• Inside Development
Feature: Myanmar's telecoms sector

Is Myanmar ready for a telecommunications revolution?

By Michael Igoe16 May 2014

A monk takes a photo using his mobile phone at the Shwedagon Pagoda in Myanmar. According to the World Bank, just 10.3 out of every 100 people in Myanmar have mobile cellular subscriptions. Photo by: abrinsky / CC BY-NC-SA

May 16 is World Telecommunication and Information Society Day, according to the United Nations.

This time next year, that might actually mean something in Myanmar, where 90 percent of the population lacks access to mobile communications. But will it be cause for celebration?

Myanmar’s telecommunications sector is about to explode. International investors, foreign aid donors, multinational providers and technology manufacturers have all jumped in to pioneer one of the least developed communications sectors on the planet. The hope is that Myanmar’s late entry into the information and communications market means it can “leapfrog” over landlines and slow service directly to low-cost and high-connectivity options.

Mobile penetration, optimists argue, will drive access to information and lead to greater government transparency in a country struggling to shed its legacy of international isolation and join the ranks of globalized democracies. Growth in the ICT sector, many hope, will link Myanmar’s small businesses to new opportunities and connect citizens to each other — and to a world of online information in a country that was effectively closed for business until 2011, when the military junta finally loosened its decades-long grip on power and newly-elected President Thein Sein initiated a process of democratic reforms and economic liberalization.

But now that Myanmar — also known as Burma — is encouraging private investment across all economic sectors and international organizations have rushed to lend their expertise and resources to the liberalization process, the government faces an array of regulatory reform demands that could outpace its own capacity to formulate and enact new laws.

Private investors, meanwhile, are chomping at the bit to get a piece of the telecoms pie, but some groups are wondering whether the government has the ability or even the will to protect its citizens’ privacy, prohibit crackdowns on information access and safeguard against cybercrime in a country still struggling to balance democratic reform with a legacy of harsh repression.

As a country’s communications infrastructure becomes more advanced and more ubiquitous, issues around data protection and retention, privacy and cybercrime grow more and more acute. In Myanmar, that transformation will be rapid and extreme, and various government ministries will have to carve out new authority to create and implement regulations that have never existed before.

Partnerships between foreign aid donors, private developers and government ministries — while promising for their potential to forward positive development outcomes and safeguard against rights abuses — are in their nascent stages. The regulatory reforms so far in place for Myanmar’s ICT sector do more to facilitate private investment than they do to support a clear national policy around information access and security or ICT development for social good.

The World Bank, for instance, has initiated telecommunications sector reform assistance, and other development institutions are exploring opportunities to exert positive influence over Myanmar’s ICT sector — but most of the gains so far have focused on spurring private investment, not protecting human rights.

In February, the bank approved an International Development Association $31.5 million credit for creating an enabling environment for connectivity, extending connectivity to rural areas and enabling “e-government” foundations. However, while that project includes a due diligence review of Myanmar’s telecommunications regulatory regime and will highlight any risks developing the sector could pose to citizens, there is no specific condition within the project that requires the government to revise its legal and regulatory telecom framework in order to receive technical assistance and funding.

Human rights NGOs have raised alarm bells that foreign aid donors like the World Bank have not advocated strongly enough for human rights laws to be conditions of their support for Myanmar’s ICT sector, which they say lends the government legitimacy without holding it accountable for actually achieving change.

NGOs submit their complaints

“We recognize that a due diligence review of such laws does not necessarily amount to a successful revision of Burma’s/Myanmar’s legal and regulatory framework,” Khin Ohmar from the Burma Partnership wrote to World Bank Myanmar Country Director Kanthan Shankar in February.

“The bank should amend the project agreement to condition the implementation…on the realization of a legal and regulatory telecom framework that is in line with international human rights standards. Without the realization of such a framework, the government could retain the ability to wield abusive powers and violate the privacy, freedom of expression, and other basic rights of the people,” Ohmar added.

Tenzin Dolma Norbhu, the World Bank’s senior ICT policy specialist, responded in an email to Devex that “while a due diligence review is not tantamount to law reform, it is a necessary prerequisite to legal reform.”

For years the Washington, D.C.-based institution has been criticized by NGOs for imposing too many conditions on its funding for country projects. Now, the World Bank is being singled out for not doing enough to embed specific requirements and conditions into its assistance projects. In the case of information and communications privacy rights, the challenge of striking that balance between emphasizing human rights and permitting country ownership of the reform process is made all the more difficult by the bank’s own organizational structure, which requires buy-in from countries with vastly different opinions about the meaning of “information security.”

NGOs have also noted that the World Bank’s public stakeholder consultations — meant to engage Myanmar’s citizens and civil society groups in ICT development planning — have been more for show than for substance, occurring with little advanced notification about when they will take place or what the relevant laws and project plans under discussion actually mean.

In a country where ethnic tensions still threaten to derail democratic progress, and where large-scale private investment — particularly in agriculture — has surfaced numerous reports of land- and resource-grabbing, ICT development — which could be among Myanmar’s most promising pathways to rapid growth, free commerce, and open discourse — could become the latest lightning rod for the international community’s newest development darling.

A country ripe for connectivity

Myanmar’s ICT sector presents an opportunity for “greenfield” development — projects that are unburdened by inherited infrastructure — that few other countries on Earth, perhaps only Cuba and North Korea, can match. And with that lack of inherited infrastructure comes a huge amount of unmet demand for mobile services.

According to the World Bank, just 10.3 out of every 100 people in Myanmar have mobile cellular subscriptions. That is staggeringly low when compared to every other country in the region, for example neighboring Thailand, where there are 125 mobile cellular subscriptions for every 100 people.

The lack of connectivity is due to a lack of infrastructure, but also in large part to the state-owned Myanmar Post and Telecommunications agency’s monopoly on telecommunications service provision, which has pegged prices — especially for mobile SIM cards — at exorbitant, unattainable levels for the vast majority of citizens in a country where poverty levels still hover around 25 percent.

As Myanmar has over the past few years moved to open its economy to foreign investment and allow market forces to determine prices on mobile equipment and services, private companies and investors have jostled for position. That is true across the board, with private investors crowding in to be among the first to make their mark on a largely untapped economy in a wide variety of sectors, from agriculture to mining to manufacturing. Telecommunications firms have been near the front of that push, and the ICT sector could be one of the most lucrative and transformative for the country’s economy.

In order to spur that investment and ultimately reduce the price of mobile communications for its citizens, the government issued a licensing tender and passed a new telecommunications law last year. The telecommunications law makes it easier for international telecoms companies to operate in Myanmar, and after significant delays two companies — Norway-based Telenor, one of the world’s largest mobile telecommunications companies, and Ooredoo, formerly Qatar Telecom — signed license agreements earlier this year.

Telenor and Ooredoo will now invest billions to build out the country’s mobile network and will begin to sell more affordable SIM cards. The two companies have both projected they will expand coverage to at least 90 percent of Myanmar’s population in the next five years. They have also noted the distinct need for a sound regulatory environment to make that projection a positive reality for Myanmar’s citizens.

 “We are optimistic that the law and the implementing regulations, that are also being developed, will create a clear and stable regulatory environment,” a spokesperson for Telenor Myanmar told Devex. “We understand that international experts have been involved in drafting the regulations and believe the authorities are committed to implement a modern and effective regulatory environment.”

Some observers hope the sheer force of the ICT market and the growth potential it carries will help make the case for a global, open and secure telecommunications culture, but the argument for openness is more difficult to make for countries that have not yet seen those benefits accrue.

“How do you have that conversation to convince these countries that the global, open, secure internet is in their economic interest?” Adam Segal, senior fellow at the Council on Foreign Relations, asked at an event on Internet governance on Thursday.

He added: “It’s been harder than you’d imagine because most of the data comes from the developed world. We can show that an open internet helps us and the OECD countries. We’ve had a harder time doing it for the developing countries.”

As a number of independent assessments have pointed out, a big part of the challenge — and a potential source of frustration for reform advocates — will involve figuring out what various donor agencies and international institutions plan to focus on in reforming Myanmar’s ICT sector.

“If the EU is already working with the government on reforming privacy legislation, for example, there is no need for the World Bank to duplicate that effort,” Norbhu wrote. “No doubt there will be other donors operating in this space. The bank will under the project help coordinate the efforts, and where necessary fill gaps.”

Gaps in donor coordination in a country where the capacity to absorb and manage foreign aid funding and projects remains highly limited could hinder the international community’s ability to focus money and effort on the most critical regulatory issues.

At the same time, with so much change occurring so rapidly and in so many economic sectors in Myanmar, international investors and donors will have to be careful not to overwhelm the government’s capacity to formulate and implement new regulations that require a high degree of technical expertise in areas like telecommunications, which have never been prioritized before.

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Read more:

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About the author

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Michael IgoeFollow@twIgoe

Michael Igoe is a Global Development Reporter for Devex. Based in Washington, he covers US foreign aid and emerging trends in international development and humanitarian policy. Michael draws on his experience as both a journalist and international development practitioner in Central Asia to develop stories from an insider's perspective.


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