Wed 10 Oct 2012
Filed under: Business / Trade,Inside Burma,News
A telecom turf battle is shaping up in Burma as more foreign companies are lining up to get a foothold in what experts say will be one of the country’s most rapidly growing sectors. The government has said it will unveil a tender offer for foreign firms, but no date has been announced.
Axiata, a Malaysian telecom firm, is one of the latest companies expressing interest, joining global players like Norwegian firm Telenor (parent of DiGi.Com Bhd); Digicel, the largest mobile operator in the Caribbean; Vietnam’s VNPT-Fujitsu; Russian heavyweight VimpelCom; and Sweden’s TeliaSonera AB. They have all expressed interest in four state telecom licences that will awarded, according to reports. Telecoms suppliers like China’s Huawei are positioning themselves as network suppliers and consultants, said a report on The Star website.
The Burmese government is in the process of selecting a consultant that will oversee the tender for the telecom licences.
The government has said that four telecom operating licences would be granted: two for Burmese companies and two for foreign firms with 4G services targeted as early as 2013.
One report earlier said a regulator agency would be formed and state-owned Myanmar Post and Telecommunication, the country’s sole operator, would be privatised to form the Myanmar Telecoms Company, which would be awarded one of the mobile phone licences. Another would go to local ISP Yataraporn Teleport, said the report.
Axiata has stakes in 10 telecom companies across Asia, with over 200 million mobile subscribers.
A Telenor official was quoted as saying: “What is needed now is for the government to establish a sound legal and regulatory framework that provides the necessary predictability and security for foreign investment. With its geographical location, low mobile penetration and expected economic growth, it is natural for us to consider Myanmar.”
Gerard Teoh, a Malaysian corporate adviser, said as more Burmese jobs are created, local residents would want to obtain communication devices.
“The pent-up demand and growth potential is obvious, but the landscape is highly competitive although worth the effort as ultimately, it proffers a coveted prize in the form of a telco licence in one of the world’s most untapped mobile markets,” he said.
Teoh said residents were already buying smart phones made by Chinese telecom Huawei at prices of around US$ 150 per phone. “Over time, more will be able to afford it (smart phones). So the key now is to develop new services to cater for this growing group.”
Other areas with potential are Internet service provider (ISP) and wireless and data centre businesses, he said.
There are limited telecom services available currently and penetration rates are low.
Usage is said to be extremely low, at just 1.24 per cent of the population in 2010, compared with 64 per cent in Laos, 57 per cent in Cambodia and more than 100 per cent in Thailand and Malaysia where individual ownership of multiple phones pushes usage above population levels, according to the Asian Development Bank.
The Burmese government said the current level was 5.6 per cent, but experts doubted that, one report said.
Teoh said: “There is a hunger for growth and new technology all around. It is hard to predict the pace of growth of things like mobile telephony.”