Home MMBIZ News Telecom to Drive Myanmar Investment Surge in 2014-15

Telecom to Drive Myanmar Investment Surge in 2014-15

Telecommunications sector will drive the flow of investments into Myanmar in the next 2014-15 fiscal year, top government officials have said.

The Myanmar Investment Commission (MIC) projects foreign direct investment (FDI) numbers between $4 billion and $5 billion by 2015 as a result of the country’s initiatives in its emerging telecommunications industry, Directorate of Investment and Company Administration Director General U Aung Naing Oo said.

The telecom sector has the highest potential to attract FDI into Myanmar, and will rake in a total of 20 percent FDI in 2014, U Aung Naing Oo, who is also a member of Myanmar Investment Commission (MIC), said.

U Thaung Tin, deputy minister for communications and information technology, at a recent seminar said: “The liberalisation of the sector will give more opportunities for investment. The market with less than 12 percent penetration is undoubtedly a very attractive market for all potential investors.

“The government is committed to establish investment-friendly policy and regulatory frameworks for the sector.”

The minister said 2014 will be a “very interesting year” to watch for Myanmar’s telecommunications industry.

“With the new telecom law and giving out integrated nation-wide licence to two new entrants … the days of monopoly in the telecoms sector in Myanmar are over. 2014 will be the year of execution and implementation from the private sector.”

According to MIC statistics, manufacturing industry still remains at the top spot in terms of FDI, accounting for 50 percent of the total $3.5 billion in FDI in 2013-14 fiscal year, followed by hotels and tourism, then telecommunications. MIC expects the telecommunications sector to move a rank higher in the coming fiscal, with an estimated revenue of at least $4 billion.

U Aung Naing Oo said telecommunications sector has the potential to even grab the highest amount of FDI in 2014-2015.

Telenor and Ooredoo, the country’s first foreign telecoms licence winners, are now rolling out their networks around the country. Telenor has promised to supply within five years the network coverage for 90 percent of the population, with a target to break even in three years for the $500 million it paid for its 15-year licence. Ooredoo, on the other hand, has gotten its 3G network underway.

Ross Cormack, CEO of Ooredoo Myanmar, said: “We have a set of promises we have made the country through the bidding process which is now part of our licence and are now busy rolling out the very latest in 3G technology.”

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, U Aung Naing Oo said.

“In telecom sector, many service providers are now in talks to make investment in their associated fields,” he said.

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.

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