Brave new world: Rapid development of the sector presents a wealth of opportunities

In 2014 Myanmar’s IT industry will see an explosion of activity that promises to transform almost every other sector of the economy over the coming years. Yet experience and training are severely lacking at present, and education will need to catch up quickly with the rush of technology if the country is to take full advantage of the trend.

As new telecoms providers begin to expand mobile and internet penetration, greater numbers of citizens will be able to access the web and online services, and more businesses will be connected to a wider global forum. With added connectivity will come the opportunity to leap forward and install the latest technologies immediately without following the trodden path of other nations. From 2014 onwards there is the chance to begin a new wave of IT and web services operations, local content creation, e-marketing and governance, and many more unforeseen developments within the sector.

Yet the country still suffers from one of the least established ICT infrastructures in the world, and an education system crippled by the previous military-oriented regime. With a severe lack of hard infrastructure this progress may be more drawn out than expected, and while some areas can be leapfrogged, others will require many years to develop.

History

When internet access was enabled in Myanmar in 2000 with a 128-Mbit backbone connection, there were only 11 registered entities that provided IT services in the country. Most of these companies were to service the ministries that would use the new network, rather than developing private businesses. The sector grew gradually under the authoritarian regime that closely regulated all IT activities. Strict sanctions imposed by Western nations also prevented direct sales of many computer goods to Myanmar and, while most products were available, they were sold at a significant premium.

Today, however, 700 companies are registered with the Myanmar Computer Federation (MCF), and the doors have been opened for both local and foreign companies to begin expanding the IT space.

“Before it was possible to buy Dell, but at a premium price because they were imported indirectly,” said U Thaung Su Nyein, the managing director of IT company Information Matrix. “Now we have direct Dell sales in Myanmar with customer support and after-sales service, and HP will be here any day now.”

Information Matrix has been one of the few IT companies operating since internet arrived in Myanmar, even when sanctions and restrictions prevented it from expanding. Many projects were shut down by the government before the company began publishing a print magazine that took content from the internet to publish locally. “When we started our publication, the government told us that the word ‘internet’ was censored, so we had to work around that even though the journal was about the internet,” said U Thaung Su Nyein. The journal became the most successful publication of the era in terms of circulation, with 150,000 copies throughout the country, showing how hungry citizens were for information from outside, and their desire to understand technological advancements.

Local Content

With added connectivity will come greater demand for programmers and web designers to produce local, rather than just English-language, content. Yet there is a debate as to how much local content will be created and how quickly, given that most locals speak English reasonably well.

At the end of 2005, a new font, “Zawgyi-One”, was publically released by developers frustrated by the lack of a Burmese script font at the time, thereby enabling easy printing and typing of the language, and also allowing web designers to easily create Burmese-language websites. “We are beginning to see the trend,” U Thaung Su Nyein told OBG. “Burmese will be the dominant language for local internet.”

Domains

Local domain names have also been in growing demand over the past few years, albeit from a low base. For the first 10 years of internet access in the country from 2000-10, only 500 .mm domain names were sold. With a new price of $50 per year and promotion from the Myanmar Technology Gateway (MTG), the privately-owned official domain registrar for .mm country domains, over 3000 domain names were sold in 2012, the majority being foreign companies looking to enter the Myanmar market.

The MCF understands the importance of local traffic and of building a web space in Myanmar. To encourage further local content creation and keep some of the growing internet traffic internal, the organisation has created an initiative to promote the .mm domain and ensure that prices do not get prohibitively expensive. Any company or individual will have to register with the MCF and give details about themselves to obtain a .mm address, in order to prevent speculative purchases of domain names that could drive prices up and hamper local content creation. “The initiative has been a success,” said U Zaw Min Oo, CEO of MTG. “But we still need to ease the traffic from the international backbone and encourage more local hosting services.”

Neighbouring Thailand, for example, has almost twice the amount of local traffic as international traffic, and this may be a sign of things to come for Myanmar as its net usage grows.

Freedom Versus Security

The internet brings challenges as well as opportunities. Anti-government protests fuelled through Facebook and other social networking services have surfaced around the world in recent years, and Myanmar faces unrest on a smaller scale in a fragile period of development.

In January 2013 Google’s chairman, Eric Schmidt, visited the country in the name of information freedom, lauding the internet as a key tool in giving the people of Myanmar a voice and encouraging IT and telecoms companies to expand. Google launched its Myanmar search portal, www.google.com.mm, at the beginning of 2013, supporting local languages Mon, Karen, Kayah, Pali, Rumai, Palaung, Shan and Burmese.

Schmidt commented in his blog that Myanmar was entering a “dangerous period for the internet”, given that freedom of political speech is a one-year-old concept there. Where Myanmar once had severe restrictions and a fine filter on all web and email traffic in the country, it now allows residents to surf unobstructed, though the government is considering a Law of Intervention to prevent certain flows of traffic in extreme scenarios such as terrorist attacks and violent protests, in line with developed nations’ anti-terrorism surveillance programmes. Given the ethnic unrest and religious tensions resurfacing in the new Myanmar, Schmidt’s comments come as a double-edged sword. “The internet will make it impossible to go back,” he said.

Leapfrog

However, rather than go back, many believe the sector will jump forward far faster than its Asian peers. In the ICT sector Myanmar now has the opportunity to leapfrog over the past 50 years’ development and install the latest, most efficient and high-tech services immediately. The infrastructure laid out in the coming months can be state-of-the-art, lining the path for a tech sector that could rival its neighbours. “There’s no time to leapfrog, we must grow wings and fly!” said U Thaung Su Nyein.

The new international telecoms licence winners, Telenor and Ooredoo, will have permissions to systematically develop the telecoms services they deem most appropriate in Myanmar. The opportunity may arise to install 4G capabilities immediately alongside 2G and 3G services. But there is doubt as to whether the licence and the corresponding Telecoms Law will allow these companies to operate within the spectrum space for 4G.

According to the Global mobile Suppliers Association, Myanmar Post and Telecommunication (MPT) standardised a 20-MHz block in the 1800-MHz spectrum band for FD-LTE use, and intends to trial the technology in 2013. It is expected that further details on the LTE technology and licences will be divulged once the licences are granted.

Yatanarpon Teleport, one of the two existing telecoms providers in Myanmar, already has access to the 4G spectrum, which it leases partially to Redlink, a local internet provider that sells customers WiMAX terminals. It is expected that the new licence holders will be able to apply to operate within the 4G spectrum space, but not immediately. Yet even with the permission, industry specialists have stated the technology available for a 4G network would be uneconomical in Myanmar, especially given the added cost for a consumer of buying a new handset. Internet fibre cable, 2G and 3G, and other modern but affordable services are expected to arrive first.

Hurdles

More than in other sectors in Myanmar, the major hurdle to progress in IT is education and training. While foreign capital can make technologies more affordable and available, the ability to effectively use and develop those technologies for the betterment of the economy remains a long-term goal for the country as a whole.

Over past decades Myanmar’s education system suffered greatly under military rulers. Anti-government protests and marches often began at universities and were frequently led by students, causing the government to fear these institutions and take measures to fragment their power. In Yangon, the country’s largest city, most university compounds are spread many kilometres away from each other to prevent large gatherings. Further, since the coup in 1962, many educated professionals capable of leaving the country did so, leaving two generations of undereducated citizens. “The most important thing is ICT education” said U Zaw Min Oo. “We are trying to introduce IT education into primary schools’ syllabuses, but there are budgetary constraints.”

The influx of private international companies is expected to help tackle this challenge head on, not least the foreign telecoms licence winners, which will be playing a delicate political and public relations game over the coming months. Telenor has pledged to hire 99% of its staff locally, and its large-scale training programmes will be set up to bring employees up to the company’s standards.

Furthermore, Cisco Systems came to Myanmar as part of a US business delegation in early 2013, pledging to establish two branded Network Academies at the Universities of Computer Studies in Yangon and Mandalay, the country’s two largest cities. The US Agency for International Development-supported programme aims to create the “world’s largest classroom”, bringing together educational institutions, non-profits, governments, and other international and local agencies to provide IT training.

Excitement

The training and education bottleneck in Myanmar is one that could stifle the more optimistic growth predictions for the sector, but even the most pessimistic of scenarios will see the country approach the digital age at a very high speed.

Mobile phone shops line almost every street in Yangon, and the excitement around new technologies is palpable. Social networking websites such as Facebook are extraordinarily popular given the relatively small number of people with internet access, with an estimated 1m local users, or almost all current internet subscribers in the country. While reliable data is as yet unavailable for Myanmar, social media analysis resources clock over 250,000 unique local Facebook “fans” of a single news web portal, or almost a quarter of all users. In August 2013 Myanmar’s first local social networking site, Squar, was launched, catering to the predominant use of internet through mobile handsets rather than desktops, and hoping to be the first localised platform for the country’s burgeoning online social scene.

Outlook

The infrastructural gaps in Myanmar’s telecoms sector are being tackled, and the signs of change are evident. Many are optimistic that IT will be the key tool in propelling the nation forward. Myanmar was once the richest country in the region, a status it now plans to reacquire. “The country has the potential to become a hub for value-added services within the IT space,” U Aung Zaw Myint, the chairman of Frontier Technology Partners, told OBG. E-governance initiatives are being developed to give a voice back to voters, banking payment systems are coming online to allow modern capital flow, content is being created, and more and more people are accessing the internet. Myanmar’s extraordinary pace of change is no better reflected than in the IT sector, and the excitement has only just begun.

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The Report: Myanmar 2014

Telecoms & IT chapter from The Report: Myanmar 2014

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