Tue 5 Aug 2014
Filed under: Business / Trade,News
Two-decade long monopoly of the Myanmar Post and Telecommunications (MPT) in Myanmar’s telecoms sector has come to an end when Ooredoo Myanmar launched selling its mobile SIM cards at the end of July.
This can be the beginning of a market where consumers have choice and industry players compete with better services. Myanmar people have been awaiting it so long. They had no other choice than the MPT for a long time. Now, they have got another choice and Telenor Myanmar is also coming soon.
In fact, Myanmar people had bitter past experiences with the MPT’s services. Having no other choice, they had to pay very high service fees.
The MPT introduced CDMA 800MHz mobile SIM cards in 2000. Those mobile numbers started with 0980. Each SIM card cost ranging from Ks 2.5 million (US$2,500) to Ks 5 million ($5,000).
In 2002, GSM SIM cards were introduced and they were firstly distributed at the per unit price of Ks 500,000 ($500). Later, their price rose to Ks 1 million ($1,000) and then to Ks 1.5 million ($1,500).
Then, mobile phones were a luxury product in Myanmar and only rich people could have it. After that, government’s permits for purchase of mobile SIM cards become a million-kyat business. People applied for the permits and, once they received, they sold the permits to others.
On February 14, 2011, those SIM cards were again sold at Ks 500,000 ($500). On March 14, 2012, their price was reduced to Ks 200,000 ($200).
On April 24, 2013, CDMA 800MHz SIM cards were at Ks 1500 ($1.5) through lucky draws.
Mobile phones become a public interest and mobile handsets become goods on demand. However, illegal imports of mobile handsets have dominated the market. There was big loss in state revenue due to illegal handset imports. So, the government revised the tax rates for mobile handset imports.
Upon inviting local and foreign telecoms operators interested in Myanmar’s telecommunications sector, more than 90 companies submitted their applications. They were whittled down to 12 shortlists later. Finally, Norway-based Telenor and Qatar-based Ooredoo were announced as winners for nationwide telecoms licenses on July 27, 2013. The two companies had to wait until February 2014 to be finally awarded the licenses.
They expedited preparations to roll out their telecoms services in Myanmar. In early August, 2014, Ooredoo Myanmar started selling its SIM cards. These cards were actually intended for trial use. The actual launching will take place on August 15, Ooredoo Myanmar’s spokesperson said at a press conference on August 2.
Telenor Myanmar is also going to launch its SIM cards in September. Their SIM cards will start with the number 0979 and their employees are testing the SIM cards, said Telenor Myanmar.
Among the four telecoms operators in Myanmar, the one that lagged behind the race is Yatanarpon Teleport. Although the Yatanarpon Teleport has selected a foreign telecoms company as their partner, they have not officially announced it yet. They did not finish applying for the license, either. They also have not started setting up telecoms towers. Nevertheless, a spokesperson from Yatanarpon Teleport claimed that they will attract users in unique ways and outperform the competitors.
“I paid Ks 1.5 million (US$1,500) for my GSM phone that starts with 0951, but I only got over Ks 300,000 (US$300) when I sold it back. I bought a Ks 1,500-GSM card in the black market for Ks 100,000 (US$100). Now, Ooredoo SIM cards have been released and I have never seen such kind of initial promotion programs during the MPT era so I bought it. MPT only sold the Ks 1,500 SIM cards through a lucky draw. This is the first time I can buy the SIM cards freely in the market with the same price,” said Kyaw Linn who has started using mobile phones since a few years ago.
Although Ooredoo’s free promotions have attracted many people, its instable service quality and high internet fees have received criticisms.
When Myanmar Posts and Telecommunications (MPT) tried to change the time-based charging system to volume-based charging system for mobile internet usage by charging Ks 2 (US$0.20) per 100 KB (Ks 20 per 1MB) in 2012, the plan was met with objections and was eventually cancelled. Although Ooredoo announced that it will charge Ks 25 (US$0.25) per 1 MB, package plans for 1GB usage or 2GB usage are still unknown. The company said the plans will be announced in mid-August so the consumers still need to wait and see the outcome.
“To tell the truth, Ks 25 per 1 MB is still expensive. The other day, my friend used 20 MB just by browsing Facebook and downloading a video. It is good that extra minutes have been included in the SIM cards and internet services have been provided, but the internet fees are too expensive,” said Zaw Min Oo from Myanmar Computer Federation.
“[Ooredoo] has been able to offer more satisfying sales than MPT. Still, I want them to reconsider the internet fees. We want the internet speed offered by the company, but we need to calculate how much we can spend before using it now,” said an official from Today Mobile shop.
Smart phone users have enjoyed using Ooredoo’s video call service as such kind of service has never been offered in Myanmar before. However, Ooredoo SIM cards cannot be used with all mobile handsets. Especially, mobile users using Dual SIM handsets for both CDMA 800 and GSM SIM cards have faced difficulties in using Ooredoo SIM cards and the majority criticised that CDMA 800 MHz (MEC) phones were a waste of money.
Myanmar Posts and Telecommunications and Japan’s KDDI Corp and Sumitomo Corp signed a joint operating agreement in Nay Pyi Taw on July 16 and the Japanese company announced that it will invest US$2 billion.
Although MPT said it will continue to operate as a separate corporation independent from the Ministry of Communications and Information Technology, but its staff, office, and property ownership situation are still unclear. MPT will obtain telecoms operating license like the two foreign telecoms operators and collect all the scattered phone numbers, according to the Directorate of Telecommunications.
MPT’s promotion program that was released around the time Ooredoo started selling its SIM cards have been criticised for disappointing users. According to the promotion program, a user can call up to three phone numbers for Ks 25 per minute after paying Ks 2,500 (US$25) for initial fee.
“MPT is still the useless even at the last minute. Is this really their good-will toward users?” said a user.
If MPT continues to remain the same without any changes, it may lose many users and it can only attract them after making a reform. Nevertheless, only a competitive market can control the quality and prices and a miracle will soon come for the Myanmar telecoms industry in the near future.