Singapore Telecommunications, Southeast Asia’s biggest phone company, wants to focus on wireless services in Myanmar as it vies for the right to operate in one of the world’s last untapped mobile markets.
SingTel sent in its expression of interest for a phone license in the nation last month and is awaiting further details on the bidding process and terms of the permit, Chief Executive Officer Chua Sock Koong said in a Bloomberg Television interview with Haslinda Amin yesterday.
“Looking at the experience in other emerging markets, the mobile solution appears to be a more cost effective, a faster solution to provide communications infrastructure to the masses, particularly in the rural areas, very quickly,” she said. “While the market potential is very attractive, we would need to understand what the terms of the license issuance would be.”
SingTel, which owns stakes in the biggest mobile-phone companies in Asian emerging markets including Thailand, Indonesia and India, is seeking a foothold in a nation where only 9% of the country’s 64 million people have handsets. The nation’s fixed-line penetration rate is about 1%, the government said last month.
The nation wants to boost telecommunications coverage to as much as 80% of the country by 2016, the government said last month. That’s up from 5.44 million mobile-phone subscribers as of December. In SingTel’s home base in Singapore, there are more subscriptions than people.
SingTel said it will jointly bid with Myanmar partners.
“The growth is going to be quite exponential, looking at how Asians use mobile phones,” said Carey Wong, a Singapore- based analyst at OCBC Investment Research. “The challenge is consumer education. Initial sales won’t be great but once it takes off, it’s a developing market for them.”
Still, SingTel faces competition for the two Myanmar licenses the government plans to award by June. Malaysia’s Axiata Group Bhd., Singapore’s ST Telemedia and Norway’s Telenor ASA were among phone operators that indicated their interest in the licenses.
For mobile operators, developing a network in Myanmar would require “almost building from scratch” with base stations and other infrastructure, said Sachin Gupta, a Singapore-based senior analyst at Nomura Holdings Inc. Gupta’s team was ranked first for telecommunications research in Asia by Institutional Investor last year.