Norway’s Telenor was one of two international companies named in June as winners of an open tender to operate mobile phones in Burma. It is hoped an injection of competition and international expertise will rectify the country’s position at the bottom of most rankings for mobile phone and Internet access.
The company has promised to have SIM cards available to the public for just 1,500 kyat, about US$1.50, eight months after it receives a license to operate. Telenor Myanmar’s Chief Executive Officer-Designate Petter Furburg spoke to The Irrawaddy’s Simon Lewis this week to discuss the challenges and opportunities of bringing telecommunications to the people of Burma.
Question: Telenor has promised to provide mobile phone coverage to 80 percent of the country within five years. How difficult will this be?
Answer: 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. We know it’s not going to be easy. And it’s also important that people have realistic expectations to the fact that it does take time to build infrastructure like this.
Q: There are still some parts of Burma where government forces are fighting armed rebel groups and many parts of Burma are very remote. Are there places where it may not be possible for Telenor to reach in the first five years?
A: We are extremely aware of all the challenges we are going to meet in Myanmar. The normal type of challenges in many ways are bigger here just by lack of infrastructure. So roads are poor and not available. You have [a lack of] electricity availability. All of these things you also find in other markets are here. And then, of course, you also have the other dimension here which is the potential difficulties in certain areas due to conflict, due to land mines.
We are aware of the challenges. Have we found solutions to all of them? No. Do we think it will be possible to find solutions? I hope so, because this is about giving access to something which is good. Whether you are living in Yangon or in the north of Kachin. To get access to mobile services I think is almost like a human right.
At Telenor, if you look at how we are operating in the five markets we now have in Asia—in Pakistan , India, Bangladesh, Thailand and Malaysia—our philosophy has always been about going mass. It’s about giving everyone the right to these services. So when we talk about Myanmar, a lot of our bid was related to this—making it affordable and making it available. So building the network is challenge number one. Getting the distribution to reach everyone is challenge number two. And then of course, bringing the prices to such a level that they actually can afford. Because you can be fooled by walking around the streets of Yangon—the affordability level in this country outside the cities is totally different.
Q: How will you distribute SIM cards?
A: There won’t be limited supply…. Making it available, that’s important. It’s not just about building the network, you have reach people where they are living. So they shouldn’t have to commute to buy a SIM card. SIM cards will be available at 70,000 points of sale. And those points of sale, they are not mobile phone shops, these are the mom-and-pop stores that might have a tiny section of the shop where they sell SIM cards, and maybe they can afford stock up three phones. They can start selling phones too.
This is about creating a business where it’s not like we are going to do everything. Our philosophy is that what we are good at is to do the big heavy lifting. All the others will start to create business around us.
When you change from having 7 million people in a country going to buy a refill to, say, 50 million people, there’s business for a lot of mom-and-pop stores across the country.
Q: What services beyond phone and Internet are you going to offer?
A: It’s early, but we have in our bid said we are interested in developing services. What we’ve also done in other markets is farmers’ information services, which is about giving access to market price, giving access to markets etc.
With health, you don’t even have to leave Yangon to see that health services is a huge area [needing] improvement. It’s an enormous distance from Yangon—and the most advanced health services of course—to the remote areas. So to be able to use telecommunications to give people in the most remote areas access to information and also potentially [medical] consultations is going to be quite important. And that’s probably only through our type of services that you can do that.
And then financial services: At Telenor we have tested different models for financial services. The most advanced one we have is in Pakistan. It’s called Easypaisa.
Mobile financial services is actually not about the phone, in my view. It is about the fact that we have the distribution. So we have access to, for mobile top-up, 165,000 points of sale. Not all of them would qualify for handling financial services, but what they are used to is to take cash in. And to take cash in, that agent has actually already paid us. To be able to sell you top up of 1,000 kyat he had already paid us 1,000 kyat. So he has on his account points that he can sell to you. So you come to him and you get that money.
It’s a very closed system that allows money transfer because of the agent network. Not because of the mobile phone itself. So I think our strength relies in the fact that mobile distribution will reach the most remote villages and that power gives us the opportunity to also handle money transfer. This is not really big business for the mobile operators, the main reason we do it I think is because it’s an added benefit and it ties the customer closer to us.
Q: Have you had any discussion with government about the upcoming Telecommunications Law and its contents?
A: We’ve had the dialogue in terms of the process following, in terms of getting things sorted out for our license, but not, in any way, related to the telecom law as such. We don’t know what’s in the telecom law and we are just simply waiting.
Q: Foreign companies have been warned that there’s a risk of corruption when dealing with the Burma government and local companies. What measures are you taking to deal with these risks?
A: When it comes to corruption, our philosophy is very simple and we’re operating in many markets in the world, so this is a challenge that we are faced with in all our markets, and our philosophy is simple: We have zero tolerance for corruption and we just have to work on that basis.
Q: Human Rights Watch has warned foreign telecoms companies working in Burma about the risks of being involved in country with a reputation for government rights abuses, including surveillance and censorship. Is this something you’re concerned about?
A: It’s right that we have received a letter from Human Rights Watch to Telenor some months back where they pointed to this issue, and it’s been answered and we’ll be able to answer more when the law comes out.
Right now, we don’t know what the law actually says, particularly regarding legal intercept [the authorities requesting access to communications data]. I think we have to wait until the law is out to comment on that. But Myanmar is not the only country in the world where there is a regulation which allows for legal intercept and there will be international practices in this, and we are also following our internal procedures with regards to how this access can be given. Of course in general we have to follow the law and therefore we have to wait until the law is out to get clarity on how this will be practiced.
