To Stay Competitive, Burma’s State Telecoms Firm Looks to Japan

By San Yamin Aung 17 July 2014

Burma’s state-backed telecoms operator is partnering with two Japanese companies in a bid to stay afloat in a market that will soon see new competition.

Japan’s KDDI Corporation and Sumitomo Corporation signed a deal on Wednesday to invest US$2 billion over the next decade to expand the services of Myanma Posts and Telecommunications (MPT).

The deal comes as Norway’s Telenor and Qatar’s Ooredoo prepare to launch their own operations in Burma, after winning hotly contested licenses last year. MPT is currently the sole telecoms provider in the country, after monopolizing the market during decades of military rule.

But as the telecoms sector opens, MPT is facing complaints over its poor mobile phone services and slow Internet connections. It will also face pressure in a few months to make SIM cards more readily available, as Telenor and Ooredoo plan to do.

KDDI is one of the largest telecom companies in Japan. Trading house Sumitomo has interests in railway infrastructure, telecoms, broadcasting and power generation, and is assisting with the development of the Thilawa Special Economic Zone near Rangoon.

“We will operate jointly to provide better services, including better Internet connections. And I have full confidence that we can compete with international firms,” MPT general manager Khin Maung Tun told reporters in Naypyidaw.

Through the partnership, MPT aims to provide Japanese quality services and fixed line communication services through the upgrade of telecoms infrastructure. It also plans to focus on customer services at call centers and shops to improve customer satisfaction.

“We will support MPT to compete with the new telecoms operators and become a winning organization,” said Takashi Nagashima, managing director of KDDI Summit Global Myanmar (KSGM), which was established by KDDI and Sumitomo as a joint venture to implement the joint operation with MPT.

He said that in addition to fixing the existing network and launching customer-oriented services, the joint operations would make it easier to buy SIM cards, especially in rural areas.

Since last year, MPT has sold SIM cards for 1,500 kyats each (US$1.50) through monthly public lotteries. The supply of SIM cards is limited, however. Anyone who has not won at the lotteries must buy more expensive SIM cards on the black market, often at a price of about 70,000 kyats.

President Thein Sein aims to achieve an 80 percent mobile penetration rate by 2015, an ambitious goal in one of the world’s least-connected countries.

“MPT will be reborn to provide the best services to all the people in Myanmar [Burma],” said Khin Maung Tun of MPT. “We will implement all services quickly and make sure to sell SIM cards that people can buy everywhere and anytime they want.”