Myanmar Phone Service Makes Leap

Qatar-based Ooredoo on Friday became the first foreign telecommunications company to offer services in Myanmar, setting up the country to be one of the world’s first predominantly mobile-Web nations.

Ooredoo’s rollout, more than a year after the company won one of two coveted licenses to operate in Myanmar, will be followed by service from Norway’s Telenor A next month. Both companies are charging 1,500 kyat—or about $1.50—for data-enabled SIM cards, dramatically reducing consumer costs. State-owned operator Myanmar Posts and Telecommunications sells slower, third-generation cards for as much as $250.

Prices of calls will be lower, too. Ooredoo will charge between 25 cents and 35 cents a minute for calls, compared with nearly 60 cents by the state-owned operator. Ooredoo data bundles will start around 50 cents a day.

The rollout promises to transform the Internet landscape in Myanmar, until recently one of the world’s most isolated countries. Its telecom sector was kept stunted for decades under military rule to enforce secrecy and hamper communications. Landline communications remain erratic at best.

As the country transformed to a nominally civilian government in 2011, the telecom sector was pegged as the one that most desperately needed investment and modernization. It is potentially the most lucrative, too; only North Korea has lower cellphone penetration. The awards of the two licenses through a widely praised open tender process was seen as a sign of the Myanmar government’s commitment to opening up the country to foreign investment.

Companies including South Korea’s Samsung have been advertising their smartphones heavily for years in anticipation of a boom in cellphone and Internet usage. Eight out of 10 phones sold in Myanmar now are smartphones and they likely will be the only way many people here will get online, according to consulting firm Deloitte.

Customers are eager to get connected. Snaking lines formed for days outside Ooredoo shops in Yangon and Mandalay. One customer likened owning an Ooredoo SIM card to “winning the lottery.” Facebook newsfeeds across Myanmar are filled with photos of excited residents taking selfies with their new smartphones. Ooredoo executives said some dealers in two days sold out their allocation of SIM cards, which were supposed to have been enough for a month.

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(via WSJ Blogs)