SIM Card Revolution Still At Least Eight Months Away, Says Telenor Chief
By Simon Lewis 3 October 2013
RANGOON — Mobile phone operator Telenor expects to have its license to operate in Burma by the end of the year, but it will be at least another eight months until long-awaited affordable SIM cards become available, the Norwegian company’s local chief said.
Following a competitive tender, Telenor was named in June as one of the first two private firms, alongside Qatar’s Ooredoo, to be awarded a license to offer mobile phone services in Burma.
Years of a state domination of the telecommunications sector have meant the rates of access to mobile phones and the Internet in Burma are among the lowest in the world. Both companies are set to receive 15-year licenses and have pledged to rapidly expand the reach and affordability of telecommunications in Burma.
Telenor Myanmar chief executive officer-designate PetterFurberg said Telenor would be ready to launch SIM cards, to be priced at 1,500 kyat, or about US$1.50, about eight months after the Burmese government awards the company an operating license.
“We still don’t have a license in hand, but we expect it to happen within not too many months,” Furberg told The Irrawaddy in an interview in Rangoon on Wednesday.
“It should definitely happen this year, sometime in the fourth quarter. And then you can add eight months and we’re sometime in next year.”
Ooredoo has said it will start selling SIM cards next year, but it is also awaiting its license.
The government is still in the process of passing a new Telecommunications Law that will set out many of the details of the licenses. The law made it through Burma’s Parliament in August but has reportedly been sent back to lawmakers by President Thein Sein with recommended amendments.
Furberg said the delay was “nothing worrisome” for Telenor, but said the company is keen to see the final draft in order to know the precise terms under which it will be working.
“This is a natural process for any country where you have a law that is proposed from the government and then is being debated in the Parliament, and that might take a little bit of time. I think [that] is fair,” he said.
As soon as Telenor receives its license, Furberg said, the company will begin working toward its commitment of making both second- and third-generation phone and Internet services available to 80 percent of the country within five years.
“It’s a challenge. It’s not an easy country to operate in. It’s not an easy country to build infrastructure in, so we’re very humbled by the task,” he said.
“From the customers’ perspective, what they will get is both 2G and 3G coverage, more or less nationwide, and they will be able to use all the types of services that you can use in other parts of the world.”
Through its network, Telenor will also look to provide mobile information services for farmers, services aiding the delivery of health care over long distances and money transfer services that can be used by people without bank accounts, he said.
Only about 10 percent of an estimated 60 million people in Burma currently has a mobile phone, and just 1 percent has access to the Internet. At present, only the state-owned Myanmar Posts and Telecommunications (MPT) and Yatanarpon Teleport have telecommunications licenses. A highly controlled supply of SIM cards has fueled a black market where prices of more than $200 for a SIM are common.
Telenor plans to issue SIM cards at 70,000 places across Burma, largely through small “mom-and-pop stores,” said Furberg. Top up vouchers will be available at a total of 165,000 points of sale, he said.
Achieving Telenor’s ambitious coverage target will require a large number of new transmitters around the country. Furberg said he could not give details of the company’s plans or the size of its investment in Burma because the company, while majority owned by the Norwegian government, is also a publicly listed company and therefore must announce such things officially.
He did say, however, that Telenor was open to sharing with other parties the transmitter towers that will be used to create the mobile network. At a cost of about $100,000 to build a tower, he said, it made sense for operators to work together.
“Particularly here in Myanmar, you have to import all the steel and a lot of concrete, which means a total waste of money at a time when the country needs to spend all its investments on building as efficient as possible infrastructure,” he said.
“The government is encouraging tower sharing, and we as a company believe in tower sharing because it is good for the environment and it brings down costs.”
According to Reuters, Jeremy Sell, the chief strategy officer at the Qatari government-owned operator Ooredoo, told a conference in Dubai on Wednesday that Ooredoo and Telenor were actively discussing sharing transmitter towers.
“We might even outsource the entire build,” Sell was quoted as saying, adding that Ooredoo would probably also cooperate with the state-owned operators on transmitters.
Ooredoo did not immediately respond to requests for comment, but the company has previously said it would invest $15 billion in Burma over the course of its license.