Myanmar 2 years on: Overseas banking and the telecom revolution

Myanmar is in a constant state of change. Even some of the long-neglected colonial architecture has become a part of the alterations associated with the rising tide of reforms. (click to see what this building looked like 2 years ago)

When I first visited Myanmar in 2011, power cuts were frequent, ATMs were exasperatingly inaccessible for customers of non-domestic banks (forcing visitors to budget their entire trip ahead of time!) and SIM cards were, quite insanely, around the 500-dollar mark. At the time, Hillary Clinton was scheduled to arrive in the next two weeks, tasked on a touch and feel mission ahead of President Obama’s historic visit, and with that, heightened anticipation of Myanmar’s global reintegration.

Today the expectations of 2011 have emerged in their rawest force. The country’s parliament, it is now said, have every law open to revision. While Myanmar’s political, energy, banking and telecommunications problems are still not without frustrations, they have become attenuated by the rush of reforms, which are occurring at such a pace that attempting to gauge change in this frontier land is like aiming at a moving target.

Myanmar’s first pre-paid debit card

Still, after passing the first 10 days in Yangon, I feel compelled to at least begin taking some pop shots. Now that the capricious winds of chance have swept me back to Myanmar, and after making a final decision to make this my new home base, I cannot help but feel that these gusts have coincided with a stroke of serendipity. Within my first two weeks back to Myanmar, I have become one of the first 100 domestic banking customers to sign up for the country’s first overseas pre-paid debit card. The issuance of the MasterCard-linked CB Bank card is a monumental moment for Myanmar, allowing customers to access domestic banks for foreign purchases, a greatly overlooked ability that could only be imagined during the days of heavily saddled economic sanctions.

The Central Bank of Myanmar has allowed CB Bank to issue up to 5,000 cards, which will be made widely available starting in November. At the moment, customers will be given a limit of $3,000 to load the cards with, but can apply for additional cards if further personal information is provided. These cards will allow those residing  in Myanmar — who still cannot make foreign remittances from domestic banks or even Wester Union — to begin making non-business payments for overseas services, such as air tickets, hotels, restaurants, etc. CB Bank has said that they have deployed people in select countries around the world to test the cards, coming back with positive results.

The property price scare: Not a dead end for entrants 

Among the greatest deterrences to foreigners looking to set up camp on this edge-of-the-map area of Asia are skyrocketing property prices and the cost of SIM cards, both made outrageously unaffordable for locals as a result of inadequate supply. However, while prime property has indeed been soaring, partially due to the few units available and the repatriation of overseas money help by cronies, many apartments in Yangon can be found for reasonable prices. Unfurnished or partially furnished two-floor, two- to three-bedroom units in downtown Yangon are available for monthly rentals of between $400 to $700 per room to start.

But there is a caveat. Most of these properties have been shamefully neglected, have no installed air-con and come without an internet connection, which costs about $800 to set up. (At the moment, I am living in my office until I find a place — which will likely be a shared unit, as this is the most cost-effective solution.) Vacancies in shared units are in short supply in Yangon, but if time is on your side, spacious and livable rooms can be found starting at $400.

SIM cards: Getting connected

Many foreigners are also reluctant to join the Myanmar vanguard because of the country’s lack of telecommunications. Myanmar is in a pre-IT era, where a complete lack of infrastructure set SIM card market prices at over $3,000 some 10 years ago. English teachers working in the country today often still revert to pre-scheduled meet ups, a routine many did away with in the late 90’s when mobile phones become widely available to most developed nations. Likewise, businesses that hope to set up dependable lines of communication with their employees must pay the price to equip them, which, at $150 today, costs 150 percent of the average Yangon worker’s salary. (In my company, local salaries range from $80 to $300/month, with the mean being $100.)

Still, $150 for a SIM from Myanmar Post and Telecommunications (MPT), the country’s largest and only telecom provider, is the result of greater infrastructural stability. Just last year, SIM cards were going for around $220, and next year, when Qatar’s Ooredoo and Sweden’s Telenor, the two winners of the country’s first round of telecom licenses, begin their operations, SIM cards could become widely available for $2.

In reality, MPT SIM cards were already purchasable for just less than $2, but only by lottery. Ending in June, the Myanmar government used to set up public raffles for SIM cards. But it is reported that many of these winners would sell off their prize for around $100 on the ubiquitous grey market, which would then be retailed for between $120 and $150. (SIM cards can be found outside of Yangon for much cheaper prices, but this requires some local know-how and tireless scouting.)

As of recent, a consortium lead by Taiwan’s Chunghua Telecom has entered talks to get the next license to build what has been called the world’s last great greenfield telecom market. Moreover, the Myanmar government also announced in the past week that there will be more than the originally designated four licenses issued to develop telecoms.

There is a sense that what may come will be more surprising than expected. In the past year, the lifting of a ban on automobile imports has led to a two-fold increase of cars on the road of Yangon, chocking the city like never before. If Ooredoo, now working alongside its former bidding competitor Telenor, reaches its goalpost of 80-percent mobile penetration by 2016, local disposable income will be drained into new high-tech devices, likely to come from South Korea or Taiwan. A total leapfrog in broad-based access to global media and communications is not known in Myanmar today, but certainly visible somewhere along the horizon.

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