Myanmar Mobile MarketBurma Mobile Market
Burma records increasing call for wireless | Myanmar 2016
Myanmar's telecommunications industry is undergoing dynamic growth that is transforming the economy and population. MNOs' advent in the fall of 2014 will expand the ICT arena far beyond its current capacity with a range of new technology that will drastically transform the country's countryside.
Myanmar's communication industry has developed dramatically in recent years. In 2013, an astonishing 91 multinational corporations applied for two licences, which were finally granted to the Norwegian company Telenor and Ooredoo from Qatar. Entering the previously monopolized Myanmar Post and Telecommunications (MPT) markets, by mid-2015 some 30 million UMTS card had been shipped, an expansion of 518% since 2012, when there were only 5.4 million subscribers, or approximately 10% of the overall number.
In the first quarter of 2015, Myanmar was the third quickest wireless basis in the rest of the globe, behind its neighbors China and Thailand. The Myanmar Investmentcommission (MIC) reports that 31% of all FDI in the first five month of 2014/15 was in telecommunication. By 2014 and 2015, global external investments in telecommunication will reach $2.8 billion.
Regional branch specialists are expecting the further growth of the German economy in the near term. "This is a transitional period in the business and we can still count on some changes to the regulatory conditions in a more competive environment," said U Thaung Htike, CEO of Myanmar Interactive Telecom, OBG. "Burma has quickly come out of the early stages of ICT evolution.
Growing was amazing, but working in Myanmar is still a complex task. Although the entry of multinational companies has significantly simplified the course of operations, their roll-out objectives have not been easily attained. The finite nature of the country's infrastructures has slowed down the pace of importing gear, while an instable power grid means that portable turrets have to be operated at high costs and are often dependent on a choice of either photovoltaic or fuel.
To close the gaps in expertise and finance between MPT and its more prosperous rivals, the former monopolist formed a JV with KDDI Summit Global Myanmar (KSGM), a cooperation of Japan's KDDI and Sumitomo giant. Of the three NTL licencees, MPT leads the subscriber competition and exceeds the 16 million level in August 2015.
Until July 2015 Telenor is the next provider to sell more than 10 million mobile phone smart card SIMs and until June 2015 about 70 million dollars in recharging smart card sales. Ooredoo, on the other hand, will remain the largest telecom investment by October 2015 at USD 1.4 billion. The Qatar-based enterprise had already paid approximately $49.3 million in replenishments and $4.0 million by the end of June 2015.
In the first half of 2015, the company's sales totalled 140 million US dollars, while Ooredoo had earned 75 million US dollars. The ARPU for Ooredoo decreased from $7 in first quarter to $6. 5 in second quarter 2015. Similarly, Telenor ARPU fell from $6. 7 to $5. 7 in the same menstrual cycle. ABC Telecom Chief Executive Officer Daw Phyu Phyu Phyu Win said to OBG that "the advent of Telenor and Ooredoo has boosted the number of jobs available to businesses in the area, but it has also reduced the supply of professionals and raised the costs of building towers, which has had an impact on them.
Whereas there is often talk in domestic and foreign newspapers about the advent of a forth party operating company, there is already one, MecTel. This often overlooked company belongs to the military-run Myanmar Economic Corporation (MEC). Whilst the Enterprise does not have an NTL, it has a portable digital carrier licence, granted by the federal agency that has permitted the Enterprise to subscribe up to 3. 8m customer by mid-2015.
Launched in April 2013, the 800MHz system has been extended in several areas with a focus on the Ayeyarwady region. But it is difficult for the business to rival the other major players in the marketplace. The call for tenders announcement at the beginning of 2015 was only open to domestic businesses.
By August 2015, the Ministry of Communications and Information Technology (MCIT) had 17 suggestions. Until the end of December 2015 there was no formal notification of the winners of the fourth NTL. Originally known as Bagan Cybertech, then renamed Myanmar Teleport, it later became YTP under a JV with MPT.
A long-established provider of high-speed bandwidths, the firm received a licence in early 2015 to take part in communication-related activities such as fiber installations. By the end of 2015, the business had not received authorisation to move into a role as a cellular phone provider. Nonetheless, sector experts believe that YTP is well placed to benefit from the liberalization of the markets.
According to recent internal research, YTP merged with Viettel Global, the Viettel Group's capital expenditure branch, for an original $800 million, while municipal resources suggest that YTP plans to build a syndicate with Myanmar Information and Communication Technology Development Corporation and A1 Construction Company. Until the end of December 2015, however, there was no formal endorsement.
Whereas the end consumer can profit from this increasingly competitive climate, the new supplier's position is already too full. Irrespective of who will win the 4th NTL, it will be hard for them to break into the notion. Until their entry, the overwhelming bulk of Myanmar will be served by current carriers, with MecTel included.
For frequency assignment, the two multinational carriers were first allocated two batches of 5 megahertz in the 900 megahertz ( "MHz") bandwidth and two batches of 10 megahertz in the 2100 megahertz ("MHz") bandwidth, which are to be phased out in 2029. Every company approved the $500 million royalty. Telenor has already provided an extra $75 million for 5MHz from 2100 MHz since the first assignment.
Until December 2015, only MPT had been testing LTE 20 Mhz technology in the 1800Mhz bandwidth. Currently, 3G consumption is the leader in the industry. Ooredoo statistic shows that the use of smartphones among wireless subscribers doubles between Q1 and Q2015, with 80% of subscribers opting for smartphones.
Right from the start, Ooredoo decided on a pure 3G net compared to Telenor, which used a mixture of 2G and 3G technology. Telenor has, however, indicated that it will prioritize 3G cover due to the strong increase in the amount of information requested. Telenor found that speech communication rose 93%, while the use of information rose 196% between January and June 2015.
In order to meet the growing demands for information, plant owners are working on alternative options to the standard steeple system, which includes small-scale solution that can be placed on alternative locations such as light poles or roofs to enhance the overall networking performance. Building movable turrets is booming. Owners were able to skip older technologies and accelerate the deployment of them.
Investigations by the International Finance Corporation and the Groupe Speciale Mobile Association in 2014 indicate that 17,300 telecommunications storms will have to be erected by the end of 2017 in order to achieve 70% cover. It is estimated that 11,700 turrets were contracted for building between the three major contractors and eight contractors, 7410 of which were completed by October 2015, with a focus on Yangon, Mandalay and Naypyidaw.
The Irrawaddy Green Tower (IGT) is the only operator commissioned by both international companies and in charge of 2900 locations - 1800 for Telenor and 1100 for Ooredoo. Telenor said the firm was planning to build 4,000 by the end of 2015 and around 9,000 within five years.
Until June 2015 it had 2308 locations, which covered 50% of the local people. Financed by Texas Pacific Group (one of the world's biggest stock funds), Apollo Towers is in charge of the building of 1800 Telenor turrets, 1040 of which were finished by October 2015. An affiliate of the Young Investment Group named Eco-Friendly Towers has also declared its willingness to construct 700 Telenor turrets.
In addition, the Malaysian telecommunications services company OCK Group and its Malaysian counterpart King Royal Technologies concluded a 12-year contract for the construction and rental of more than 900 Telenor turrets in early December 2015. Until the end of 2015, the company had entered into a letter of intent for the construction and leasing of a combined of 5227 turrets.
By October 2015, Ooredoo had commissioned four companies to construct 4073 turrets, while MPT and its Japan partner had constructed 2,400 by October 2015. Pan Asia Majestic Eagle Limited (PAMEL) is the second biggest supplier and has raised $85 million to construct 1250 Ooredoo-tower. The Myanmar Tower Company (MTC) of the Edotco Group and Yoma Strategic Holdings (YSH) has finished 220 tower projects for the Qatar-based company by Q3 2015.
In addition, Myanmar Infrastructure Group (MIG) has contracted the construction of 500 Ooredoo turrets. Investors' trust in the branch has been underlined by the diversity of the various turret firms in coping with the challenges of gaining entry to it. Myanmar's banking industries were liberalized at the end of 2014, with certain limitations for overseas bankers.
PAMEL financing, an $85 million arrangement between five large banks in the third quarter of 2014, was one of the first of its kind in Myanmar at a period when overseas banks were still pushing for bank licences in the state. Axiata Group, the telecommunications giants from Malaysia, entered the Japanese capital markets and issued $500 million in Muslim debt in November 2015, the biggest ever issued in Malaysia.
The issuance was used to pay for the Edotco Group to enter the fronttier markets - $125 million was used to purchase a 75% interest in the company, with the other 25% still headed by Serge Pun, a giants of the area. The company raised $30 million in shareholders' capital from Myanmar Investments International Limited after it received a $250 million syndicated credit facility from Overseas Private Investment Corporation, a U.S. Gov. Financing Developmentfund.
Although telecoms operators have been able to reduce financing constraints, they must overcome the many barriers to developing infrastructures. Burma continues to suffer from a heritage of past nationalization. Turret firms still have problems, as the sites are hard to buy and a lot to negotiate when concluding property deeds.
At present, it is not permitted for international enterprises to own any state. This means that many turrets run on a mix of diesels and alternate energy resources, such as sun energy, which increase operating cost, especially during the rainy period when there is little use of it. Myanmar also has a record of inter-ethnical and inter-faith conflicts, making the extension of reporting to some areas challenging.
To meet the challenge of expanding the grid, the owners agree to pool the use of the turrets, resulting in higher revenues for the turret firms and cost reductions for the owners while accelerating grid uptake. Spacing of the turrets is uncommon in city areas and Myanmar.
Huawei, the global communication enterprise, accounts for just over 50% of the total smartphone sales, compared to 71% in 2013. Whilst the Group' s overall sales are declining due to the increase in global import such as Apple, Samsung and Vivo brands, the number of mobile phone sales is still growing at a steady rate as net reach new towns.
Mileage Communications Myanmar's poll of 250 individuals in Yangon found that 37. That underscores the growing buying strength of Myanmar's up-and-coming centre-range. Digitized currency will become more dynamic in 2016 as more and more companies take advantage of Myanmar's urbanization. They work with a number of different banking institutions and solutions vendors to create e-money transactional bank account.
A number of commercial and residential customers have already started using our services. However, on the other side, it is mainly non-banks that are targeted and since only 6% of adult users will have ATM in 2014, the growing market for electronic funds is significant. Whilst the approach has been successfully piloted in Africa's Kenya, the Myanmar approach is expected to be more similar to other Asia as well.
"This is a pioneering area for Myanmar. This is the first year that many of those who have been foreclosed from the finance industry can transmit and accept funds on their wireless devices," Brad Jones, Wave Currency Chief Executive Officer (a Yoma Bank-Telenor partnership), said to OBG. Myanmar launches its first portable cash service in January 2014 and more and more items have been made since.
Burma is still a cash-based company. Telecommunication is still a cornerstone of Myanmar's economic growth and is supporting the growth of other industries, in particular those providing finance.