Myanmar, a country with a population of over 53 million and roughly 800,000 mobile subscribers, is Asia’s final frontier for mobile adoption.
Its penetration rate of 1.5% was even surpassed by North Korea in 2010, which in the first quarter of 2011 had over 535,000 reported subscribers and a corresponding penetration rate of 2.3%.
While the future of the industry in the country is certainly a mystery to all with perhaps the exception of the ruling military junta there are a few recent market developments of note and a growing number of suitors looking to invest in the Burmese market.
The Burmese market is notable in that all communications in the country are controlled by Myanmar Post and Telecommunications (MPT) but the operator is running several different networks at present, including CDMA 450 MHz, CDMA 1800 MHz, GSM 1900 MHz and UMTS 2100 MHz. Interconnection is not well established within these networks and as a result multi-phone use is common meaning that the actual user penetration rate is actually under one percent. Furthermore, Myanmar also suffers from a lack of base stations and slightly more than 200 in the whole country, almost exclusively in the commercial hub Yangoon and the new capital Naypyidaw. This gives the country very limited capacity - especially for international traffic - as submarine cable links are few and far between.
Myanmar mobile subscribers by technology, 2011
On top of the interconnection, coverage and capacity issues, pricing is the main reason why mobile phone uptake is so low in the country. Due to the limited number of phones official handsets retail for anywhere from $600 to $1400, although cheaper black-market alternatives do exist. But while the official SIM card price is roughly $150, black market prices run upwards of $600.
Despite this, the local calling rate is relatively low at $0.05 per minute. But with a nominal GDP per capita of $702 per year, mobile phone ownership is still out of reach for most citizens. Furthermore, even for high-end users there are reports of users having their service terminated due to excessive call volumes.
Due to trade restrictions and other political issues, Chinese vendors have dominated most aspects of the Burmese market. Huawei and ZTE are major suppliers on the network side and have a sizeable share of the handset market. Chinese vendors have also implemented a wireless broadband technology called McWill (likely the Chinese WiMAX alternative which never materialized in the mainland) in 2011 which was famously installed in the home of politician Aung Saan Suu Kyi.
Vietnam is another regional country looking to become more involved in the country’s telecommunications sector. The incumbent fixed operator announced in early 2011 that it had secured the rights to work in cooperation with Yanaporn Telecom to build a manufacturing plant in the country to provide both mobile phones and base stations, both of which the country desperately needs. Furthermore many foreign players such as China Mobile and Viettel have expressed interest in a direct network investment in the market.
The bottom line is that a degree in political science would likely be more useful for forecasting the Burmese market than one in economics or engineering, and as a case in point the country just recently instigated a harsh crackdown on VoIP usage, but if the triple-digit penetration mobile uptake figures of regional such as Vietnam, Malaysia, Indonesia and Thailand are any indication, when the mobile market does open up it will happen in a big way.
Marc Einstein is industry manager at Frost & Sullivan. For more information go to www.frost.com