Thursday, 23 May 2013

Myanmar dials in to growing mobile market

Myanmar's increasing engagement is fuelling demand for mobile phones in a country described as less connected than North Korea.

Juice seller Ko Thet is among the emerging aspirational consumers who want to connect with each other and the outside world.

He sells juice from his sugarcane grinder at an intersection in downtown Yangon, making between $20 and $40 a day.

Like most people in Myanmar, his meagre income doesn't allow him many luxuries, but he has been able to scrape together enough money to buy a phone and secure a SIM card - a relatively rare commodity.
"The handset was about $40," he said.

"The SIM card was about 200,000 kyats ($US230)."

Myanmar has thus far missed out on the telecommunications revolution that spurred social change and economic growth throughout the world. 

Telecommunications experts say that Myanmar is last remaining untapped market. 

The former military government neglected the sector, building only a skeleton network that supported a small number of subscribers. 

For a long time, extraordinarily high prices made mobile phones a luxury item for the rich - when introduced a decade ago, SIM cards sold for $7,000.

They gradually fell to around $200, but compared with neighbouring countries, where cards cost only a couple dollars, the prices are still prohibitively high.

Sigve Brekke, regional head of telecommunications firm Telenor, says part of the problem is that government companies still control the entire industry.

"There is only one operator with very expensive services, and of course that's the reason also that so few people can afford it," he said. 

"So I think when, you know, open up with two new licences you'll see an explosion, as you have seen in other markets."

Along with 11 other bidders, Norway's Telenor is intent on securing one of two licences to begin operating in Myanmar, as part of the reform process Myanmar started two years ago. 

The country's new quasi-civilian government hopes a connected population will contribute to economic growth. 

Mr Brekke says there's evidence of a close link between mobile penetration and growth in GDP.

"If you are able to actually grow the mobile penetration, for every 10 per cent you grow, you grow your GDP with one to two per cent," he said.

Decades of isolation and mismanagement by successive military regimes have left Myanmar the second poorest country in Asia after Afghanistan. 

Mobile penetration is estimated to be between four and eight per cent, compared with neighbouring Thailand where people often have more than one SIM card and penetration is more than 100 per cent. 

Myanmar's government is shooting for 80 per cent penetration by 2015. 

The government has begun releasing monthly batches of $2 SIM cards, but with demand far exceeding supply, it has been forced to introduce a lottery system.

source: ABC News

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