Is Myanmar ready for 5G? If so, when and why?

Gayan Koralage & Deepti Jayakrishnan

Mobile leap-frogging in 2013-17 saved the Myanmar telecom industry decades in deployment time, and billions in infrastructure costs, and kick started the digital economy. How will it keep pace in the 5G era?

Myanmar is the first country in the world to move from the analogue system, bypassing the desktop-based internet, into the mobile internet, fueled by its youth, GenZ and millennials. 50% of Myanmar’s population is aged below 30 years, and 75% of them live in four major cities i.e. Yangon, Mandalay, NayPyiTaw and Mawlamyine. Today the telecom industry sits at 45mn data users, each consuming 3.3GBPS per month and average screen time per day of 3 hours. Isn’t that amazing for a country who built an entire telecom industry ground up in just five years?

Where is this data usage coming from? Social media, peer to peer communication and local video content. There are 20 million users on Facebook, which is the primary source for their news, events, promotion and marketing. Small corporates and SMEs may not have a website, but they will definitely have a Facebook page. Millennials and Gen Z look for guidance and inspiration on social media; 65% follow a thought leader on social media vs. 30% follow a politician.

What does that mean for the telecom sector?

It means, USD 3-5Bn invested in the mobile telecom networks over the last 5 years, 16,500 new telecom towers erected reaching 95% landmass coverage, USD1.8Bn of annual industry revenue, USD 560Mn industry EBITDA, 45mn data users and 1.8 Exabyte of total data consumed a year. Telecom is indeed Myanmar’s single largest source of FDI (47% of total FDI in 2017 fiscal year alone), and among the largest contributors of corporate income tax (Telenor alone has contributed over USD 200Mn in various taxes until date). By any standard, this is a remarkable achievement. Kudos to the industry players who invested and delivered these ground-breaking numbers. These have indeed enabled the shared economy, fueled the digital eco system, gig economy, catapulting millions above the poverty line into a better social and economic life.

Rewind 7 years ago…

In 2013, a sim card costs USD 900 on the black market. People have to wait for 3-12 months to get a sim card. Long queues in public call outlets(“PCOs”) to make an oversea phone call. 50% of landmass has neither electricity nor mobile coverage. Foreign students make phone calls to their families back home once a month. In small towns and villages, callers have to rely on old and outdated manual telephone exchanges where the caller has to ask the operator to connect his or her call.

What has changed in Myanmar with the new found digital economy?

Digital apps are everywhere, covering every segment of the society. Bringing disruption to traditional services and products.

Yangon Door2Door was launched in 2013 and became Yangon’s premier food delivery service. The last frontier in South East Asia's ride-hailing battle was breached with Grab, FastGo, Oway and other ride hailing apps’ entry into Myanmar. Netflix, Malaysian iflix, French cable TV channel Canal+ entered Myanmar in 2017. Local players like Mahar and Pyone Play too launched local content very quickly.

A youth, who is under employed or unemployed, who lives in a one of the key cities now has options to contribute to the national economy.

See below the startling statistics between 2013 and 2019:

Source: Myanma Posts and Telecommunications Department, White Paper Facilitating Faster Broadband and 5G Adoption in Myanmar, 2020.

All this is good, but what’s ahead of us?

Myanmar’s monthly data usage per connection is expected to grow from 3.3GB in 2018 to 11.3GB by 2022. This is the exact growth we have seen in Malaysia during the last 5 years period 2013 -19. So Myanmar’s next 5 years will likely see what Malaysia saw in last 5 years!

Myanmar ranks 157 out of 193 for Digital Government in the UN E-Government Development Index, and 133 of 139 for Digital Transformation & Trade, in the WEF Network Readiness Index. Still a long way to go!

Is Myanmar ready for 5G?

Absolutely.

As MNOs have complied with their rollout obligation in mid 2019 and there is a lull in rollout, the data usage is running through the roof. We need to move the network focus from coverage into rural areas, and capacity in urban cities and suburbs.

Two reasons why Myanmar is due for 5G:

First, it stimulates GDP growth. In a white paper on facilitating 5G adoption released last week, the regulator (Posts and Telecoms Department) acknowledged the World Bank finding that 10 percentage points’ increase in mobile penetration will result in a corresponding increase of 1.38 percentage points in national GDP growth. Higher the broadband penetration and/or broadband speed, higher we stimulate the shared economy and GDP growth.

Towards this end, the regulator, righty so, recommends establishment of a national infrastructure database to permit ‘check before you dig’ services, releasing more IMT spectrum for wireless broadband and 5G deployment, a requirement on MNOs to publish service level quality, and facilitation of Myanmar-centric content and applications.

 The PTD’s Universal Service Strategy released in Dec 2019 recommends infrastructure sharing for voice and broadband roll-out, ICT training to enable a digital future, and digital literacy programs including for the differently abled.

Myanmar’s policies (Telecommunications Master Plan 2015, the E-Governance Masterplan 2016-2020, Myanmar Sustainable Development Plan 2018 - 2030, The Myanmar Digital Economy Roadmap 2019, Digital Economy Development Committee with goals to be accomplished in 2020- 2025, Myanmar’s IMT and 5G Spectrum Draft Roadmap 2019) appear ready to welcome a digital economy. 

Second, perhaps most importantly, it brings the cost per GB down, and meets threshold affordability for millennials and GenZ.

But what are Myanmar’s next steps for 5G?

i) Malaysian model as a point of reference

Reference in the PTD’s white paper to the use of regulatory sandbox and 5G test beds is encouraging. The PTD could put in place a two year plan similar to that followed by the Malaysian telecom regulator. The MCMC started with a 5G testbed call for collaboration in Q4 2018, formation of 5G task force with MNOs and passive players as key members, 5G demo projects shortlisting 100 use-cases (55 use cases currently rolled out in 32 sites) in 9 verticals in six states, and similar steps, in readiness for 5G launch in Q3 2020.

ii) Expand Universal Service Strategy in line with international best practices

Include levy on, as well as permit use of Universal Service Fund by, passive infrastructure providers rather than just the four MNOs. This will provide passive infrastructure providers like towercos and fibercos great incentive and opportunity to collaborate for 5G, when business case is unclear but technology is mature. The Universal Service Fund could be used to pilot, and eventually scale up, innovative products and services such as open RAN, antenna as a service, satellite backhaul, etc to meet Universal Service objective of bringing connectivity to remote and rural areas.

iii)     Engage digital expert advisor per industry to execute existing lofty plans

For instance, Myanmar is amongst Asian countries with the least banking sector penetration. Could Myanmar leap frog from little access to banking facilities, to universal access to online banking through apps, as Kenya did, to eventually become a world leader in mobile money technology? With advice from either neutral industry experts, or from similarly placed countries’ industries’ regulators, the possibilities for enabling a digital economy are truly endless, as long as good governance accompanies them.

I anticipate Myanmar’s year for 5G will be 2022. Let 2020/21 be years to bring stability and much needed breather to industry players. Let industry reflect the best way to proceed and come back strong in next 24 months. And there is no better industry reference than Malaysia.