Ericsson to set up office in Myanmar telecom market

Telecom Lead Asia: Ericsson has decided to set up office
in Yangon, Myanmar in June.

The decision is significant as Myanmar, with an estimated
population of over 60 million, has only around one million people enjoy the
benefits of a mobile telephone. Around 400,000 people have internet access in

According to Nomura Securities, with around 60 million
people and only 4 percent wireless penetration and 3 percent fixed, Myanmar is
one of the last untapped telco markets in the Asia Pacific region.


Given the lack of interoperability between GSM/CDMA, the
number of unique users could be 2 million.


Currently, the state-owned operator, Myanmar Post and
Telecommunications (MPT), has a majority of these subscribers on 2G/3G.


Yatanarpon Teleport is the other smaller operator,
primarily an Internet service provider (ISP).


According to Nomura, a new telecom law, which could allow
for more licenses (up to 5) and direct or indirect foreign operator
participation, is currently in final stages of drafting.


The telecom sector in Myanmar is likely to be on the
radar for most telcos for incremental investment.


Unstable politics and bottlenecks, including: 1) high
handset prices ($45-600); 2) SIM registration cost of $150-200; 3) long waiting
periods (up to 2 years) and connection hurdles; 4) poor networks and coverage;
and 5) lack of competition have hampered growth.


The government is now targeting 50 percent wireless
penetration by 2015, implying a 50 percent CAGR.


For this to happen, competition (lower prices), significant
infrastructure investment (only around 400 BTSs now), and clearer policies
(around interconnect etc) are required.


There is no foreign operator in Myanmar. A few Thai and
Chinese companies such as Huawei and ZTE provide telecom/ satellite equipment.
The size of Myanmar’s population is close to Thailand’s, where the combined
market cap of the top-3 operators is $23 billion.


With a mobile penetration below two
percent, Myanmar most likely has the least developed
telecommunications services in the world,” says Ericsson Vice President for
Corporate Responsibility and Sustainability, Elaine Weidman Grunewald.

“Telecommunications is on top of the agenda
in Myanmar in order attract the much needed foreign
investment. Myanmar needs foreign investment and trade in order to
continue the positive progress in its socio-economic development,”
Grunewald added.

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