Regulatory Environment

In March 2012, the director-general of Myanmar's Post and Telecommunications Department, a division of the Ministry of Communications, Posts and Telegraphs, said that a new communications law is being studied for the creation of four telecoms licences, which will be available to local and foreign investors. Myanmar's government is undertaking a phased approach to achieve its stated targets for the telecoms sector. It has already laid down the policy framework for the development of the telecoms sector by facilitating competition of both local and international operators in the market . A new Telecommunications Law has been prepared to enable the g overnment to liberalise the telecoms industry . The law has been submitted to the p arliament for review and approval , and is expected to be promulgated by H1 13. The g overnment has already commenced the corporatisation of the telecoms activities currently operated by Myanmar Post and Telecommunication under the Ministry of Communications and Information Technology (MCIT) .

During this process, the Posts and Telecommunications Department will be responsible for providing policy advice to the MCIT and carrying out regulatory functions in the sector. The Regulatory Authority is envisaged to be transformed into an independent entity by 2015, according to the draft Telecom Law.

The Burmese government has set a target of 75-80% telecoms penetration (comprising mobile and fixed-line) by 2015-2016. Officials aim to introduce Research In Motion's BlackBerry services as early as 2014, in time for a regional meeting of the Association of Southeast Asian Nations.

Foreign Investment Law

On November 2 2012, Myanmar finally passed its much-anticipated Foreign Investment Law (FIL), paving the way for investment into the former pariah state to begin in earnest. The bill had previously been passed by both houses of parliament in September, only to be sent back with suggested revisions by President Thein Sein. However, after indicating that the sidelined bill would soon be finalised in late October, the President signed off on the updated version of the bill, stating that it would provide both protection and incentives for foreign investors to enter the frontier economy.

The bill's p assage represents a key milestone for the still fledgling government in its unprecedented bid to open the economy up to global investors. While myriad foreign firms have been lining up to enter the promising Myanmar market (the boldest of which have already begun to establish a presence in Yangon and elsewhere), most have been awaiting a more robust investment framework than the previou s version established in 1988.

Bright spots in the new law include the removal of set foreign ownership restrictions in so-called 'restricted' sectors as well as an unrealistic investment minimum of US$5mn, key points of concern in previous drafts that Thein Sein had indicated could be perceived as too protectionist. The new law also provides clarity on the leasing of land owned by qualified private owners, a subject that was not explicitly detailed in the 1988 law. Under the auspices of the new FIL, leases of up to 50 years are now possible (up from 30 years previously), with two 10 - year extensions also available.

While the FIL is undoubtedly a welcome step forward, plenty of room for interpretation remains. Investment approval will be the domain of the Myanmar Investment Commission (MIC), a relatively opaque committee of 16 government appointed individuals. Although foreign ownership caps as well as investment minimums are now to be decided between business partners, final consent remains with the MIC, effectively placing the power to approve or deny new investments with the government.

Two Telecommunications Service Licences By H113

On January 15 2013, Myanmar called for the expression of interest regarding tender for two telecommunications service l icences . The main goals are to increase the overall teledensity of the country to 75% to 80% in 2015-2016, to make the telecommunications services available to the public at affordable prices, and to give the public the capability of choice for the telecommunications services.

In support of this policy framework and objectives, Myanmar intends to award two nationwide telecommunications service licences by the end of H1 13 in accordance with the guidelines that have been set out to be included in the new Telecommunications Law, which will soon be promulgated. Basic terms and conditions as currently contemplated are as follows:

  • T he telecommunications licences will be technology neutral;

  • T here will be a range of spectrum available across multiple frequency bands;

  • T he initial licence term will range between 10 to 20 years with the possibility of renewal;

  • T here will be a requirement to meet or exceed specified population and geographic coverage targets;

  • T here will also be a requirement to commit to reasonable tariffs and low initial registration fees in order to facilitate the g overnment ' s accessibility and teledensity targets;

  • B oth new and existing licensees will be expected to enter into infrastructure and facilities sharing arrangements in order to achieve rapid and cost efficient network deployment;

  • T he licences will be awarded via a comparative evaluation process.

Regulatory Development

Myanmar Post and Telecommunication ' s Minister Resign s

The Irrawady reported in mid-January 2013 that Thein Tun's resignation from the minister of Myanmar Post and Telecommunication (MPT) was due to a disagreement with the President's Office to drastically reduce SIM card prices. The ministry was supposed to announce the new prices on January 16 2013, but the press conference was cancelled after Thein Tun's resignation.

The President's Office had proposed reducing the prices for GSM and CDMA (450MHz) SIM cards to MMK50,000, but Thein Tun had reportedly argued that this would cost MPT to lose half of its investment. Instead, he counter proposed producing 4mn SIM cards with a price of MMK200,000, well beyond the reach of the average consumer.

Citing Tun Tun Lwin from the IGE Company , which has invested in the country with local IT firm Myanmar Yadanabon , the SIM card price announcement should be postponed until a new minister is appointed to replace Thein Tun.

This article is tagged to:
Sector: Telecommunications
Geography: Myanmar

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