In Burma, the Telecoms Games Begin

By San Yamin Aung 4 September 2014

RANGOON — Let the games begin.

For the first time in Burma’s history, competition is heating up to win over tens of millions of customers in a largely untapped mobile phone market.

This week Burma’s state-backed telecoms operator, which monopolized the country’s telecoms sector for decades of military rule, put cheap SIM cards on general sale—after Qatar’s Ooredoo became the first foreign telecoms company to launch a mobile phone network in the country last month.

Long lines formed outside store in Rangoon after Myanma Posts and Telecommunications (MPT) began selling its 3G SIM cards for 1,500 kyats (US$1.50) each on Monday at authorized outlets around the country.

“I waited in line for two days but the shops are sold out now,” said Myint Win, 41, from North Okkalapa Township. He said he would try again later and was relieved that he no longer needed to wait for a lucky draw in the lotteries that MPT previously organized to distribute a limited supply of its cheap SIMs.

With its monopoly under military rule, MPT sold SIMs for up to 5 million kyats ($5,000) about 10 years ago. After a quasi-civilian government took power in 2011, prices dropped to about 250,000 kyats in 2012, and last year MPT launched its monthly public lotteries with SIMs for 1,500 kyats.

“Starting this month, there will be no more public lotteries in wards,” Kyaw Soe, who leads MPT’s telecoms training center, told The Irrawaddy. He said the general sale of cheap SIMs was possible after the Burmese telecoms firm partnered with two Japanese companies, KDDI Corporation and Sumitomo Corporation, which will invest $2 billion over the next decade to expand MPT’s services.

MPT plans to sell more than 700,000 SIMs this month and 5 million by the year’s end, he added.

High demand for the SIMs comes as many people in Rangoon express disappointment over Ooredoo’s relatively expensive Internet usage fees and poor network coverage.

Ooredoo, one of two foreign telecoms firms with a license to operate mobile services in Burma, launched its 1,500 kyats SIMs on Aug. 15 and has sold 1 million SIMs since then.

“People were shocked by the [usage] charges for Ooredoo SIM cards,” said Win Kyi, a freelance reporter from Magway Division. “Even saying one word, ‘hello,’ costs 35 kyats, and although Internet is better than MPT, the price is not convenient.”

Pyi Soe Htun, director of Lu Gyi Min Mobile Phone Shop in Rangoon, said there was high demand for Ooredoo SIMs when they first launched. “People had high expectations for Ooredoo, so they rushed to buy. But later, because of the network coverage, people lost interest, and MPT come out at the same time,” he said, adding that his shop received about 6,500 SIMs from MPT to sell at 25 branches, and sold out within a day.

“Burmese consumers mainly consider the price. Since they are familiar with a time-based charging system for Internet usage, they don’t like being charged based on volume [the amount of data they use], although both systems have advantages and disadvantages,” he added.

He said Ooredoo has delivered faster Internet speeds than MPT but has also been criticized for poor network coverage. “The customers want to communicate everywhere. It’s their first priority, and MPT is acceptable in that regard because its network covers most of the entire country,” he said.

Phyu Thae Mon, who works at the Mobile Corner Phone Sale Center in Madaya, Mandalay Division, said demand for Ooredoo SIMs at her store dropped because people could not make calls there.

“Since Ooredoo’s mobile network is not as good as people expected, most turned to MPT, which already has a network,” added Hnin Wai Lwin, the manager at Lu Gyi Min Mobile Phone’s branch in Magway Division.

Ooredoo says its 3G network covered 7.8 million potential customers when it launched and now covers more than 9 million customers. The company has 20 towers in Rangoon and says it also covers Thayet in Magwe Division, Thayarwady and Taungoo in Pegu Division, and Pyin Oo Lwin in Mandalay Division.

“We’ve been up-front about the enormous uptake in demand and some network challenges that we have faced in areas of downtown [Rangoon]. We have deployed the right technology and employed the right people for us to overcome these challenges and are confident we will continue to deliver significant improvements both in coverage and signal strength to our existing customers,” Ross Cormack, chief executive of Ooredoo Myanmar, said at a press conference in Rangoon on Saturday.

The Qatari company has reduced Internet charges to 10 kyats per megabyte for the “pay as you go” service, compared with 25 kyats previously.

On Thursday, MPT launched a promotion offering a 20 percent bonus in credit for customers who buy a 5,000 kyats top-up card, and a 30 percent bonus for those who buy a 10,000 kyats card, until Sept. 12.

“Customers have choices now, and by having competition in the market, more package plans will emerge. MPT could do as they pleased in the past by monopolizing the market, but now they have to offer better services,” said Pyi Soe Htun, the director of Lu Gyi Min Mobile Phone.