Interview: Liman Zhang
What reforms are needed to support the development of the ICT industry in Myanmar?
LIMAN ZHANG: Despite the significant progress of the past few years, Myanmar is still considered a starter country in terms of its digitalisation. Different stages of development call for a different set of reforms, and should focus on adopting reforms in three key areas: infrastructure, digitalisation of government and public services, and improving basic digital literacy.
Regarding infrastructure, encouraging the ICT sector to be more involved in infrastructure sharing through the development of clear policy regulating the common use of public utilities, infrastructure and private properties would be beneficial. Additionally, if governments at the municipal level promoted collaboration between ICT companies and construction companies it would help ensure that new buildings allow for the installation of telecoms transmission lines, including fibre-optic connections. More broadly, Myanmar’s undeveloped infrastructure poses challenges to the development of the ICT sector. Insufficient electricity network coverage and poor transport links are two of the most pressing issues for Myanmar’s ICT sector.
In terms of the digitalisation of some governmental bureaucratic services, priority should be given to the development of digital products such as electronic identity cards and e-passports. The digitalisation of these services would enhance the efficiency of population management, and allow technology to be transferred to other areas of governance. Other areas that could benefit from digitalisation are education – through e-learning programmes that reduce educational inequality – and tourism, as electronic bookings and management eases travel for tourists.
Lastly, the government could develop strategies to improve basic digital literacy in both schools and universities, as well as within the job market. Increasing ICT exposure through educational device subsidies or subsidised entry-level computing programmes are other interesting mechanisms to support the development of the sector in Myanmar.
Which services and products will drive consumption patterns and growth in telecoms and ICT?
ZHANG: The Myanmar handset market registered tremendous growth between 2013 and 2015. During that period 80% of all handsets sold were smartphones, and the mobile penetration rate reached 90%. In 2016 the market for smartphones began to slow down. Nevertheless, we estimate smartphone sales will reach 4.4m in 2017 and 4.7m in 2018. Differing from previous years, today’s market is likely to be driven by consumers who are looking to update their old mobile device for a new one. Competition among tech companies such as Huawei, Vivo, Samsung and Oppo is becoming stronger, particularly at a moment when operators are introducing their latest flagship handsets onto the market.
In terms of services, LTE networks will lead telecoms sector growth, while 4G will provide larger data bandwidth and improved high-speed internet services. In the 4G era, video services will be one of the critical engines fuelling market growth, just like voice services did during the 2G era. Mobile video is just starting to develop in Myanmar, and over-the-top offerings are still relatively small. While this can be seen as a challenge for operators, it is also an opportunity for them to tap into a new, undeveloped market. Data, instead of voice services, will therefore gradually become the main revenue source for operators.
Looking forward, we expect traffic to increase 20-fold by the year 2020, with mobile broadband users set to be one of the main drivers of this growth. In Myanmar there are 27.4m mobile subscribers, of which 80% are 3G or 4G users. With the increased prevalence of 4G services we can also expect wireless home broadband to become a more significant source of revenue for ICT companies, particularly given that market penetration for this service is currently just 0.5%.
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