Now two overseas companies will soon tap into that hunger for Internet services, mobile phones and the other technology advances that most of the world has enjoyed for years. Today, as Myanmar pries open its economy, mobile phone use is up to 10% of the population of more than 60 million, while fewer than 7% now have Internet access. But these rates are set to skyrocket at fiber-optic speed as Norway’sTelenor and Qatar’s Ooredoo start rolling out modern equipment over the next three months. Ooredoo plans to invest $1 billion this year and bring service to 70% of the population by the end of next year–within five years 97%. Telenor, a veteran of tough Asian markets, also is pledging $1 billion to start. “We’ve never entered a market before where demand is so visible,” says Sigve Brekke, Telenor’s longtime head of Asian operations.
Myanmar is one of the world’s poorest countries, but Brekke says Telenor will be able to reach a mass market by following the strategy it developed in India, where it arrived late. There Telenor found a large pool of potential customers who couldn’t afford the existing services. So instead of signing up customers for standard packages of voice and Internet services, Telenor tailors its menu to individual customers; for instance, offering access to only Facebook at infinitesimal fees–less than 2 cents a day, or roughly 8 cents a week. Brekke says that in MyanmarTelenor will offer 3G service and will eke out a profit even with monthly revenue averaging only $1 to $2 a user. Ooredoo Chief Executive Ross Cormack, who has relocated to Myanmar, declines to discuss exact pricing but insists that his service will likewise be affordable for the masses.
Both companies have a history of winning emerging markets. Most of Ooredoo’s initial experience came close to Qatar. “We went to Iran when it had very low mobile penetration, and now it has some of the highest rates in the world,” says Cormack. Ooredoo–the name means “I want” in Arabic–has also been successful in Iraq and Palestine, as well as in Indonesia, Singapore, Laos and the Philippines.
Telenor’s roots go back to 1855, when it was Norway’s state-operated telegraph monopoly. Yet it is an aggressive, innovative competitor in Asia, with operations in Thailand, Malaysia, India, Pakistan and Bangladesh. Brekke suggests that Bangladesh offers parallels to Myanmar. Telenor entered the country in 1997, when “very, very few foreigners took any investment or believed that the average consumer could afford these kinds of services. Today we have a highly profitable company, delivering more than 50% margins.”
Many see the same potential in Myanmar. Thaung Su Nyein, 37, left Myanmar as a child in the late 1980s but returned in 2000 as an erstwhile entrepreneur, opening an Internet cafe that the authorities quickly closed. Now he’s a publisher, operates two portals, offers e-services and employs 450 people. He also has helped organize Myanmar’s BarCamps since the first one in 2010. Many come to the event simply for a demonstration of how the Web works, he says. Few can sample the real thing. “Kids elsewhere would watch this sort of stuff on YouTube. But our kids had to physically gather to hear us explain and share knowledge. They were hungry for knowledge.”
More than 90 companies, including China Mobile , India’s Airtel and SingTelof Singapore, expressed interest when the government said it would award contracts for bringing the country’s telecom services up to speed. Under a military government Myanmar had been off the grid for decades. Until very recently connecting to the outside world was a crime. People went to jail for owning an unauthorized fax machine. Anyone lucky enough to have access to the Internet got a highly censored version until late 2011. And mobile service was expensive and restricted to the elite. Less than a decade ago the charge for a SIM card was $2,000 or more. Now they cost $100 to $150. Both Cormack and Brekke say they would slash prices to under $2.
Customers will be lining up. Says Wout de Jong, chief operating officer of Red Dot, a startup that offers mobile payments, or wants to when the infrastructure is ready: “The rollout of cheaper, more accessible and quality communications services will benefit everybody: consumers, businesses, government, the operators and, of course, Red Dot Network.”
Expect national celebration, says Thuang. “The whole country is looking forward to Ooredoo and Telenor beginning operations. Opportunities are endless. Every smart businessman will be thinking mobile.”
Still, the challenges are formidable. Roads in Myanmar suffer from decades of neglect and regular monsoons. Parts of the country are still consumed by rebel fighting or ethnic turmoil. Simply lining up places to erect thousands of cell towers is a monumental task. “This is the first time Myanmar has done anything like this,” says Cormack. “We are filing for hundreds of building approvals.”
Both telecom pioneers are keen to play a role in the rebirth of a country that once was among the richest in Asia. “This isn’t just another market with 60 million people for us,” says Brekke, extolling the chance “to impact this society, to open up the world for those villagers. In remote villages there is no telecommunications, there is no road, people have hardly any relationship to others except to those sitting in the villages. This will revolutionize societies.”
Cormack notes that Ooredoo has already hired more than 800 locals. Eventually both companies will employ thousands, not counting independent phone vendors and other service providers. “This is the last frontier of telecommunications,” he says. “There is nowhere more exciting.”