Business

State-Owned Telecom Slashes Landline Fees as Users Go Mobile

By Kyaw Hsu Mon 15 July 2015

RANGOON — Burma’s state-owned Myanmar Posts and Telecommunications (MPT) on Wednesday halved the price of landline phone installation after years of wringing the country’s monopolized communications market.

The fixed phone rate has been pinned at a staggering 650,000 kyat (US$565) rate for more than a decade. Twenty years ago, the rate was as high as three million kyats on the flourishing informal market. The new official rate, applied today, brings initial fees down to 325,000 kyats.

MPT said in a statement that it aims to target retailers and other businesses, many of which will need fixed line service for ADSL Internet connections.

“By reducing rates, more people and businesses will consider installing land lines and we’re happy to increase access for our customers,” the statement read.

Prior to political and economic reforms initiated in 2011, fixed line users greatly outnumbered mobile subscribers because of a lack of technological development, infrastructure and sanctions preventing foreign providers from entering the market.

Under the former military government, SIM card prices reached heights of five million kyats on the black market, but the recent entry of two private foreign competitors—Qatar’s Ooredoo and Norwegian Telenor—has steadily brought the prices down to a much more practical 1,500 kyat, just over a dollar.

Mobile use is growing fast among Burma’s consumers, and technological leapfrogging has left landline phone services in disrepair and nearly obsolete for personal use. Old and poorly maintained infrastructure has caused connectivity problems that have frustrated users for years.

“[MPT] has disappointed its consumers, so they don’t have loyal customers, I guess,” said Hnin Pwint Phyu, the managing director of a tourism company. Landline service would be useful for her business, she said, but she remains skeptical about MPT’s ability to provide modern and reliable service.

“Sometimes I even think they duplicate my line and use it for other customers,” she added, “I’ve always got a bad connection.”

Others said the move was seemed like a desperate attempt to survive as consumers go mobile, many to MPT’s foreign rivals. Khin Khin Oo, a mobile user from Rangoon’s North Dagon Township, said she no longer has any use for a landline, and enjoys having options among mobile plans.

“So far, there are so many options to choose from for mobile SIMs, that’s why it’s been a long time since we’ve used the fixed line,” she said.

MPT, which operates under Burma’s Ministry of Communication, Information and Technology, last year partnered with Japanese KDDI and Sumitomo corporations to implement a communications upgrade. The two firms have pledged a combined $2 billion for the project.

Since that time, MPT has offered SIM cards at a drastically reduced rate and has developed more advanced Internet usage plans. According to KDDI, the company now has about 13 million active subscribers.

Data from the country’s 2014 census indicates that as of March last year, about 4.8 percent of households currently had a landline, whereas 32.9 percent had mobile phones. Only about 6.2 percent of households had Internet access, making Burma one of the least connected countries in the world.

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