IT SOUNDS almost archaic: a place where mobile penetration is sitting at about 10%.
But
this is the prospect that has mobile operators round the world
salivating at the chance to enter Burma, which was under military rule
until 2010.
One of the contenders is home-grown mobile giant MTN,
which has formed a consortium with Singapore telecommunications company
M1 Telecom and Amara Communications, a subsidiary of IGE, which is
reported to be owned by the sons of former Burmese industry minister
Aung Thaung.
For MTN, which is facing increasing competition in
Nigeria and South Africa, a licence to operate in Burma would be just
what it needs to boost flat revenues.
Evelin Petkov, founder and
owner of the Myanmar Business Organisation, said Burma’s
telecommunications market had poor infrastructure and excessive costs.
According
to Petkov, until the beginning of this year the cost of a sim card was
nearly $250 (about R2100 at an average rate of R8.50), but the cost was
down significantly to about $10.
A survey released this week by
research firm Analysys Mason on the Burmese telecommunications market,
said the discounting of sim cards via a lottery system had increased
access to cellphones among low-income groups.
“Even though the sim
cards are relatively cheap, they are not freely available on the market
as the supply is very limited,” said Petkov.
He said that
although the telecommunication infrastructure was underdeveloped, the
government had plans to increase penetration from 10% to 85% in the next
couple of years.
“Currently, there is only one telecom provider, a
government-owned company, but by the end of this year there will be
four companies. This will lead to competition, higher quality
infrastructure and cheap sim cards. As a result, cellphone users will
benefit the most,” said Petkov.
The Analysys Mason report also put
a damper on the Burmese government’s mobile penetration ambitions,
saying lack of rural coverage could undermine government’s targets.
“We
believe strongly in the market’s potential, and expect it to outperform
many of its nearest neighbours over a comparable time frame.
“However,
it seems unlikely that the government’s stated target of 50% mobile
penetration by 2015 is achievable because of the lack of infrastructure
outside the cities,” the report said.
Although the report lauded Burma for the new opportunities, it raised issues that tint the rosy picture.
“Some
groups in urban areas show a definite lack of interest in services, and
the willingness and ability to pay in rural areas remains untested,”
said the report.
Problematic factors included a lack of disposable
income, not being aware of services, minimal coverage in urban areas
and the use of English as Burmese scripts are not normally supported on
handsets.
“Operators working in areas close to Myanmar’s borders
will need to compete with Chinese and Thai networks, which are
reportedly popular among Myanmar’s early adopters and are likely to be
superior to the country’s own networks for the foreseeable future,” the
report said.
MTN is up against some big hitters for the licence.
They include India’s Bharti Airtel, France’s Orange Telecom and Qatar
Telecom.
However, many observers feel that as Vodafone and China
Mobile have withdrawn, MTN’s chances are good. Indeed, analysts believe
that MTN’s experience in emerging markets might tip the scales in its
favour.
“I think MTN probably has a reasonably good chance of
winning this licence,” said Dobek Pater, an analyst at Africa Analysis.
“MTN does have the experience of growing the telecoms (mobile) market in
practically greenfields operations in developing markets (some of them
similarly underdeveloped and impoverished to Myanmar),” said Mr Pater.
source: Business Day Live
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