YANGON — Competition in Myanmar’s mobile phone market is getting fierce. With sustained downward pressure on prices, the industry fears it could squeeze itself out of profitability. And things could get worse.
Last July, Myanmar’s Ministry of Communications and Information Technology said it would invite bids for a fourth mobile phone operator’s license. At first, the apparent winner was Yatanarpon Teleport, or YTP, an Internet service provider. But the company found it difficult to finance the necessary infrastructure.
Base stations and other pieces of the network would cost at least $1 billion. YTP then decided to team up with foreign telecom companies. The ministry welcomed the idea and decided to grant the license to a joint venture between a consortium of 11 Myanmar companies, with YTP at its core, and a foreign company.
Seven overseas concerns, including Singapore Telecommunications and China Telecom, showed immediate interest. But by the March 18 deadline, only the Viettel group of Vietnam had submitted a business plan, and the ministry granted it preferential negotiating rights. Viettel, YTP and its partner companies are to soon launch joint-venture talks. Under military rule, state-owned Myanma Posts and Telecommunications, or MPT, dominated the country’s wireless market.
In a bid to quickly boost mobile penetration, the government held its first mobile license auction in the summer of 2013, allowing foreign companies to bid. Qatar’s Ooredoo and Norway’s Telenor won the auction and began providing services the following year.
MPT then teamed up with Japan’s KDDI, a telecom company, and Sumitomo Corp., a trading house.
With three competitors, prices and fees have fallen significantly. The price of a SIM card has dropped from a few hundred dollars to 1,500 kyat ($1.27). The per-minute charge for phone calls has fallen from 50 kyat to 20-30 kyat. The competition is no longer sustainable, an industry representative said.
Yet Viettel’s entry may further exacerbate the situation. To cut prices, the company is taking full advantage of the human and material resources of Vietnam’s military, which essentially operates the group. Since the company set foot in Cambodia, in 2009, it has expanded operations into other emerging Asian and African markets. Its network now covers more than 10 countries.
It is also likely to have a pricing advantage over Myanmar’s other players, who are bracing to be further squeezed. The government, though, is planning to soon hold an auction for new high-speed wireless spectrum. The new 2.6 gigahertz bandwidth is faster than today’s 1.8GHz. RedLink Communications, a big Internet service provider in Myanmar, and mobile operators are showing interest in making bids.
Not long ago — after Myanmar began opening its market to outsiders — businesspeople used to refer to the country as Asia’s last frontier. But mobile penetration in the country is now estimated at 80% to 90%, and there are concerns that the market has become saturated.
Perhaps Myanmar’s undulating mobile market mirrors the country’s economy, which is experiencing a rapid transition from a closed to an open market that will eventually confront excessive competition. Source: Nikkei Asian Review Title:
The Dawei Special Economic Zone – Amid delays, local opposition to the project is growing. Investor confidence in the long-delayed Dawei special economic zone (DSEZ) is growing after Japan signed on as a third equal partner with Myanmar and Thailand this December. Japan’s backing may finally kick start construction of the billion dollar project that has been crippled by funding shortfalls since 2013. If it’s ever finished, the deep-seaport is expected to rival the one in Singapore, opening a new gateway to the Malacca Strait from the western Myanmar seaboard. The 196 square km special economic zone – scaled down from initial estimates of 204.5 square km – would become one the biggest industrial parks in Southeast Asia. Thailand and Myanmar signed a memorandum of understanding (MoU) in 2008 to develop the DSEZ; one the three special economic zones in the country expected to stimulate growth by drawing in foreign investment.
About eight years later work on the DSEZ has been minimal. On the site of the deep-seaport a single crane sits on lonely platform rising from the sea some 100 meters from shore.
Most of the land in the first phase that will see automotive parts, electronics, canneries and pharmaceuticals factories built has been plowed but construction efforts have been negligible. New delays have come up after Japan requested modifications made to the original drafts.
The vital road link connecting Myanmar to Thailand’s Kanchanaburi scheduled to begin this March has been suspended.
Japan determined 15-degree inclines along 17 areas of the 138 km new two-lane highway weren’t safe for large trucks.
Tunnels need to be burrowed into some of the mountains along the way. Meanwhile widespread local opposition to the project has been growing. The Dawei Development Association (DDA), a local grassroots coalition opposed to the project, organized a protest in Dawei in March; one of many over the years.
According to their 2014 “Voices from the Ground” report the project will affect upwards of 43,000 people living in 36 small farming and fishing villages on pristine coastline along the Andaman Sea. Residents who sold their land to investors for next to nothing are still waiting to be paid, said the report.
Others claimed their land was confiscated. In the report a photograph depicts terrified children that reportedly watch from their homes while bulldozers plowed the family’s orchard.
There are also environmental threats, according to the report. The government intends to use 2000 megawatt coal plant to power construction. Protective coastal mangrove forests have been cleared.
Road construction and deforestation has compromised watersheds causing erosion dirtying rivers and streams. The area is home to many quintessential fishing villages that rely on the pristine coastline along the Andaman Sea for their daily livelihood. If the project goes through life in this quiet and remote corner of the world will be forever changed.
However, for some locals long limited by the depressed economy it’s a chance they are willing to take, even if they don’t completely understand the ramifications the mammoth project will have on their lives and their children’s. Less than a half a kilometer from the deep-seaport, fishermen in Nga Pea Dat village remained hopeful of the DSEZ’s potential to bring much needed jobs to the region – a promise that was the main feature of initial marketing strategy touted by project proponents.
Source: The Diplomat
