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Investment will sustain mobile growth in Myanmar – Baker McKenzie

Investment will sustain mobile growth in Myanmar – Baker McKenzie

Myanmar’s strong mobile growth could be stymied by a dearth of government resources, according to law firm Baker McKenzie’s forecasts.

The Southeast Asian country lacks developed national infrastructure in many areas, but its mobile telecoms sector has soared. Statistics from The Economist Intelligence Unit show that Myanmar saw its economy grow by around 7.5% annually between 2012 and 2017, with the telecoms sector contributing significantly to this.

Before it began a series of reforms to the sector in 2012, Myanmar was among the world’s least connected countries. Internet connectivity was very low and active mobile users could be measured in the thousands, but following a reversal of fortunes that Baker McKenzie described as happening “virtually overnight”, there are now over 50 million active SIM cards in the market, and mobile data speeds are some of the highest in the region.

In 2014, the operators Telenor and Ooredoo began offering services in the market which drove up both subscriber numbers and data speeds. Wireless coverage mapping firm OpenSignal pegged the average download speed for 3G networks in Myanmar at 4.79Mb/s – notably higher than other Southeast Asian countries, where speeds were frequently below 3.5Mb/s.

According to GSMA Intelligence, in Q3 Myanmar’s SIM penetration stood at around 69%. State-owned operator MPT leads the market with around 23 million connections, with Telenor Myanmar taking second place (19.2 million) and Ooredoo Myanmar in third (7.7 million).

While Baker McKenzie predicted that Myanmar’s economy would grow at a rate of 7.3% annually to 2022, it cautioned that the country’s government alone would not be able to deliver the requisite investment in infrastructure to maintain this momentum. Investment from financial institutions and the private sector would also be required to keep growth steady.

Andrew Staples, director of The Economist Corporate Network, Southeast Asia, and co-author of the report, said: “Improved infrastructure is perhaps the most important requirement for the continuation of Myanmar’s positive economic trajectory”, but noted the country’s “huge potential” despite “considerable challenges”.