Telecoms Winners Announce Plans for Reduced Call Rates in Burma

By Kyaw Phyo Tha 15 July 2013

RANGOON — For the first time since the government announced the international winners of a telecommunications license tender late last month, the two successful bidders have disclosed their planned calling rates, according to a press release by Burma’s Ministry of Communications and Information Technology.

The joint statement by Norway’s Telenor and Qatar’s Ooredoo said both international telecoms giants will offer highly competitive rates that are significantly lower than what is available in the market today.

The Norwegian company said its airtime fee for prepaid voice services during peak hours would not be higher than 25 kyats per minute (about 3 US cents), a 50 percent drop from the current rate charged by state-run Myanmar Posts and Telecommunications (MPT), the country’s sole provider of telecommunications services.

Ooredoo said it had committed to voice rates during peak hours of up to 45 kyats (4.5 cents) per minute for calls to another operator and up to 35 kyats for calls between Ooredoo subscribers.

Both telecoms companies stated that they would offer SIM cards not exceeding 1,500 kyats in price, while the Qatari telecom firm said it would include “an offer with a SIM card for free.”

A significant drop in the cost of SIM cards could dramatically improve mobile coverage in the Southeast Asian country, where only about 9 percent of its 60 million people have mobile phones. Neighboring countries like Thailand have upwards of 125 percent penetration, said Aung Thura of Thura Swiss, a research and consultancy firm in Rangoon.

“If it happens, our country’s mobile penetration will surely rise,” the CEO said.

He added that nearly everyone may soon have a chance to own a cellphone, but that did not mean mobile phone usage would skyrocket nationwide, due to airtime fees that he sees as still too expensive for many.

“They will have cell phones but use it only for emergency,” he said. “But the upside is a competition between those providers that inevitably gives customers choices for service reliability.”

Until last year, SIM cards sold by the government went for about 200,000 kyats ($205), an amount nearly 50 percent higher than the average monthly salary for a government high school teacher.

But this year the Myanmar Economic Corporation began selling 350,000 individual SIM cards at 1,500 kyats each via a public lottery, and plans to offer additional batches on a monthly basis. The move is part of President Thein Sein’s ambitious goal to achieve 80 percent mobile penetration by 2015. However, the limited current supply has seen SIM cards sell for up to 70,000 kyats on the black market.

Last month, the Burmese government announced that Telenor and Ooredoo were selected from a shortlist of 11 bidders, whittled down from more than 90 companies and consortia that had expressed interest in working in the country’s telecoms sector on a 15-year license.

One day after the awarding of the tender, the deputy minister of communications, posts and telegraphs said during a Lower House session of Parliament on June 28 that MPT would slash the fees it charged to make and receive mobile calls to between 25 kyats and 15 kyats to “benefit the Burmese people.”

No timetable was offered for when MPT would carry out the rate reduction plan.