Advising on Telecommunications in Myanmar
Prior to a recent reforms Myanmar had some of the lowest internet fixed and mobile phone penetration rates in the Asia. It also suffered from a network interconnection problem and a chronic lack of base stations (almost all of which are situated in or around the commercial hub of Yangon or the capital Naypyidaw). Over the course of 2012 – 2013 the mobile phone penetration rate increased to approximately 27%. The increase was due to investment by, the Government working in cooperation with new private telecom licencees Norway’s Telenor Group (Telenor) and Qatar’s Ooredoo (Ooredoo) (formerly Qatar Telecom).
Ooredoo and Telenor Myanmar
In June 2013 Ministry of Communications and Information Technology (MOC) announced that Telenor and Qatar’s Ooredoo would be issued licences to operate in Myanmar. Prior to the eventual granting of licences to Ooredoo and Telenor in February 2014,the Myanmar Post and Telecommunication (MPT) were the sole provider of telecommunications in Myanmar. Ooredoo and Telenor were selected from a shortlist of 11 companies and consortia who had submitted expressions of interest in telecoms licences that included Vodafone Group Plc., China Mobile Ltd, Singapore Telecommunications, KDDI Corp, Digicel, Axiata, Bharti Airtel, MTN, Vietnam’s Viettel, and Millicom International Cellular.
Over the course of 2014 Ooredoo launched its service on 4G LTE. It also plans to manufacture and sell mobile handsets in Myanmar. Ooredoo, which has previously enjoyed success in Iraq and Palestine, as well as in Indonesia, Singapore, Laos and the Philippines, has already hired more than 800 staff locally. Ooredoo plans to invest US$15 billion over the next 15 years and roll out almost 1,000 3G base stations. Within the next five years it intends to offer voice and data services to 97% of Myanmar’s population.
Telenor, which also has operations in Thailand, Malaysia, India, Pakistan and Bangladesh, launched its Myanmar service on 2G and 3G networks and is using High Speed Packet Access (HSPA) and Long-Term Evolution (LTE) technologies to install mobile networks. Telenor has entered into a partnership arrangement with Opera Mini, whose technology optimizes and compresses web pages requested by users in their own servers before sending them to the users’ mobile devices, making for a faster and smoother mobile Internet experience. The technology essentially reduces data usage, which saves mobile data costs for the users (currently at 0.66 to 1 cent per MB in Myanmar) while simultaneously reducing network load Telenor..
The two companies have temporarily assigned call charges of K 25 (U$ 0.025) per minute and are selling SIM cards at approximately K1,500 (U$ 1.52) each.
The MOC predicts that the mobile phone penetration rate will reach 50% by the end of 2015 and 80% by the end of 2016. The MOC has also estimated that four million mobile handsets were sold in Myanmar by the end of 2014 and that it expects another 14 million handsets to be sold by the end of 2016.
In 2014 the MPT, which retained its licence, entered into a partnership with Japanese mobile operators KDDI and Sumitomo Corporation who will invest approximately US$83.83mn over 10 years.
From 2015 onwards the Viettel Group, Vietnam’s largest mobile network operator and a government-owned enterprise wholly owned and operated by Vietnam’s Ministry of Defence, will invest approximately US$1.8bn in Myanmar to establish a mobile phone network as part of a joint venture with Myanmar’s Yatanarpon Teleport, holder of the fourth mobile phone licence, and bring in $800mn in the deal.
For further information on telecommunications in Myanmar please refer to Charltons’ presentation “Telecommunications and foreign investment in Myanmar“.