Quarterly Business Magazine

Information and Communication Technology (ICT)

Bridging the Digital Divide, Enhancing Communications Capacity
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The Myanmar ICT sector has seen increased interest from investors as ongoing telecoms reforms promise increased competition in the market and access to 60 million customers, most of whom have little or no access to communication services. While many are looking at telecoms operation and infrastructure, there is more than this to the local market. Reasonable-cost talent, increasing government support, and organized industry and improved connectivity all make the Myanmar ICT sector an enticing opportunity.
 

Sector Overview

Though previously controlled by draconian legislation, the Myanmar ICT sector began an overhaul in the early 2000's, through the enactment of the Computer Science Development Law (1996), and the following instatement of the Myanmar Computer Development Council. The council's objective was to lay down policies and regulations that will help disseminate the use of computer science and technology, and utilize it for the State's development.  This favorable attitude towards ICT has continued to be a part of government policy both in words and in practice.

The Myanmar ICT market is still largely dominated by hardware companies (see below), due to the relatively low usage of ICT in business and industry.

Telecoms

The telecoms industry is one of the fastest growing and lucrative globally. Myanmar’s telecoms sector has unique characteristics for investment opportunities as it demands products and services for a large market that is virtually unprovided-for.

Currently, there is only one telecoms operator in Myanmar - Myanma Posts and Telecommunications (MPT) – which is wholly owned by the Ministry of Communications, Posts & Telegraphs. MPT is planning to revamp the sector by issuing licenses for a total of four mobile network operators during 2013. The four will include MPT’s Myanmar Public Telecom and Yatanarpon Teleport (YTP) – in which MPT holds a majority share – in addition to the two new foreign operators, which will be chosen through a tender process, based on their performance rather than investment power.  Both local and foreign companies have applied for the tenders and MPT is now in the process of reviewing first-stage applications, which consist of a letter of interest. In the near future, MPT plans to privatize its telecom operations, and consequently YTP, so that eventually there will be at least four private players competing in the market with 15 year license. 

In addition, MPT is in the process of drafting a new telecommunications law, which will help create an investment-friendly environment, and ensure a competitive market.  This law is intended to replace past restrictive legislation, and allow for a proliferation of service providers. However, it remains to be seen what exactly the law delivers, and to which extent it serves to dismantle the monopoly of MPT.

Internet Service Providers (ISPs)

Currently there are two ISPs operating in Myanmar - MPT and YTP, and a cluster of smaller, sub-ISPs, such as Redlink, Digicel and SkyNet, which help deliver internet services to private customers. National backbone consists of approximately 10,000 km of fiber optics linking major cities and towns, with rural areas receiving little to no connectivity. Cross-border fiber links connect Myanmar to China, India, Thailand and Vietnam, with the main international link being the Sea-Me-We-3 Cyber Link through Singapore. 

It is largely expected that, following the issuance of the new mobile operator licenses, MPT will allow for class licensing for ISPs, which will guarantee a license to any provider which matches the preset criteria.

Software

The software market in Myanmar is still largely underdeveloped, with relatively few companies operating in this space. At the moment, the finance sector seems to be an early adopter of technology, with banks installing increasingly secure and progressive systems. Within the trading and tourism sectors, IT usage is limited to the larger players – such as major airlines and foreign-owned hotels which offer online booking systems, and big supermarket chains using inventory management solutions. However, most of the largest sectors in the country- such as agriculture, manufacturing, education, and health- employ very little software solutions if at all. Nevertheless, the demand for sophisticated applications is expected to spike as the country's various industries grow and require more developed solutions, be it custom-made applications or licensed comprehensive systems.

Additional opportunities exist for setting up offshore development or outsourcing projects. Myanmar can offer skilled human resources – in the IDI sub-skills index of 2011 Myanmar scored 5.24, significantly higher than India (4.63), Cambodia (4.38) and Laos (4.35) – for a fraction of the cost. New investor-friendly regulations and tax incentives make it even more attractive to invest in such ventures. 
 

e-Government

Though in the past Myanmar has been consistently ranked as one of the least developed countries in the field of e-government, the new administration is keen to adopt technology as a tool for not only increased efficiency, but also "good government and clean governance"- as president U Thein Sein has put it. The government has been working closely with the Korean International Cooperation Agency (KOICA) to develop the use of e-government platforms and incorporate ICT into policy-making and legislation, mainly through the development of National ICT Master Plan, starting since 2000. While implementation of said plans had been behind schedule and the adoption of technology in practice requires necessary trainings and facilities, the Myanmar government is gradually implementing more and more e-government projects, both within ministries, and in the interface with other agencies and citizens. 

ICT Education

The Ministry of Science and Technology operates 25 Computer Universities and Colleges throughout the country. Additionally, many private institutions teach various IT courses, starting from basic computer literacy, to advanced programming skills. Though these private schools vary in quality of programs and delivery, and it is often difficult to ascertain their credentials, many of them do teach certified courses. The private education sector in Myanmar is seeing a surge of business, and there is also growth in the number of ICT education institutions Currently, one of the biggest challenges for the local ICT industry is to prevent "brain-drain" of skilled and experienced professionals to more developed countries. 

Mobile Banking

Myanmar is an ideal market for mobile banking technologies, as currency rates and denominations, combined with current banking policy, necessitate the cumbersome usage of large quantities of cash. Mobile banking would be useful for paying salaries and bills, as well as Government to Business (G2B), People to Business (P2B) and Business to Business (B2B) transactions. This sector is likely to provide good investment opportunities following the overhaul of the telecoms market, when mobile phones are expected to become highly ubiquitous, however, clear regulations on the subject have not yet been issued by MPT or the Ministry of Finance. 

 

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