Last year I blogged about Asia’s final frontier in telecom. This week I had the privilege of visiting Yangon and meeting some of the movers and shakers of the telecom industry in Myanmar. Since last year, the ambitious and recently reformist ASEAN republic has licensed two international operators, Telenor of Norway and Ooredoo of Qatar, to build out mobile networks, as well as entered into agreements with other investors to put money and know-how into developing the industry.
Myanmar is the 73rd country I have worked in, and from what I saw this week, it promises to be one of the most illuminating. The country’s senior policymakers, as a group, are quietly shaping the emergence of an economy which was largely forgotten by the rest of the world until a decade ago, evidently with a sharp appreciation for what needs to be done to keep growth on track. What is Myanmar doing right in telecom, and what can we learn in India from this?
- A unified vision for growth: There is unanimity in different quarters of Government in expressing what Myanmar’s telecom sector has to do to enable economic growth and social inclusion. In India, partly due to having the complexity of state versus union, the debate around what telecom’s role has not always been so straightforward. In particular, there has been a hot debate around whether the sector should be a source of growth, or a source of funds for the Government budget. This battle has never been resolved satisfactorily and until revenue takes a back seat, the industry will remain at crossroads as to whether it is a goose that lays golden eggs, or a golden rainbow that shows us a path to faster industrial growth.
- A policy and regulatory framework that remains simple: I am impressed by how simply policy makers and strategists in Myanmar can articulate the policy framework. Granted, Myanmar is in the early days of liberalisation and the real policy challenges will only emerge in a few years’ time. By contrast in India, 20 years after liberalisation, the industry’s policies appear confused and inconsistent. Anybody looking afresh at the current spectrum allocations in India would struggle to understand the rationale for why players have the present mix of 800MHz, 900 MHz, 1800 MHz and 2100 MHz spectrum, in different quantities by circle.Part of the complexity comes from having circle-circle allocations. The situation today is also the result of incremental steps to allocate spectrum over many years without the benefit of a long term spectrum plan. This incrementalism has in the past been driven by anecdotal and expedient interventions to balance out one unfair outcome with a corresponding compensation. In total this has resulted in a messy outcome. I saw the same in Egypt, another country where telecom regulation was intensely deal-based and lacked long-term strategy. In recent years the Indian regulatory authorities have tried to iron out some of these complexities, but it will take a generation of licensing to finish the job, and we still lack a long-term spectrum plan for India that shows how the industry will attain the spectrum it will need to meet demand.
- A single market: India being such a vast sub-continent, it is never going to be a single market. By contrast, Myanmar is a market of 50+ million people, regulated as one with a single regulatory framework and single licensing nationally, with spectrum allocations which are in line with this. There is also, from a market point of view, a single language group across the population. Whilst India does not simulate this, there is merit in considering how certain sub-markets could be encouraged to be more national/sector-wide. The biggest opportunity lies in data services. Local developers in India struggle to find the market big enough to write apps for, and would see more potential if they could do business with the industry together rather than each operator one by one. And if there is more innovation to encourage multiple vernaculars to access common services (eg. through voice commands) then India’s many geographies might be more easily looked at as a whole market.
- Reasonable pricing: So far, Myanmar has not seen a major price war for voice services. It is extremely early days, with only one of the newly licensed operators having launched so far, and therefore its not yet seeing the dynamics of a three-player market yet. 3-player markets are notoriously known for leading to much more drastic price changes than duopolies. But the signals suggest we will not see a mad cap price war in Myanmar in the near future, and this bodes well for ensuring a reasonable balance between protecting consumer choice, value and rights, as well as encouraging prosperity for an industry that will need to invest significant sums to build infrastructure. In India, the operators have been bankrupted through high spectrum charges and low operating margins (and a lack of spectrum), resulting in a slower build out than could be expected in rural areas, and worse quality of service in urban.
Of course there is perhaps more that Myanmar can learn from India’s experience, too. For starters, India is the one emerging market in telecoms that has seen the most innovation when it comes to marketing – both pricing for services as well as analytics to drive better customer segmentation and targeting. No other country can boast a better handle of micro-segmenting customers and targeting them with offers. And India can claim to be the country that invented “sachet pricing” for telecom, borrowing shampoo pricing techniques to bring the option for consumers to buy their telecoms services in tiny chunks at a time.
Myanmar has probably more to observe in India than vice versa, but it would do no harm for our policy makers to see what’s happening over in Nay Pi Daw from time to time, to remind themselves of the days when life was simple and the plan was clear.