BG talks to Takashi Nagashima, Managing Director, KSGM; Ross Cormack, CEO, Ooredoo Myanmar; Petter Furberg, CEO, Telenor Myanmar; and U Shane Thu Aung, CEO, Yatanarpon Teleport/Royal Yatanarpon

Interview: Takashi Nagashima, Ross Cormack, Petter Furberg, U Shane Thu Aung

With mobile penetration on the rise, how can local small and medium-sized enterprises (SMEs) capitalise on the advancement of the telecoms sector?

TAKASHI NAGASHIMA: Not until recently have mobile services been a common tool in Myanmar. Through the advancements of telecommunications, SMEs, large corporates and individuals can have access to mobile services. The combined efforts of all sector operators to improve the network means that SMEs will benefit from better internal data communication in the near future.

Myanmar differs from developed countries such as Japan, where the focus is to provide value-added services on top of mobile services. The core focus of distributors and dealers in Myanmar at present is simply the distribution of SIM cards to assist in the mobile penetration drive. However, in the near future SMEs will reap more benefits as a result of individual operators offering more value-added services.

ROSS CORMACK: There is huge potential in Myanmar for SMEs to use mobile communications and technology to accelerate the country’s growth and speed up the development process. Myanmar’s business community, particularly its SME community, recognises this and has high expectations for how mobile connectivity will transform people’s working lives.

Mobile telecoms connects people, businesses and communities across the country, helping them realise their potential through access to services and information that previously remained beyond their reach. It increases efficiency, creates greater productivity and can spur innovation in other critical industries such as education, health care and finance, as well as contributing to overall socio-economic development.

Most importantly – and one particular way in which Myanmar’s SMEs can capitalise on these developments – is the creation of local content in the Myanmar language. This much-needed development will facilitate the growth of a vibrant SME sector in Myanmar, helping the country’s SMEs to accelerate the country’s growth and bring balanced development to the nation.

We recently worked with Code for Change and the US Agency for International Development to host Myanmar’s second hack-a-thon, an event that saw 117 of Myanmar’s best young developers, designers and entrepreneurs work almost continuously for 48 hours to build technology solutions to challenges submitted by Myanmar’s local SME community. The results were incredible and highlighted the great difference that mobile technology can make to the efficiency and productivity of these businesses.

PETTER FURBERG: Access to high-quality voice and internet services is, in today’s world, a fundamental tool for anyone who would like to do business. Each operator is expanding its network to cover larger parts of the country, which will give more companies and entrepreneurs access to these services and will support the growth of their businesses. Together with Boston Consulting Group, Telenor conducted a study showing that a 10% increase in mobile penetration can drive 1.2% growth in a nation’s GDP. In emerging economies such as Myanmar, the effects are even more pronounced: 10% more internet availability could lead to a 3-5% boost in GDP.

U SHANE THU AUNG: The development of SMEs is vital to the success of Myanmar’s economy. With the milestone advancements taking place within the country’s telecoms and IT space, many doors will open for Myanmar‘s entrepreneurs. Overseas operators have global accounts and already have their products, procurements and even software. It is unlikely that high-income jobs in intellectual and innovative areas will go to SMEs; however, the more labour-intensive jobs, such as tower building, could be filled by local SMEs.

What obstacles does Myanmar face in raising the quality of its human capital in the ICT sector so as to compete on a regional level?

SHANE THU AUNG: I believe we have good human resources (HR) within the IT segment, but there is a shortage in the telecoms industry. Myanmar Posts and Telecommunications was the only player in the market for so long. HR related to software development, mobile app development and e-commerce are strong, but there is a major shortage of senior-level management and a shortage in telecoms know-how. Other operators are using expatriates; however, I highly recommend developing and recruiting local experts in IT and telecoms. This will promote local people to management positions in the near future and that should be one of the main objectives of the sector.

While many operators recruit Myanmar people, they do not place them in positions higher than the level of manager or vice-president. I want Myanmar people to be in key positions, as this will help the efforts to develop successful human capital.

NAGASHIMA: We believe there is a lot of good human capital for the computer and software industry in Myanmar. The problem is that HR within the telecoms sector is lacking because of the monopolies of the past. Capacity will improve with time, however, thanks to increased competition. To survive we have to improve our HR as soon as possible.

There are many skilled Myanmar citizens working abroad in Singapore, Thailand and even Japan who are willing to come back and would bolster the talent pool. Working alongside these people who have good international exposure and solid training will undoubtedly develop the local skill set.

FURBERG: We are recruiting Myanmar citizens as employees both in the local and international market. However, in certain areas that require specific expertise we find that there are competency gaps that need to be filled over time with on-the-job training and education. That said, so far we have been able to recruit skilled employees with great attitudes who are eager to learn and develop within the ICT sector.

CORMACK: Over the last year we have placed great importance on training and sharing knowledge and expertise, something the country has not previously focused on. The thirst for knowledge within the country is immense. We are also working to help ensure that this development is not centred in urban areas where talent already exists. Last year Ooredoo partnered with the Cherie Blair Foundation for Women to empower Myanmar’s women entrepreneurs and to train 30,000 women as mobile retail agents. This franchise model is delivered in partnership with grassroots organisations and NGOs, and provides support such as training on how to run a business that also empowers women, their families and their wider communities. With this in mind, I would suggest that it will not be long before workers are able to not only compete on a regional scale but also educate their neighbours on advanced technology and its numerous benefits.

What approach is your organisation taking to educate low-income, rural communities about the benefits of being connected?

FURBERG: We believe people in Myanmar, like people in other countries, understand the value of connection with their loved ones and business contacts. Telecom services provide both security and access to information and other businesses, which is of value to people in any country. We will – through our mass market communication, and our shops and indirect retailers – help people to start using telecoms services and to understand how to best create value for themselves by using Telenor. In addition, Telenor is planning to open more than 200 Community Information Centres run by local entrepreneurs in order to provide access to internet, as well as training and technical support for the communities they are serving.

SHANE THU AUNG: We would like to contribute not only to mobile and internet penetration but also localisation of mobile communication and apps. Myanmar has many races and they have their own local languages. We encourage them to use mobile and data communication for their daily needs and growing their businesses. Language localisation is one of the key factors in educating low-income, rural communities. Therefore, communication devices must be available with their languages and we would like to provide our service without a language barrier.

CORMACK: We need to address technical illiteracy with educational outreach programmes by developing Myanmar language content and creating local language apps that help to empower people by addressing their daily needs. We cannot underestimate the importance of developing content in the Myanmar language, as this is at the very heart of helping to educate low-income and/or rural communities about the benefits of connectivity. One important initiative is to develop apps that provide a solution to the very real problems facing these communities, such as access to health care advice and agricultural information.

How will the advancement of the telecoms market impact the modernisation of the banking system?

CORMACK: The country’s banking system will become a great example of the technological leapfrog we hear about so frequently when discussing Myanmar. Mobile banking is already available here; however, only around 5% of the population has bank accounts. A key focus should be on mobile money solutions that enable customers to use their mobile phones to access a comprehensive suite of mobile financial services. Mobile money is critical to ensuring that financial inclusion is a safe, convenient and affordable option for the nation. The service is an innovative, easy-to-use and low-cost alternative for customers who have neither a bank account nor easy access to financial services. It is typically offered in partnership with a bank and enables the mobile operator’s customers to transfer money domestically and internationally, top up their own prepaid accounts or those of their friends and family, pay bills and, in some markets, receive salary payments using their mobile phones.

NAGASHIMA: As mobile penetration improves and reaches rural areas, mobile money transfers will increase. Banks are unable to expand their branch network as rapidly as mobile coverage expands, and from a bank’s standpoint, Myanmar is hindered by infrastructure limitations that inhibit expansion plans. As telecoms operators, we can contribute to banking operations with good mobile and fixed-line networks. But before that there needs to be an improvement in power supply. In short, the telecoms market will supplement the future development of the banking sector.

What indirect benefits can Myanmar’s economy expect from an improved telecoms sector?

FURBERG: Telecoms is an important part of the infrastructure of any nation. Due to underinvestment in infrastructure over many decades, the importance of heavy investment in infrastructure In Myanmar becomes even more important. Telecoms is one of the sectors in which investments will pay off in terms of increased benefits for the people. Providing good voice and mobile internet services at affordable prices will support SMEs. Access to mobile internet and information will also support young people in their education, and will further the democratisation process.

SHANE THU AUNG: If we can continue with the current reform and transformation efforts, a very dynamic and innovative environment will emerge. There will be a lot of room for growth in the next 5-10 years. Service providers will likely not have to compete on voice services but rather on value-added services, payment services and entertainment services.

Banks are also competing by using telephone and telecoms operators. Essentially, transformation will not be limited to the telecoms sector, many other industries will develop simultaneously.

CORMACK: The benefits can initially be seen in the form of increased investment in the country as international companies extend their products and services to Myanmar. Beyond this, the development of a vibrant telecoms ecosystem will also see the creation of opportunities for local businesses, as well as employment possibilities for tens of thousands of Myanmar people in roles such as sales, distribution and customer service.

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The Report: Myanmar 2015

Telecoms & IT chapter from The Report: Myanmar 2015

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The Report

This article is from the Telecoms & IT chapter of The Report: Myanmar 2015. Explore other chapters from this report.

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