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The land of the $20 smartphone

“This one $40, this one $30 … that one $20!” The owner of the street stall, a man of about 30 years wearing a traditional longyi tied around his waist, is gesturing at a phone that looks, to my eyes, like a mid-range Android phone.

It bears the brand Singtech, a brand among myriad others you’ve probably never heard of, and a stick on the screen show app icons for Facebook, WhatsApp, Twitter and Yahoo.

The centre of Yangon, in Myanmar, is dominated by Sule Pagoda, a golden stupa Buddhist shrine that hosted a ‘saffron revolution’ of monks in 2007 on the country’s slow path towards democracy.

But the stupa is not the most important gleaming icon here.

That honour goes to the curved shapes of aluminium and polycarbonate on sale on almost every street stall on Mahabandoola Road. Myanmar is now the land of the $20 smartphone.

Chances are you’ve never seen so many phones in one place. So why so many, and why so cheap?

People here often have a couple of phones for multiple SIM cards because when the mobile networks were being built a few years ago that was the only way to ensure connectivity wherever you went in the country,” says Brad Jones, CEO at Wave Money, a joint financial technology venture between Yoma Bank and Norwegian mobile network operator Telenor.

Now, 80% of the population gets a 3G signal, and in urban areas, 4G. The real revolution here isn’t democracy, but the influx of the phone.

But there’s still work to be done by the networks, so having two devices remains common.

It’s all happened virtually overnight. Prior to 2012, Myanmar – which shares borders with India, Bangladesh, China and Thailand – was ruled exclusively by the military, but is now in transition from military dictatorship to a civilian-led administration.

Back in 2012, SIM cards cost $2,000 each. GSMA Intelligence rated Myanmar as the third-least penetrated mobile market in the world.

Everything changed in 2014 when Telenor and Qatar telecommunications company Ooreedo entered Myanmar, building extensive 3G mobile networks (Myanmar skipped 2G completely) alongside the state-owned network of the Ministry of Posts and Telecom (MPT).

Millions of SIM cards then went on sale for just 1,500 kyats ($1.50) each, and can be topped up for just 1,000 kyats ($1). Phone ownership went from zero to 50% almost overnight.

Having leapt straight into the smartphone age, the country is unencumbered by years of legacy infrastructure, which many think leaves it ripe for innovation.

“With a growing population of over 53 million people and an equally growing middle class, Myanmar is constantly in search of new technology to use,” says Stuart Thornton, VP Business Development for Asia-Pacific at Worldpay.

“Coupled with the internet penetration rate [this was expected to reach 80% by the end of 2016] I see an exciting future ahead for this market.”

Read that again. Some 80% percent of people use the internet, up from almost no one just a few years ago. They’re all doing it on phones – computers and laptops are very rare here – and 80% of those phones are smartphones.

Smartphone penetration is 79% in the USA and 77% in the UK, figures that have taken a decade to reach. Myanmar has done it in under two.

Posters across the country advertise data packages that verge on a giveaway, going as low as one kyat per megabyte – that’s $0.00072.

“I suspect multiple SIMs are being used to [make use of] the best deals,” says Jones, who adds that the fierce competition between the mobile networks are the reason data is so cheap.

Network loyalty here is almost unheard of, as are domestic fixed landlines (just 4.8% of the population has access to a landline phone); the public phone stands on the streets of Myanmar, once the nation’s only means of communication, are now empty.

And all this in a country where only 49.5% of homes have a TV.

It’s not all about cheap phones; there are a smattering of reasonably high-end smartphones selling from bricks-and-mortar shops, such as Samsung’s J7 and J5 Prime handsets, Oppo’s F1s ‘Selfie’, Vivo’s Y55, ZTE’s Smart L110, and various phones from Huawei, one of the top-selling brands.

These handsets have better cameras, superior build quality, dual SIMs, and massive poster campaigns promoting them.

I did spot one second-hand iPhone 6 going for $130, but that kind of deal is a massive exception here; what really sets Myanmar apart in south Asia is that all of its smartphones are brand new.

“There is almost no second-hand market for phones here,” says Jones. “The average life of a phone can be some years, and though they often get recycled and resold all over Asia – especially in places like Cambodia – the mobile phone penetration was so low in Myanmar that there just hasn’t been a secondary market so far.”

It may be a mobile miracle, but Myanmar remains on the United Nations’ list of ‘least developed countries’; its GDP per capita is $5,500 / £4,479 / AUS$7,340, and only 16% of rural homes have power.

According to the World Bank, 37.5% of the population lives in poverty. But somehow, while feature phones are all the rage in countries in southeast Asia – and the odd market stall here does stock the low-power devices – Myanmar has largely been able to skip straight to handsets capable of running apps.

“Most phones are sold by mom and pop shops around the country for between $30-40, which will give you Facebook, Viber and YouTube connections,” says Jones, who thinks that the raging popularity of these apps is making all of them hugely attractive platforms inside Myanmar.

“The digital footprint here is huge, and it changes the way products and services can be distributed – this is a mobile-first country.”

Worldpay’s Thornton adds: “Myanmar is a perfect storm of e-commerce opportunity. A stabilising government with pro-economic policies, a huge wave of economic development, and significant investment into technology and communications make it the world’s fastest growing mobile market.“

That economic development is tricky in one way: Myanmar has no significant banking system.

Cue an economy built almost exclusively on apps. At least, that’s the hope behind services like recently-launched Wave Money, an example of using your phone as a primary means of payment.

Users access an account via an app, pay cash in at a Wave shop (there are 4,500 Telenor shops across 50% of the country already), then send it to anyone else using their national identity card number.

“Only about six per cent of people in the country have a bank account, and there are 3.1 bank branches per 100,000 population,” says Jones. That’s the same level as South Sudan, Haiti and Afghanistan.

There are also strong social benefits to enabling this easy transfer of money around the country: Myanmar is a place where it’s common for people to work away from their families, and phones allow them to send money back home.

“There’s also a social benefit because when they’re not sending money back regularly, it’s common for men who’ve been hired by construction companies to drink a lot and return home with a lot less than their total wage,” says Jones.

Myanmar is also a country where messaging apps rule. “Consumers in many Asian markets are more likely to have a Facebook account than a bank account,” says Thornton. “The option to make mobile payments or peer-to-peer transfers allows them to take advantage of these services.”

This is digital banking, and it’s making Myanmar’s financial ecosystem much more inclusive.

Myanmar’s mobile miracle is based upon two things; the ability to build apps – particularly for Android (the platform has a 92% market share here) – at relatively low price, and the flow of cash.

In a country without bank accounts, that cannot be understated. Jones says that having kiosks where people pay cash in and get cash out – all while using their mobile phone number as a substitute for a bank account – is critical.

Financial services through a smartphone won’t stop here. Although Wave Money is focused on money transfers, it can also be used to buy airtime and, soon, pay bills and organise loans for farmers and small businesses from micro-finance companies.

Mobile agriculture is beginning to emerge in Myanmar too. Agriculturally-focused apps from network operator Ooredoo, as well as Farmer and Green Way gives farmers – who make up 80% of the workforce in Myanmar – everything from local weather forecasts and the latest crop prices to advice on specific crops and the law.

“High smartphone penetration means the latest information about crop prices is now being shared for the first time, democratising information that previously had been very difficult to access,” says Jones.

Farmers can now go to market knowing the latest prices for their crops and, indeed, decide whether to go at all.

Another example of how apps can change lives relatively easily and quickly in Myanmar is Ooredoo’s award-winning MayMay app, which offers maternal and child health advice to pregnant women in a country with high infant mortality rates – and has done so more than 30,000 times already.

“With apps like MayMay we are delivering services and tools that use this technology to help people improve their lives,” says Ross Cormack, CEO at Ooredoo Myanmar.

Once you spend time in Myanmar and look into the recent technological history, it’s easy to see how the company has leapt into becoming mobile-first. In the West, by comparison, most people are still used to traditional banks and are hard-wired to carry around bank cards.

Westerners don’t even seem to have a use for the likes of Android Pay and Apple Pay. Even in the major market of the US only 7% now use Apple Pay once a week or more, which is hardly a significant change in how the economy works

However, in emerging markets like Myanmar, neighbouring Bangladesh and Kenya – the latter the world’s biggest mobile money market – smartphones and mobile money are proving transformative for the rural poor.

Go to any road-side stall, beer station or cafe in Myanmar and you can get served a bowl of noodles, a green tea or a beer while sitting beneath a photo of Aung San Suu Kyi, a major figurehead in the country’s march to democracy.

But while her image is everywhere, those $1 SIM cards selling in every kiosk are just as much of a testament to the rapid change engulfing this country.

That’s Myanmar’s mobile miracle.

Source: Techradar

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