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Fixed broadband next phase of growth in Myanmar telecomms: ZTE

Yan Xiao, CEO of ZTE Myanmar, is convinced the next big area of growth in the Myanmar telecommunications sector lies in high-speed, fixed broadband internet. With competition in the mobile space getting more intense, now is a good time for internet service providers (ISPs) to consider offering high-speed, fixed broadband (FBB) services to retain customers and capture market share.

With demand rising for high-quality video on demand (VOD), “it’s a good time for Myanmar’s ISPs to transition from providing mobile internet access to FBB,” Mr Yan said at the ZTE Myanmar Broadband Forum on September 28. He added that local ISPs must anticipate and capture the upswing in demand now, “otherwise, you may never catch up.”

In Myanmar, the majority of users purchase mobile data. This is line with the government’s 2015 Mobile First master plan to connect 90 percent of the population and provide internet access to half at minimum speeds of 7.2 mbps by 2020. In fact, the mobile penetration rate in the country was already 98pc in 2017 compared to 30pc in 2014, which is on par with the rest of ASEAN, according to data provided by ZTE.

Lately though, demand is rising for uninterrupted, live access to popular reality television programmes like Myanmar Idol. According to a recent ZTE survey, the majority of those polled are willing to pay for access to high quality VOD.

Against that backdrop, mobile data is no longer the most efficient option for users to access the internet. As such, local stakeholders need to think ahead. “While mobile has done well in the past few years, FBB networks have not developed as fast. Now is the time to invest in upgrading the infrastructure and technology for FBB in Myanmar,” said Dr Francis Zhu, a senior executive at ZTE.

This includes upgrading from FTTH fibre technology to FTTX, which delivers the highest internet speeds to households and businesses. FTTX is the dominant technology used in developed markets today. Currently, the local telcos and some ISPs are providing FBB to their customers via FTTH technology. Only Myanma Post and Telecommunication (MPT), provides FTTX in some hotels, according to ZTE.

One of the setbacks to deploying FTTX in Myanmar is the lack of an updated National Broadband Plan. For example, Singapore in 2008 and 2009 committed to investments totalling US$700 million, while Malaysia in 2009 invested a similar amount towards developing broadband technology and infrastructure. According to a report by ITU, 151 countries have already unveiled such plans.

The basis of a solid National Broadband Plan will depend on the government’s capacity to build the broadband network and provide support such as subsidies or grants to operators, Dr Zhu said.

For the ISPs, the risk to providing FBB powered by FTTX technology is cost and high churn rates. At a time when competition is intensifying and customers are free to switch between service providers, investing large volumes of capital on new technologies may not be an attractive option for most companies.

One way to retain customers is by bundling services. According to a report by Ovum, global ISPs that provide bundles of at least five services had a churn rate of less than 5pc compared to a churn rate of up to 30pc for those that offered a single service. “Bundling is a powerful tool to lower high churn rates, where customers switch from one ISP to another,” said Dr Zhu.

Bundling is still a relatively new strategy in Myanmar though. Currently, MPT offers a bundle including FBB with Internet Protocol television, or IPTV, while Telenor has an FBB and over-the-top (OTT) media service bundle.

Local ISPs may not have a choice but to ride the current trends. Beyond local content, demand for exclusive, international content, such as newly launched television series, is already rising. “The first mover to deliver high quality, uninterrupted access to popular video content will grow substantially,” said Mr Yan.

SOURCE: MYANMAR TIMES

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