What does an 80% mobile penetration in 3 years mean for the Burmese people?

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President Thein Sein has set as a target to grow mobile penetration from the current single digit penetration to 80% in 3 years. What does that mean in terms of the number of mobile phone that need to be sold per year to hit the 80% target? What is the impact of the entrance of 2 foreign telecom operators on the life of the average Burmese people living in urban areas? 
[Caveat: The target of 80% mobile penetration has been revised down to 50% by Set Aung, the chairman of the telecom selection committee in May 2013] 

Est Mobile No of Growth in Value
Penetration Mobile user Mobile Users of mobile phone
at end of yr at end of the yr from prev yr sold at ws price
Year (%) (mil unit) (mil unit) (US$ mil)
2013 7% 4.2 NA NA
2014 16% 9.5 5.3 842
2015 36% 21.3 11.8 1,896
2016 80% 48.0 26.7 4,270


Assuming that we have a population of 60 million people in Myanmar. Our assumption is that on 31 Dec 2013 we have 7% mobile penetration in Myanmar that works out to about 4.2 million mobile phone users. By end of 2016 we need to have 48 million mobile phone users in Myanmar to hit the 80% target. That is that mobile phone ownership needs to grow at an annual rate of 152% from 2014 to 2017 in order to hit the 80% target!

That would mean that by 31 Dec 2014 we need to have 9.5 million mobile phone users which work out to be a mobile penetration of 16%. That means that the telecom operators and its retailers need to sell 5.3 million handsets in year 2014.

By 31 Dec 2015 we need to have 21.3 million mobile phone users which work out to be a mobile penetration of 36%. That means that 11.8 million handsets need to be sold in year 2015.

By 31 Dec 2016 we need to have 48 million mobile phone users which work out to be a mobile penetration of 80% (our target). That means that 26.7 million handsets need to be sold in year 2016.

As the developed countries are all moving to 4th generation mobile technology (4G) – we can assume that the 2 new telecom operators will introduce the latest 4G mobile network technology here in Myanmar in 2014 i.e. Myanmar will leap frog its neighbours and go straight to 4G mobile communications. The implication of having the latest 4G network is that users can surf the internet at 1 gigabit per second using their smart phone, tablet and laptop using just the mobile network. That would also imply that consumers and corporate users in urban areas will abandon their current mobile phone or internet service providers who are not able to match the new 4G network in terms of internet speed, convenience and cost effectiveness!

Take note that with a 4G network to access the internet on your laptop or desktop computer all your need is just a data modem with a SIM card. There is no need to wait for an ADSL line or fibre optic cable to be laid all the way to your house or office. In a heavily built up and congested city like Yangon the 4G network is ideal for this reason – no digging of roads to lay fibre optic cable just to get broadband internet access into the homes and offices.

With a 4G mobile network we would assume that from 2014 onwards 60% of mobile phone sold in Myanmar will be smart phone i.e. Android or iPhone so that users can use internet services delivered over the high speed mobile network. Based on my observations most of the taxi drivers in Myanmar are not only driving newer car they are also carrying the latest model of Android smart phone. So as a matter of Face – no one in Yangon or any major cities in Myanmar would be caught dead using a feature phone (traditional mobile phone) from 2014 onwards when a 4G network is available and all their friends and neighbours are using the latest smart phone and accessing internet services using the 4G network.

If we assume a 60 / 40 split between smart phone and feature phone in terms of sales volume and an average wholesale price of US$160 per mobile phone – the Myanmar market for mobile phone is worth US$842 million, US$ 1.9 billion and US$4.3 billion respectively in 2014, 2015 and 2016 at wholesale price level. So the mobile phone importers, wholesalers and retailers in Myanmar will be laughing all the way to the bank.

So what are the impacts of the entrance of 2 new telecom operators on the life of the average Burmese people living in major cities?

First and foremost – the way we communicate with one another will be different. We will all be using instant messaging apps like WhatsApp, Wechat or Viber on our smart phone instead of sending the traditional SMS like what our neighbouring countries are doing. Instant messaging apps such as Wechat and Viber are free to download and use as long as you are able to tap into the Wi-Fi network and get onto the internet. So yes, the average Burmese living in urban areas will be able to chat with their friends overseas using Wechat or Viber for free. Yes again we will leap frog our neighbours who are still sending SMS as we will go straight into instant messaging culture when the 4G network is up.

When we go to a new part of town and we are not familiar with the roads – we can just whip out our smart phones and use Google Map and our smart phone’s built in GPS function to navigate around.

Location will become more important for building owners, retailers and business owners. Enterprising young entrepreneurs will create location based services that take advantage of the 4G network to provide new services such as taxi booking, restaurant recommendation, tutor recommendation, house hunting, etc that are delivered over the 4G network.

Online payment and internet banking will also become possible with the 4G network.

As smart phone becomes ubiquitous in urban areas – shopping malls, restaurants and cafés that want to attract young people who are on their smart phones all the time – would start to provide free Wi-Fi on their premises.

Yes the life of the average Burmese people will be better due to access to state of the art mobile communication technology and services. My hope is that in 2017 – 3 years after the rollout of the 4G network the average Burmese will still have time to meet their friends at their neighbourhood tea shops, sit around the small table and just talk about the latest football game or the latest lottery result.

Technology has a way of making life more impersonal as can be seen by the number of young people in Hong Kong or Singapore whose eyes are constantly glued to their smart phone screen and chatting with their overseas friends via WhatsApp or Facebook but do not have time to talk to their friends sitting next to them. Let’s hope the Burmese people will have the wisdom to use technology wisely.

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