this new, highly competitive telecom arena.

The government’s target is to grow mobile penetration from the current single digit to 50 percent in three years. What does that mean in terms of the number of mobile phone that needs to be sold per year to hit the target? What is the impact of the entrance of two foreign telecom operators on the life of average Myanmar people living in urban areas?

Table of projected mobile phone penetration in Myanmar from 2014 to 2016

Assuming that Myanmar has a population of 60 million and on December 31 2013 the mobile penetration is 7 percent, or 4.2 million, by end of 2016 there needs to be 30 million mobile phone users in Myanmar to hit 50 percent penetration. That means the mobile phone ownership needs to grow at an annual rate of 93 percent from 2014 to 20 I7, and the number of mobile users in Myanmar needs to almost double every year for the next three years.

As the developed countries move to 4th generation mobile technology (4G) – we can assume that the two new telecom operators will introduce the latest 4G mobile network technology here in 2014, which means Myanmar will leapfrog its neighbors and go straight to 4G mobile communications. The implication of having the latest 4G network is that users can surf the internet at a minimum speed of 100 megabit per second using their smartphones, tablet and laptop through the mobile network. That would also imply that consumers and corporate users in urban areas are likely to abandon their current mobile phone or internet service providers who are not able to match the new 4G network in terms of internet speed, convenience and cost effectiveness. So it is not just MPT and Yatanarpon who have to raise the level of their game, even Redlink, the largest private internet service provider, will have to do the same.

With a 4G network, to access the internet on laptop or desktop all that is needed is a data modem with a SIM card. There is no need to wait for an ADSL line or fibre optic cable to be laid all the way to houses or offices. In a heavily built up and congested city like Yangon the 4G network is ideal – no digging of roads to lay fibre optic cable.

With a 4G mobile network we would assume that from 2014 onwards 60 percent of mobile phones sold in Myanmar will be smartphones so that users can use internet services delivered over the high speed mobile network. Based on my observations most of the taxi drivers in Myanmar are not only driving newer cars but they are also carrying the latest model of smartphones. So as a matter of face, no one in Yangon or any major city in Myanmar would want to be caught using a traditional feature phone from 2014 onwards when a 4G network is available and all their friends and neighbors are using the latest smartphone.

If we assume a 60:40 split between smartphone and feature phone in terms of sales volume and an average wholesale price of $160 per mobile phone -the Myanmar market for mobile phone is worth $622 million, $1.2 billion and $2.3 billion respectively in 2014, 2015 and 2016 at wholesale price level. So the mobile phone importers, wholesalers and retailers in Myanmar will be laughing all the way to the bank.

So what are the impacts of the entrance of two new telecom operators on the life of the average Myanmar people living in major cities? A global study commissioned by Ericsson reported: “Globally we have witnessed the economic benefits of broadband – a 10 percent increase in penetration leads to an average 1 percent sustainable GDP growth. Doubling internet speed can improve GDP by 0.3 percent.”

First and foremost, the way we communicate with one another will be different. We will all be using instant messaging apps like WhatsApp, Wechat or Viber on our smartphone instead of sending traditional SMS. Instant messaging apps such as Wechat and Viber are free to download as long as you are able to tap into a Wi-Fi network and get onto the internet. So yes, the average Myanmar living in urban areas will be able to chat with their friends overseas using Wechat or Viber for free. We will leapfrog our neighbors who are still sending SMS as we will go straight into instant messaging culture when the 4G network is up. SMS will become so yesterday.

When we go shopping for an item we will at the same time do real-time price comparison with internet shopping sites via our mobile phone to see if the same item is cheaper online or in another major retailer just down the street.

When we go to a new part of town and we are not familiar with the roads we can just whip out our smartphones and use Google Map and our smartphones’ built-in GPS function to navigate around.

When we go to a government department to perform certain services, we will get a queue number from the ticket machine and at the same time we will have a key in our mobile number. There will be no need for waiting, instead we could go to the nearest tea shop and 15 minutes before our queue number is called we will get an SMS notification saying that our queue number is due in 15 minutes.

Location will become more important for building owners, retailers and business owners. Enterprising young entrepreneurs will create location-based services that take advantage of the 4G network to provide new services such as taxi booking, restaurant recommendation, tutor recommendation and house hunting that are delivered over the 4G network.

Online payment, money transfer and internet banking will also become possible with the 4G network.

Farmers will have real time access to spot and future prices for their commodities and adjust their growing and harvest plan accordingly.

As smart phone becomes ubiquitous in urban areas, shopping malls, restaurants and cafes that want to attract young people who are on their smartphones all the time would start to provide free Wi-Fi on their premises.

Certainly, the life of the average Myanmar people will be better due to the access to state-of-the-art mobile communication techno logy and services. My hope is that in 2017 – three years after the rollout of the 4G network -an average Myanmar person will still have time to meet their friends at their neighborhood tea shops, sit around a small table and talk about the latest football game or the latest lottery result.

Technology has a way of making life more impersonal as can be seen by the number of young people in Hong Kong or Singapore whose eyes are constantly glued to their smartphone screen and chatting with their overseas friends via WhatsApp or Facebook but do not have time to talk to their friends sitting next to them. Let’s hope the Myanmar people will have the wisdom to use the technology prudently.

Author: Andrew Tan
Andrew Tan is the director at Consult-Myanmar Co Ltd. a Yangon-based business consultancy firm that assists foreign investors to relocate to Myanmar. As part of his business practice Andrew comes into contact with many Myanmar people and is curious about how the introduction of new technology and the market practice affects the life of the average Myanmar citizens. He can be reached at info(at)consult-myanmar(dot)com.

Source: Myanmar Business Today


Note: This article first appeared on our blog on 19th April 2013 and was subsequently published in the Myanmar Business Today on 4th July 2013. Myanmar Business Today is a weekly bi-lingual business journal that publishes in English and Burmese – see jpg image of article below:

This article was published in the Myanmar Business Today journal

This article was published in the Myanmar Business Today journal (July 4 – 10, 2013 edition)

NB: The best way to find information on this website is to key in your search terms into the Search Box in the top right corner of this web page. E.g. of search terms would be “property research report”, ”condominium law”, "Puma Energy", “MOGE”, “yangon new town”,"MECTEL", "hydropower", etc.