Myanmar expects to cash in on big leap in telecom
The Myanmar Investment Commission (MIC) has begun counting its takings upon making a quantum leap in its emerging telecommunications industry, projecting foreign direct investment (FDI) numbers between $4 billion and $5 billion by 2015, according to a Bangkok Post report.
Directorate of Investment and Company Administration Director-General Aung Naing Oo, who is also an MIC member, said in the same report that the telecom sector has the highest potential to attract FDI into Myanmar, adding that it will rake in a total of 20 per cent FDI in 2014.
Last year, the government staged a bidding process for licences as service providers, which Norway's Telenor and Qatar's Ooredoo secured. The two telecom companies are expected to bolster mobile phone usage in the country, where reportedly only one out of ten people has telephone access.
Telenor has promised to supply within five years the network coverage for 90 per cent of the population, with a target to break even in three years for the $500 million it paid for its 15-year licence. Ooredo, on the other hand, has gotten its 3G network underway.
Following the awarding of licences, Ericsson, along with other telecom companies from Japan and Singapore, also expressed their interest in Myanmar.
The licence holders will still need support from other telecom companies in strengthening the telecommunication infrastructure, such as building fibre-optic lines and towers around the country, which is bound to contribute to the inflow of investment, Naing Oo explained through Bangkok Post.
While the foreign companies are seen as a boon to local players to help them gain traction in the field, Naing Oo believes that the government should create protection laws and provide financial incentives to help establish the local telecom sector's competitiveness.
The Bangkok Post also published MIC's FDI statistics showing that Myanmar's manufacturing industry still remains at the top spot, accounting for 50 per cent at $3.5 billion in the 2013-14 fiscal year, followed by hotels and tourism, then telecommunications. In the coming fiscal year, MIC expects the telecommunications to move a rank higher, with an estimated revenue of at least $4 billion.