At A Glance of Myanmar Current Situation (Part-III) – Digital Services in Myanmar Telecoms

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In 2013, Myanmar Granted Licenses to two additional MNOs with huge commitments attached to the licence in order to develop the social and economic welfare of the country and its people. Therefore together with their existing one, it has three MNOs since 2013. The launch of these networks transform the market with greatly improved coverage and a significant reduction in the cost of usage. This cost reduction lead to new untouched market of mobile access in Myanmar: Women. Yes, over 50% of the population in Myanmar are females, most of which are untouched by mobile access.

The strategy of leapfrogging traditional 2G mobile usage to 3G and 4G network has been an opportunity in a market like Myanmar where consumers see the value of a smart phone and mobile data over cheap feature phone, however, being said, growing mobile data penetration among low-income population is a challenge for mobile operators in developing countries.

Most challenges come with incredible opportunities for those who grab.With the digital economy still in its infancy, it is unclear which global advances in Digital Services and technologies will be adopted by Myanmar and which require local development. In this context, identifying how, where and with whom to work with in this market can be very challenging.

Even current operating telecoms, despite of their every efforts on CSR activities of donations and charity projects for the country, there is not much projects working out on digital services platform for social and economic welfare (such as agriculture, health, education, gender equality etc.,.) of Myanmar citizens, which in other developing countries, those kind of projects, were led by Telecoms. This is because Telecoms normally have huge commitment to help the country within as well as they are the major distribution channels of digital services to end users. Sadly, not much projects have seen in the country by current telecoms except the few projects by new telecoms.

Initiatives like Airtel Malawi mobile agriculture project, a dynamic and comprehensive mobile agriculture and financial service aimed at transforming smallholder farmers’ life by providing critical farming information that can enhance farming as business whilst promoting improved financial literacy and cash security awareness including Airtel Money (mobile banking) adoption which creates win win situation for both farmers and telecoms.

Even telecoms from developing countries still enhancing the mobile for development projects. One of the examples can be seen in Starhub Singapore’s Third Eye project which brings again win win situation by creating a community that would help blind people as well as brand value for the telecom which is far more effective than paying millions of dollars for billboard advertisements.

Third Eye Project by StarHub

Even the digital issues such as Cyber bulling, which definitely is a problem as well in Myanmar, were taken initiatives by telecoms in other countries if you see Words Hurt Stop Cyberbullying by Grameenphone. Comparing the video created as the products’ advertisement which by now people might already know what a telecom is providing, this type of video below can create a lot of PR value and improves the branding for the telecom. However, we still haven’t seen much like this in our telecoms in Myanmar.

Words Hurt Stop Cyber bullying by Grameenphone

Such events cannot be created unless there is a connection between the actual people doing projects like this who can show the telecoms what are the hot topics or problems in the society in order to transform them into digital version and distribute among people.

The Connected Digital Solutions Conference is the first ever industry wide event to bring together thoughtful leaders and key ecosystem players to collaborate on how to realise the potential social and economic benefits of different industries or communities through Digital Services platform for Myanmar Citizens. Again the participation and interests of Telecoms in such events are pretty low compared to government’s, NGO’s and community’s interests. The conference had over 40 government officials from 9 ministries, over 30 participants from local and international NGOs including proximity, action aid, UN, etc., over 30 interested youths from private schools and many individual interested candidates from Music, Film, E-Commerce, Tech, and business consultancy services. Altogether 200 attendees in two-day event. However, no participant registering from telecoms except one person from MPT which shows that these projects are still low priority in their list of prioritisation in Myanmar.

Connected Digital Solutions Myanmar

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At a Glance of Myanmar Current Situation (Part-II) for Infrastructures Business

As introduced in Part (I) from Nov 1st 2013, Myanmar has been going with its reformation since 2011. Currently, it has been in their progress of FESR (Framework for Economic and Social Reform) which outlines priorities up to 2015 which is a part of National Comprehensive Development Plan (NCDP), 20-year plan for reformation.

0112-Myanmar-Peace-Talks_full_600Myanmar is currently struggling with all three dimensional reformation: Political Reformation, Economic Reformation and Peace Building (ceasing fire, negotiation, and implementation of Peace with 16 major armed forces in the country), in which most of the other countries in the world has passed through their reformation process with only one or two dimensions, (MPC, Oct 2013).

As for economic reformation, selected sectors in five-year plans (FESR) has made its industry zoneannual plan and some of those are in actions during these years including new foreign exchange management law, new central bank law to improve operational autonomy of the Central Bank of Myanmar, opening up the telecommunication sector by choosing foreign investors through bidding, permitting 100% ownership for foreign companies with exceptions, and above of all, there is much better, more attractive tax incentives for investments in infrastructure development and the creation of special economic zones to attract foreign investment for the selected sectors. An Example of this incentive is the allowance of 5-year tax holiday.

There are significant necessities for development in Myanmar’s infrastructure sector which could be one of the divers for future job creation in Myanmar just like the other important sectors including manufacturing and tourism. Myanmar overall LPI ranking shows 133 out of 155 (see in table) with 134 in infrastructure (see in table) which is showing the opportunities for foreign investment as private sector in development of basis infrastructures such as urban transportation, airports, utilities, power plants, etc.,.

Myanmar’s agriculture sector has been a dominant sector in creating country’s GDP (0.8, agri$ thousand, 2010) which is taking about 44% of overall GDP. (McKinsey Institute, June 2013) This has led the country to opposite directions with the structure of GDP contribution of other Asia countries like Thailand (4.8, $ thousand, 2010) which has below 15 percent contribution from agriculture and shifting their contribution to infrastructures, manufacturing and services.(McKinsey Institute, June 2013)

Therefore there are six other sectors in national plan to create improvements which can potentially contribute the country’s economy. Infrastructure sector is one of these six with the estimation of 8% growth rate by 2030. According to McKinsey Institute, June 2013, this sector contributes $10.5 billion to GDP in 2010 which is estimated to be $ 48.8 billion in 2030 with the job opportunities of 2.3 million which is currently having the figure of 500,000 only.

Telecommunication infrastructure has made its movement in 2013 as Norway’s telecommunication company, TELENOR and Qatar’s telecom OOREDOO has become Myanmar’s first private telecommunication operators. teleApart from telecommunication, there are other important infrastructures to develop which include transportation infrastructures (roads, sea ports, railways, airports), utilities infrastructures (energy, power, water), industrial infrastructures and real estates. Among these real estates have greatest potential growth from $ 5.4 billion to $ 25.2 billion by 2030. (McKinsey Institute, June 2013)

According to the estimation of McKinsey Institute, June 2013, the urban floor space of large cities will take around 60% of the country in total and the real estate construction costs can be or may be similar to those in Vietnam.

Table: Logistics Performance Index by World Bank 2012

Logistics Performance Index, 2012, WB Myanmar
Overall LPI score 2.33
rank 133
Customs score 1.94
rank 146
Infrastructure score 1.92
rank 134
International shipments score 2.37
rank 131
Logistics competence score 2.01
rank 148
Tracking & tracing score 2.36
rank 129
Timeliness score 3.29
rank 82

At a Glance of Myanmar current situation for International Education Providers

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Myanmar, which is known as the Golden Land, had been under Military regime for many years. In March 2011, former SPDC Prime Minister, U Thein Sein became president. Since then the country has started their movement of reformation by meeting the major opposition leader, Daw Aung Sann Su Kyi. The international community has recognized the progress in the country by easing the sanctions on the country as most have seen as opportunity.

As for general economic condition, Myanmar was left behind the other Asian countries after many years of stagnation in economy. Myanmar which is strategically located at the heart of Asia, near the Asia’s biggest markets, India and China, compared to those of others Asian countries like Thailand, China, Indonesia, India, Vietnam, Philippines, it has the lowest per capital GDP.

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According to Economist Intelligence Unit; The Conference Board Total Economy Database; McKinsey Global Institute analysis, Myanmar’s per capita GDP in 2010 is said to be 0.8 ($ thousand) while the neighboring country, Thailand is said to be 4.8 ($ thousand). The major cause of this low GDP is labor productivity.  Myanmar is a country that has about the same population as Thailand but its lack of remarkable improvement in labor productivity has led to low GDP. According to McKinsey Global Institute (June 2013), a worker in Myanmar adds only $1,500 of economic value in year of work which is 70% less than other Asian countries.

Nowadays, 35% of the global population belong the consuming class of people with incomes of more than $10 a day who can spend money on discretionary goods and services as well as basic necessities. (McKinsey Institute, June 2013) This 35% in general is 2.5 billion people and 40% of this which is one billion lives in Asia, while only 4% of this one billion is Myanmar. (McKinsey Institute, June 2013)

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The current economical situation may be a bad news for international education providers of greater value services. However, Myanmar people’s willingness to gain international education standard has been growing since long ago. Parents are willing to invest in their children’s international education. They take education as investment and this seems to be a real risky investment for some Myanmar families because it can end up with debts for the other family members. Therefore, the children, themselves are very hard working and always look forwards to their further self-improvement. The families who take risk might think that something that doesn’t break them will make them grow stronger. Based on what I have known from talking to fellow Myanmar citizens, compared to Myanmar students who are studying abroad at Primary or Secondary levels of education, tertiary level students form a much larger percentage.

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Currently, President Thein Sein has introduced National Comprehensive Development Plan (NCDP), 20-year plan for reformation. However, in order to achieve this long term goal, the country in turn, has short term ones like FESR (Framework for Economic and Social Reform) which outlines priorities up to 2015. One of the goals of this includes achieving average GDP growth of 7.7%. So, this should be the good news for all the globalization companies including international education providers who have interest on Myanmar market.

According to the survey conducted by British Council Exams Services in March 2008, out of the 1,285 candidates who sat for the International English Language Testing System (IELTS) from April to December 2007, 37.2 per cent of them were Singapore bound while 33.2 per cent headed for Australia and New Zealand (British Council, 2008). “At the end of the upper secondary level (grade 11), students sit for the matriculation examination to enter the tertiary level” (British Council, 2008). The education system is based on the UK’s system the British colonized Myanmar for about one century.

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Today, most of the Myanmar students are studying business related subjects. Compared to those of the elder generation, many young generations of Myanmar choose to do business as their professional career in the hope that their country might develop as others. This is because of the developing state of Myanmar’s Economy seen with their eyes. In old times, most of the parents in Myanmar want their children to be doctors as the only choice to show that their children are hard-working.  From what I am aware, most of the students studied engineering related subjects in abroad. In recent years however, another field, Business related subjects, has been chosen as a preferred course. Parents start to accept the business related subjects as career-defining subjects in the hope that there will be much more opportunities in the country after reformation of open market economy.

Now, we have to keep an eye on what will really happen next.Image