Myanmar braces for mobile phone boom as Internet access trickles in

Myanmar's government wants to increase the nation's mobile penetration to at least 75 percent by 2016

The Shwedagon pagoda in Yangon, Myanmar

The Shwedagon pagoda in Yangon, Myanmar

In Yangon, Myanmar, giant Samsung billboards hang overhead as dozens of handset shops line the crowded city streets and advertise the latest smartphones. Just a few years ago, you wouldn't have seen such a sight, said Soe Nyi Nyi, a local tech entrepreneur.

"There's been a lot of changes," he said. "There's a lot of mobile phone shops now."

Only a year ago, buying a SIM card in Myanmar could cost around US$250. Go back further, and the price was as high as $2000 or more, with control of the telecommunications network strictly regulated by the nation's then military government. The high prices put handsets out of the reach of many, and even now only about 5 percent of the population use mobile phones, according to industry experts.

But all that is starting to change as Myanmar transitions to democracy. For the first time, mobile phones are becoming affordable under reforms brought on by the new government. Handsets could soon end up flooding the market, bringing the Internet to millions, and potentially raising the quality of life in one of Asia's poorest countries.

Ask people in Yangon, a city of 6 million, and many will say with optimism that the country is on the right track since Myanmar's nominal civilian government took power in 2011. Online censorship has largely ended, political prisoners have been freed, and foreign governments, including the U.S., have lifted or eased sanctions against the nation.

"Yes, it's better, we have free speech," said Chan Mya, a taxi cab driver. "In the former times it was impossible. There are many newspapers now."

But in terms of technology, Myanmar is one of the least connected places in the world. The country's Internet penetration is at around 1 percent, and few know how to use PCs. Simple things such as electricity can be hard to come by, and people generally live off low incomes of between $80 and $150 a month.

It hasn't helped that Myanmar, also known as Burma, once took a hostile stance against the Internet, and tried to stamp out online dissent. Some like local blogger Nay Phone Latt have been jailed for spreading news on anti-government protests. In 2008, he was sentenced to prison, only to be released four years later as part of a mass presidential pardon.

Since then, Nay Phone Latt has started an NGO, called the Myanmar ICT for Development Organization, that helps train people in different towns to use the Internet. Most of the people instructed are in their 20s, and want to look for jobs, he said. "They want to read the news, and share the local news," he added. "The young people look for educational opportunities, scholarships."

But the group can only venture out so far. Out in Myanmar's rural areas, electricity can be scarce, along with PCs. "In some places we cannot teach the Internet, because there is no Internet," Nay Phone Latt said. "People are not familiar with computers."

In urban areas like downtown Yangon, Internet access is available at local Internet cafes that charge about $0.32 an hour. At the Lifenet cafe, access speeds reach only 0.30 Mbps, but it is enough for 27-year-old Sai Woon Tip to visit Facebook, perhaps Myanmar's most popular website. On the site, users can easily share news with one another, especially articles on controversial topics, he said.

Big changes, however, are in store for Myanmar's tech landscape. Over the next three years, the country's government wants to raise mobile penetration to between 75 and 80 percent. To do so, Myanmar is opening up the nation's telecommunications industry, and is seeking bids from foreign telecom groups to improve the nation's mobile network. On June 27, the government will announce the two successful bidders.

"When the licenses are issued, it's expected the two operators will hit the ground running," said Thaung Su Nyein, the managing director of local IT and media company Information Matrix. "They'll just sell the hell out of the whole market."

Already, Myanmar has released a limited number of SIM cards for the low price of $1.50. But soon cheap phone plans will become available to millions, along with faster connection speeds, including the potential for 4G services, according to local industry watchers. In the meantime, major handset vendors are gearing for the future demand.

Last November, Samsung Electronics entered the Myanmar market, and in May, the company held an event to launch its Galaxy S4 smartphone in the country. Taiwan's HTC has also opened up shop, and like others, localized its handsets with the Burmese language.

"Myanmar people like HTC, iPhone, Samsung," said Htoo Htet, a saleswoman at a Yangon handset store. But low-priced phones from Chinese handset maker Huawei are the most popular, she said. An average Huawei handset can cost $125 as opposed to the Samsung Galaxy S4, which can go for $660.

Companies including Google have made visits to Myanmar and lauded the changes in the country. But bringing the Internet to the country's populace will take more than just phones. Two major bottlenecks are the country's sub-standard infrastructure and its low education levels, said Tun Thura Thet, CEO of local software firm Myanmar Information Technology.

"We do not have enough computers in the schools. The teaching methods, the teaching aids, the facilities, everything has to be revised," he said. "I think it is important we have high-income employment."

Others like local resident 49-year-old Kaung San hope to see changes in their lives soon. Things are getting better, he said, but still very slowly.

"Low salary is the main problem," he added."The Samsung Galaxy S4 is $600. I cannot buy. It's for rich people."

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