Stage set for telecom revolution

The two decades long monopoly of the Myanmar Post and Telecommunications (MPT) in the telecom sector has come to an end with Ooredoo Myanmar launching its mobile SIM cards at the end of July.

This marks the beginning of a market where consumers will have choice and industry players compete with better services. Myanmar people have been waiting for it for long. Earlier, they had no alternative to the MPT. Now, they have a choice, with another – Telenor Myanmar – also entering the market soon.

Myanmar people have had bitter experiences with the MPT’s services. Having no other choice, they had to pay very high service fees, too.

The MPT introduced its CDMA 800-megahertz mobile SIM cards in 2000. Those mobile numbers started with 0980. Each SIM card cost in the range of kyats 2.5 million (US$2,500) to Ks 5 million ($5,000). 

In 2002, GSM SIM cards were introduced and they were first 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 the rich  could afford it. After that, government permits for purchase of mobile SIM cards became a million-kyat business. People applied for the permits and, once they received it, 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 available for Ks 1,500 ($1.5) through lucky draws.

Mobile phones have generated enormous public interest and mobile handsets are seeing a surge in demand. However, illegal imports of mobile handsets are dominating the market. The state is losing huge amount in revenue due to the illegal imports. So, the government revised the tax rates for mobile handset imports.

Upon seeking tenders from local and foreign telecoms operators interested in Myanmar’s telecommunications sector, more than 90 companies submitted their applications. They were whittled down to a shortlist of 12 later. Finally, Norway-based Telenor and Qatar-based Ooredoo were announced as winners of the nationwide telecom licences on July 27, 2013. The two companies had to wait until February 2014 to be finally awarded the licences.

They expedited preparations to roll out their telecom services. This month, Ooredoo Myanmar started selling its SIM cards. These cards were intended for trial use. The actual launch will take place on August 15, Ooredoo Myanmar’s spokesperson said at a press conference on Saturday.

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 telecom operators in Myanmar, the one that lags behind in the race is Yatanarpon Teleport. Although Yatanarpon Teleport has selected a foreign telecom company as its partner, it has not officially announced it yet. They have neither finished applying for the licence, nor have they started setting up telecom towers. Nevertheless, a spokesperson from Yatanarpon Teleport said the company would attract users in unique ways and outperform competitors. 

“I paid Ks 1.5 million (US$1,500) for my GSM phone that starts with 0951, but I only got about Ks 300,000 when I sold it,” said Kyaw Linn, who has been using mobile phones the last few years. “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 initial promotion programmes 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 at the same price,” Kyaw added.

Although Ooredoo’s free promotions have attracted many people, its unstable service quality and high Internet fees have come in for criticism.

When 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 1MB, package plans for 1GB usage or 2GB usage are still unknown. The company said the plans would be announced in mid-August so the consumers still need to wait and see the outcome.

“To tell the truth, Ks 25 per 1MB is still expensive. The other day, my friend used 20MB 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. 

Smartphone users have enjoyed using Ooredoo’s video-call service as such a service had never been offered before in Myanmar. 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.