Mobility in Myanmar

04 Jun 2015

It stared at me from the hotel counter: a rotary-dial analog telephone. At that time (1993), rotary-dial phones were quaint rather than archaic. But at that moment, the object seemed oddly futuristic, and using it to dial a five-digit phone number seemed an act of science-fiction.

I was in Mandalay in northern Myanmar. The capital - Yangon - was ablaze with bright oil paintings advertising movies and Burmese heavy metal bands. But after a memorable overnight train trip and a couple of days in Mandalay, the concept of simply making a phone call somehow didn’t seem to fit. I hadn’t seen a computer in the entire country, purchases were made with 45- and 90-kyat banknotes, and wheeled transport from the 40s and 50s still trundled the streets.

That was the only phone call I made in Myanmar. A decade later, the people of Myanmar remained in the rotary-dial era. But what’s happened since is a remarkable tale of mobile telephony.

While most of the country lacks an electric grid, three cities - Yangon, the purpose-built capital Nay Pyi Taw, and Mandalay - rolled out large-scale mobile services last year. And at this year’s Telecom Asia Awards, Ooredoo Myanmar became the first Myanmar operator to win an award for its MayMay initiative, which was lauded as Best Community Telecom Project.

Ooredoo launched services in Myanmar in August after securing one of two nationwide telecom licenses, and had secured more than 1 million customers within its first month of commercial operations, wrote Dylan Bushell-Embling on Myanmar has a population of around 53 million and a mobile penetration rate of just 27%, giving the market plenty of room to grow.

The launch of mobile services from Ooredoo Myanmar and Telenor Myanmar in the ASEAN nation has slammed black market-sales of SIM cards, which at one point caused “Myanmar state-owned operator MPT [to] temporarily stop selling its discounted SIM cards, citing concerns over black-market resalers,” wrote Bushell-Embling.

I recall Myanmar’s black market well from that time, the official exchange rate was 6.2 kyat to 1 USD. But any teashop would give you a 100:1 rate on large-denomination USD banknotes.

In 2012, the Central Bank of Myanmar announced that the value of the kyat against the USD would float (scrapping the ludicrous official rate), a sure sign that the country formerly known as Burma is open for real business. Telcos were quick to capitalize on the opportunity, with Ooredoo and Telenor joining incumbent operator MPT in the mobile sector.

Myanmar’s mobile subscription count grew 87.4% year-on-year to 10.7 million at end-September 2014, according to a March report by global analyst firm Ovum. According to Vivek Roy, Ovum research analyst and author of the report, “The major factors driving mobile subscriptions have been the availability of SIM cards, and the massive decline in SIM prices and call rates.” Mobile subscriptions are pegged to grow at a 21% CAGR, to reach 38.5 million at end-2019, up from 14.8 million at end-2014, as operators expand their networks to new cities and rural areas.

Before liberalization, availability of SIM cards was limited by government control, and SIM prices were incredibly high - beyond the reach of average citizens, says the Ovum report. The arrival of new players has also forced incumbent operator MPT to slash calling rates to remain competitive.

Although the entry of Telenor and Ooredoo has been promising so far, both face the task of educating users and expanding their habits beyond voice and messaging, as well as expanding outside urban cities into Myanmar’s rural landscape, which lacks basic infrastructure such as quality roads and full-time power supplies.

“However, boosting data usage and figuring out the right rural strategy will be key in driving profitability through the long term,” said Roy.


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