Two New Mobile Operators Authorized in Myanmar, Illustrates Asia Pacific Mobile Growth

Telenor and Ooredo (Qatar Telecom) each have won new mobile licenses in Myanmar, competing against existing providers Myanmar Posts and Telecommunications (MPT) and Yatanarpon Teleport Co.

The awards double the number of mobile service providers in Myanmar and are part of a government plan to dramatically boost mobile phone penetration from the current level of nine percent up to levels more typical of other South Asia nations.

In some ways, the Myanmar move is part of a broader trend, namely the emergence of the Asia Pacific region as the biggest communications market on the planet, measured in terms of subscribers, with the fastest growth rates.

Since the mid-2000s, it has been clear that the Asia-Pacific region will feature the greatest single concentration of communications customers and revenue mass of any region in the world, over the coming years.

So any supplier with ambitions to grow globally has to succeed in the Asia-Pacific region. That is a bit of a change from where growth drivers have been seen for much of the past decade.

Asia already by the mid-2000s was home to almost half the world’s fixed telephone subscribers. It had 42 percent of the world’s Internet users, and with 1.4 billion mobile cellular subscribers, it also had the largest mobile phone market share, according to the International Telecommunications Union.

By mid-2008, China and India alone had over 600 and 280 million mobile cellular subscribers, respectively, representing close to a quarter of the world’s total.

The Asia-Pacific region was the world’s largest broadband market with a 39 percent share of the world’s total at the end of 2007.

Telecoms retail revenue in the emerging Asia–Pacific (APAC) region was predicted to grow at a compound annual growth rate (CAGR) of seven percent between 2011 and 2016, according to Analysys Mason.

Both new service providers must build networks providing a minimum of 75 percent geographic coverage for each region and state, for voice services, five years after the effective licence date.

France Telecom (Orange) and Marubeni Corporation, bidding together, was selected as the alternate licensee, should Telenor or Ooredo not meet the requirements.

The license awards came as Myanmar’s Parliament unanimously voted to delay the process, in view of a proposed bill to revise the country’s telecommunications law, including a provision requiring all applicants to have local partners.

The new telecom bill would require all foreign companies bidding or operating in Myanmar to have a local partner.

Apparently, none of the winning bidders, or the The Orange-Marubeni consortium, have local partners.

Myo Swe, the member of parliament who proposed the vote, said the "industry risked being monopolized" if the winners were announced before a telecommunications law was in place.

Myanmar, with 60 million people, has mobile penetration of less than nine percent.

The 15-year wireless licenses take effect in September 2013 and would represent the largest foreign investment in Myanmar since a semi-elected government took power in 2011, ending decades of military rule.

In a way reminiscent of the 1980s cable franchising wars in the United States, applicants were campaigning for themselves across Myanmar, especially in the commercial capital of Yangon, the Wall Street Journal reports.

SingTel ads appeared on phone booths in Yangon while billboard ads appeared elsewhere.

Digicel was confident enough to have already begun hiring local staff in country.