Wednesday, 9 April 2014

From isolation to 3G data at warp speed

Ooredoo is spending $1 billion in Myanmar this year to roll out almost 1,000 3G base stations to cover 30% to 40% of the population of the country, where just 1% have access to the internet and a SIM card still costs $140.

Ross Cormack, CEO of Ooredoo Myanmar, tells Telecom Asia group editor Joseph Waring about his excitement working in the newest emerging market, the huge pent-up demand for mobile and the significant challenges faced.

“We think of it as one of the last frontiers markets in telecom -- less than 10% is penetrated and with a large population of about 65 million,” Cormack said. “And it’s definitely a market being watched by the whole world.”

He said the country is at the inflection point of seeing real growth in the future. Already the government has forecast growth at about 6% over next few years.

Since the telecom infrastructure is of course one of the enablers of all the other industries that a country needs in the modern age, “telecom is essential for developing the country’s abundant natural resources – from hydrocarbons to gems and metals.”

People are just beginning to discover Myanmar as it starts to open up, so it has a huge untapped tourist market. He added that only about 35% of the population has access to electrical power. “For the liberalization of this and every other industry, telecommunications is essential as well.”

A clear sign of the vast pent-up demand is that SIM cards still cost as much as $140 since the current networks can’t support the number of people who want to use them. Last year the price was $400-500 and two years ago a SIM was $2,000.

For most people smartphones will be first internet access they’ve had. And given that internet access is only available for 1% of the population, he said “you can see the scale of the demand that exists.”

“We’re very excited by all this, but clearly there are significant challenges. It’s a huge country -- the second largest country in Southeast Asia. We’re already in the largest one, so we know something of the challenges of scale.

“It’s not a very urban country. The biggest city has just over five million people and 75% of the population lives in rural areas. It also has a mixture of somewhere around140+ ethic groups.”

Six-month target

Ooredoo has committed to covering 97% of the population, which is between 60 million and 65 million people, within five years. With a planned investment of $1 billion this year, it will start this summer with 3G launches and by the end of Q3 cover the majority of the major cities and highways between Mandalay in the north and Yangon in the south, which is 30-40% of the population, with 800 to 1,000 base stations.

The company has announced previously that it will cooperate with Telenor for passive tower sharing for fiber.

“We are certainly open to sharing, and have declared that where we’re building the two competitors can choose to co-locate on those towers. Over the next few months we’re sure we’ll start to share significant numbers of towers, because it helps lower the cost to build and the cost to serve.”

This will speed up rollouts and keep costs down, which supports the government’s objective of creating more affordable mobile services.

He claimed that the country’s bid for licenses last year was the most competitive ever.

“There were 92 players at the beginning of this. The world has never seen this many competitors for licenses before. That’s a tribute to the government’s approach to this whole process, where they were determined it should be an open and transparent international competition, which would challenge the bidders to help the country with its modernization.”

Based on the bidding documents, he said the government was challenging the players in every way to help the country leapfrog into the future.

Look for Part 2 soon: Hiring, monsoon rains and local government red tape

Cormack will be speaking at CommunicAsia on June 17 on Connecting Rural and Remote Regions in Myanmar at 3:30 and on a Power Panel on provisioning broadband networks at 11:30.

source: TelecomAsia
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