Burma Seeks Partners to Free up Telecoms Sector

By Reform, The Associated Press 17 January 2013

RANGOON — Burma’s government has taken a fresh step toward liberalizing its state-dominated telecommunications sector by publishing a notice on Wednesday inviting investment proposals from local and foreign companies for nationwide telecommunications services, including telephone and Internet connectivity.

State television also announced on Wednesday that the minister for communications, posts and telegraphs, Thein Tun, had resigned, but it was unclear whether it was related to the liberalization policy. It also announced that the religious affairs minister had departed, also with no reason reported.

The state-run New Light of Myanmar newspaper said two companies will be awarded telecommunications licenses, and expressions of interest should be submitted no later than Jan. 25.

The elected government of President Thein Sein has introduced a raft of political and economic reforms to jumpstart the country’s development after almost five decades of repressive military rule that left Burma one of the poorest nations in Asia.

Telecommunications can be an extremely lucrative sector, and several foreign companies have established offices in Burma since Thein Sein began to overhaul the economy, as sanctions applied by Western governments against the previous military regime have been eased.

“Two companies that can fulfill the criteria to provide nationwide telecommunication service will be given licenses by June this year,” Soe Naing, assistant director of the Post and Telecommunications Department, told The Associated Press.

Soe Naing said there also are plans to transform the state Myanmar Posts and Telecommunications Department into an independent entity to be called Myanmar Telecoms.

The notice inviting investment proposals said one of the principal goals of opening up the tender is to increase the country’s telephone penetration to 75-80 percent by 2015-2016 and “make the telecommunications services available to the public at affordable prices and to give the public a choice of telecommunications services.”

Soe Naing said the current level of telephone penetration for Burma’s 55 million population is about 10 percent. Installation of a landline costs about $765 and a cellphone costs about $235.

Neighboring Thailand began breaking up its state monopoly on phone services more than two decades ago, though its much stronger middle class made the market more attractive to investors than the underdeveloped economy in Burma. However, state-affiliated Thai enterprises have retained some of their privileges, complicating the achievement of a truly free telecoms market.

Telecoms Minister Thein Tun joined Thein Sein’s original cabinet in April 2011, while Religious Affairs Minister Thura Myint Maung was reappointed after serving under the previous military regime.

There have been several cabinet reshuffles since Thein Sein assumed power in March 2011, with the last one in September last year seeing the appointment of 10 new ministers, including defense, finance and national planning. While the reasons for the changes are rarely explained, at least some are widely believed to involve Thein Sein bringing in colleagues he feels closer to, to consolidate his power.