Fri 18 Jan 2013
Filed under: Business / Trade,Inside Burma,News
The resignation earlier this week of Burma’s telecoms minister was due to his refusal to reduce the price of SIM cards for mobile phones to levels sought by the president, according to sources close to the ministry.Thein Tun, who served as the minister of Myanmar Posts and Telecommunications (MPT) until his resignation was announced by state media on Wednesday, reportedly disagreed with a plan to drastically cut the cost of buying a SIM card during a cabinet meeting on Monday.
The ministry was due to hold a press conference on Wednesday to announce the new price, but it was hastily called off because of the minister’s resignation, the sources said.
The President’s Office had called for the price of a SIM card for GSM and CDMA 450 MHz handsets to be set at 50,000 kyat (around US $55), but Thein Tun argued that the MPT would lose half of its investment if it sold the cards at that price.
Thein Tun reportedly wanted to produce 4 million SIM cards—enough for roughly 10 percent of the country’s population—and sell them at 200,000 ($220) apiece. However, this price would put the cards beyond the reach of most Burmese consumers.
“[Thein Tun] felt that the President’s Office didn’t trust his plan, and he wasn’t happy that he couldn’t set the price himself, so he quit,” said Tun Tun Lwin of the IGE Company, which has invested in the Burmese telecoms market in a joint venture with Myanmar Yadanabon, a leading local IT company.
The ministry, which has already produced 3 million SIM cards, has also come under pressure from private companies to sell them at a cheaper price. There are currently 13 companies working with MPT to expand access to mobile phones in Burma.
As of Friday, it was still unclear how much consumers will have to pay for this access, which is now taken for granted in many parts of the developing world. “We will make a public announcement when we have set the price,” Ko Ko Aung, a senior MPT engineer, told The Irrawaddy on Thursday.
According to Tun Tun Lwin, this announcement may have to wait until after a new minister is appointed to replace Thein Tun. “Hopefully, it will be sometime in April,” he said.
Burmese media reports attracted intense interest recently when they suggested that SIM cards could soon be sold for 80,000 to 120,000 kyat ($90-135) apiece—a price range that would make them more affordable for many.
The cost of using a mobile phone in Burma has long been far higher than in neighboring countries, largely because of the monopoly held by the military-dominated MPT.
On Wednesday, however, the government invited local and foreign companies to submit investment proposals for nationwide telecommunications services, including telephone and Internet connectivity.
According to a notice in state-run media, two companies will be awarded telecommunications licenses. Expressions of interest should be submitted no later than Jan. 25, it added.