Internet providers mull a more competitive future

Internet Service Providers (ISPs) say they are preparing for competition as the sector liberalises to allow entrants in the future, though insiders say Telenor and Ooredoo’s emphasis on their mobile rollout may buy fixed-line ISPs some breathing room.

With only state-run Myanmar Posts and Telecommunications (MPT) and Yatanarpon Teleport Company (YPT) currently licensed to provide broadband services – though a number of companies operate off their licences – the sector is likely to see several ISPs enter the market in the years ahead.

William Greenlee, a partner with DFDL law firm, said clarification from the telecoms law and further government notifications will determine to what extent the doors are to be opened for new ISPs, but industry players say they are already preparing for an anticipated influx of market entrants.

YTP CEO U Tin Win said that only competition can bring prices down for Myanmar’s fixed-line broadband internet prices.

“Competition’s good,” he said. “Of course everybody has to fight for better service with competition, but everybody needs better service.”

Domestic WiMax provider Redlink currently operates off of YTP’s licence, but plans to apply for its own licence and offer other broadband services such as ADSL fiber-optic cables when the process is established, said Redlink vice chairman and co-founder U Thein Than Toe.

The firm currently controls about 23 percent market share, compared to over 30pc for both MPT and YTP, he said.

Redlink is adding 20 WiMax

towers to its existing 40 in Yangon, while opening a number of sales and service offices and offering battery-powered WiMax receivers, with a goal of becoming the largest broadband industry player by March, he said.

“We’re not a competitor for the mobile operators. We’re in a different market from them,” said U Thein Than Toe.

Mark Robinson, Southeast Asia head of telecoms for Herbert Smith Freehills law firm, said the mobile broadband market will likely be the driver of internet penetration in Myanmar, but added there will be opportunities providing fixed broadband with businesses and urban dwellers looking for faster speeds and more reliable connections.

Domestic internet penetration stands around 1pc according to most estimates.

ISPs such as Redlink and YTP should be more concerned about competition from newly licensed ISPs in the future than direct competition from Telenor and Ooredoo, according to Mr Robinson.

U Thein Than Toe said he would like the regulator to begin the process for awarding ISP licences, as the integrated licences had already been awarded for mobile operators meaning the process could also be begun for ISPs.

Although Redlink does not plan to apply for the specific licence allowing it to lay a fibre backbone, it hopes new licensees could construct a backbone network in competition with MPT which would drop bandwith prices and improve connections.

“This would allow us to sell back to the consumers at a cheaper rate than now,” he said.

Redlink has begun considering how to finance a planned expansion, though YTP and MPT say they are actively seeking foreign partners.

In addition to its ISP business, YTP also claims one of four mobile licences, and is seeking an investor with technical expertise and capital to assist a future expansion of about US$1 billion, said U Tin Win.

“It hasn’t been easy or difficult to attract [an investment partner],” he said. “It’s just like a date. It’s easy to date two or three girls, but not easy to choose one to marry.”

The firm has already looked at two or three foreign telecos, “but we have not chosen our bride,” he said, declining to name the companies.

Sally Austen, a consultant with Herbert Smith Freehills, said a large part of the attraction to winning the telecoms license over entering the market through a partnership with MPT or YPT was the chance to exercise 100pc control over the venture.

French operator Orange and Singapore’s SingTel have claimed interest in MPT after losing out for the licences earlier this year, according to reports, though MPT could not be reached to comment for this article.

Source: Myanmar Times

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