Ericsson poised for rapid telecom expansion

With the winning applicants for two new telecom licenses set to be announced next month and a second lottery of 350,000 SIM cards at K1500 apiece being held this month, the country’s weak telecom infrastructure is straining.

Mobile network supplier Ericsson, however, says it is well-prepared for a rapid expansion in Myanmar and has been studying the market and seeking customers since re-establishing its office here in June last year.

“Once the new licenses are awarded, network rollout and expansion will be done at a fast pace,” Ellen Alarilla, head of communications for Ericsson Philippines told The Myanmar Times on May 17. Ericsson is currently interviewing applicants for 50 more jobs “in anticipation of a fast start to deployments once licences are awarded”, she added.

An economic impact study Ericsson conducted last year “indicated that 90,000 jobs could be created within three years” of the licenses being granted and that two-thirds of these would be in the telecom sector, Ms Alarilla said.

Besides providing equipment for the new networks, existing ones need to be expanded due to a surge in new customers since the first lottery of K1500 SIM cards last month. The Ministry of Communications and Information Technology said Yangon, Pathein, Bago and Pyinmana regions are oversubscribed and need more base stations to handle the traffic, deputy minister U Thaung Tin said.

A total of 350,000 CDMA SIM cards were sold last month at K1500 apiece. Previously, SIM cards sold for K200,000 apiece, after falling from K500,000 apiece in April last year.

This month’s lottery for the CDMA 800MHz network is likely to increase complaints from consumers about poor access. U Thaung Tin said the ministry was worried “about creating traffic jams on the network” and as a result the third lottery, next month, will include cheap SIM cards for the GSM network.

Kyaw Haling, president and Research director of Myanmar Survey Research pointed to falling SIM card prices as the trigger for a “massive inflow” of consumers into the mobile market. The potential for expansion is even greater because the influx has been from cities while the penetration rate remains low in rural areas.

“Considering that 70pc of Myanmar’s population is rural, market potential is huge. There are millions of people without a mobile,” Kyaw Haling said.

Ms Alarilla agreed: “Within 3-5 years we will see mobile penetration reach 70-80pc.”

Marita Schimpl, head of qualitative research at MSR, said cell phone access leads to Internet access.

“Studies show huge increases in Internet penetration across Asia because people nowadays use their mobile to access the Internet. In Myanmar most people aspire to own a mobile, and in cities it has to be a smartphone.” she said.

More mobile phones will lead to higher Internet access, she added.

Ericsson is well aware of this trend. “What we have seen in Southeast Asia is that the mobile phone will be the main means to access the Internet for the majority of the population. This area has grown around 60pc year on year, and we now have more than 1.2 billion subscriptions worldwide,” Ms Alarilla said.

Ericsson’s study also indicated that “direct and indirect impacts of mobile telecoms could account for up to 7.4pc of Myanmar’s GDP within three years”.

Ms Schimpl said that there is a perception that weak mobile network infrastructure will be “sorted out by the new market players”. Slow Internet access, weak signals and frequent disconnections are the major problems, she added. – Additional reporting Vincent MacIsaac

By Htoo Aung   |   Monday 20 May 2013   |   The Myanmar Times

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VN rises as smartphone producer

HA NOI (VNS)— Japan’s prestigious economic daily Nihon Keizai on Tuesday ran an article saying that Viet Nam is becoming a leading smartphone producer in the world.

According to the article, with the Samsung Electronics Viet Nam (SEV)’s plan to produce 240 million smartphones in 2013, accounting for 20 per cent of the world market share, Viet Nam is following close to China to win the world’s number one position in this field.

In addition to bringing profits to the SEV, this plan will also help Viet Nam benefit more from the growth of the electronic industry, create more job opportunities or develop relevant infrastructure.

The article attributed the SEV’s selection of northern Viet Nam to locate its production establishments to low labour costs and convenient exports of products to important markets such as Japan, China and Taiwan.

Last year, Viet Nam exported approximately US$13 billion worth of phones and their parts, nearly doubling the previous year’s figure.

The US’s International Data Corporation (IDC) forecasts that the entire world will produce about 918 million smartphones in 2013, of which 50 per cent is made in China. — VNS

Banking sector needs to embrace IT innovation

HA NOI (VNS)— IT was becoming more and more important to the financial security and operational efficiency of banking services, State Bank of Viet Nam (SBV) Governor Nguyen Van Binh said at a banking technology conference in Ha Noi yesterday.

Many areas including payments, lending, e-banking and risk management had been equipped with new and more diversified technology, he said, adding that some services were now completely automated.

Speeding up IT application and upgrading banks’ IT infrastructure were necessary to catch up with the trend, he stressed.

According to the SBV, many weaknesses in risk and banking management were exposed last year. The banking system is currently grappling with one of the region’s highest bad debt ratios, at 8.82 per cent of total loans.

Deputy Minister of Information and Communications Nguyen Minh Hoang singled out cloud computing, mobile computing and social media as major trends that had completely transformed the way banks operate and interact with customers.

“A focus on improving bank governance and risk management practices and pushing the restructuring of under-performing banks will be the main theme for 2013,” he said.

In order to develop banking technology, the country should boost international co-operation and enhancing human resources and management, said SBV’s Banking Strategy Institute director Nguyen Thi Kim Thanh.

World Bank economist Noritaka Akamatsu said that improving insolvency and restructuring State-owned enterprises should be the main goals for the banking sector’s development.

The International Data Group, the co-organiser of the event together with the SBV, said that e-banking and mobile banking were showing great potential. — VNS

MPT to go public

State-owned Myanma Post and Telecommunication will be transformed into a private enterprise and eventually become a public company, Minister for Communications and Information Technology U Myat Hein says.

U Myat Hein told private companies in Nay Pyi Taw recently that the new entity would be called Myanmar Public Telecom. He invited the private companies to cooperate with the government in establishing the firm but did not give any timeline for when the privatisation would take.

U Myat Hein also said the Posts and Telecommunications Department will remain a government body tasked with supervising telecoms operators, collecting tax and supporting the ministry in a policy-making function.

The department’s main role will be to ensure free and fair competition among operators.

After MPT becomes a public company it will be one of four private telecommunications providers in the country, along with Yatanarpon Teleport and two other as yet undetermined operators.

The winning bidders for the final two telecoms licences will be announced in the last week of June. U Myat Hein said the building and installing of telecommunications infrastructure required to support the four operators is expected to be finished in eight to 12 months.

The Telecommunication Operation Tender Evaluation and Selection Committee announced on April 11 that 12 consortiums had been shortlisted for the two licences. These include some of the world’s best-known telecoms operators, such as Airtel, Axiata, Viettel, Sumitomo, KDDI, Singtel, China Mobile, Telenor and Vodafone.

Late last month, new SIM cards priced at K1500 hit the market, with about 350,000 being distributed nationwide. They were distributed via a lottery system through township and ward offices. Many of these SIM cards were quickly resold at far higher prices.

The government has said it is distributing the SIM cards in monthly batches to avoid overwhelming the telecom infrastructure. The cell-phone penetration rate in Myanmar remains among the lowest in the region.

 

Electronic payments company Wing set to transfer a billion dollars this year

CEO wants to shift cash to mobile and internet

What started out as an idea by ANZ Bank to help low income Cambodians transfer money easily to the provinces has grown into a profitable business with a young CEO who sees a coming sea change in how people pay for things in Cambodia.

Anthony Perkins, 36, who joined Wing in 2008, said last week if growth rates continue at current levels, Wing will process more than a billion dollars this year.

Perkins said that starting in June 2011, Wing’s domestic remittance product has “caught fire” and has been growing at 25 to 30 per cent per month. In March, Wing processed $75 million in transactions.

Perkins attributes Wing’s success to the quality and visibility of the network which has 900 Wing Cash Xpress locations which enable people to use their cell phones to transfer money and collect cash from anywhere to anywhere in Cambodia, along with 7,000 Wing phone top up dealers nationwide.

“Our remittance product is uniform and nationwide,” he said.

What helped Wing really take off was advertising.

“We advertised the fact that you could get money from A to B for a cost between $0.50 and $1.50 and move any amount, no matter how far. Other providers have complicated pricing structures,” he said.

Competing money transfer services include microfinance institutions (MFIs), banks and informal methods.

Perkins said mobile phone top-ups capability really helped Wing take off in mid-2009.

“Log into a Wing account and you’re topped up immediately with any mobile operator. That was the first product that kicked off.”

The first mobile operator Wing signed up was Hello in January 2009, but gradually all the other operators have been added.

“The last one to go live was Cellcard in January this year,” Perkins said. “That was the last significant piece of the telco jigsaw.”

The next big adventure for Wing is taking the network of 7,000 Point of Sale terminals around Cambodia, normally used for mobile phone top-ups, and integrating those into Wing’s system so people can use their Wing cards and mobile phones to easily pay for things everywhere.

The system will enable people to make payments with any phone or Wing ATM card using “near field communications” (NFC) technology.

“We’ve got 7,000 dealers who print phone top up and we are in the process of putting those two networks together,” Perkins said. “The benefit is we got an ATM card and the largest point of sale (POS) terminal network in the country by far. This makes retail payments very easy. You’ll be able to walk into a supermarket or mini-mart for example and pay with your Wing card or your phone.”

Perkins said Samsung’s smart phones have NFC technology already built in, creating a large existing retail customer base. He said 1,000 of the 7,000 POS terminals around Cambodia are already NFC capable.

Retail outlets including Score Bar in BKK1 are already testing the NFC technology, Perkins said.

Perkins says another big future growth area is online payments.

Wing, which has 160 employees, is now developing an online payment system similar to PayPal. Perkins says the system, now in a trial phase, uses an “application programming interface” or API.

Perkins says Wing is also connecting their service with Visa so that Wing cards will also become Visa cards in the future, “Coming in July you’ll be able to do Visa transactions and the great thing is this opens up international remittance. By tying up with Visa, it means any Visa card holder can send money to any other Visa card holder.”

Perkins says people can store money in Wing accounts and while they don’t get interest payments like banks give, there is a zero minimum balance and there are zero monthly fees.

“We don’t charge account keeping fees. If you just want to put your money in there and keep it safe, there’s no charge for that.”

The big picture for Perkins as Wing CEO is to replace cash movements with electronic.

“We do a lot of payroll and we’re starting to do business to business transactions,” he said. “For me the key thing for Wing is basically to replace cash. Wherever there is cash we want to replace it with electronic. The speed of it gives you the ability to move money from one place to another securely and instantly, whether you have to send money to help family with weddings, funerals or anything like that,” he said.

Perkins said opening a Wing account is easy, costs 10,000 riel ($2.50) and is free for Cellcard customers during the month of May.

Wing cards can be used to take out cash at ANZ Royal ATMs in Cambodia.

Originally started by ANZ Bank as way to help Cambodians inexpensively move money, Wing today is owned by Wing Singapore Holdings Group.

One of the original donors to help get Wing started in rural areas was AUSaid/ECF.

Perkins said AusAID officials at a recent conference in Canberra were astonished to learn that Wing had become profitable so soon, in a world where the majority of mobile money companies around the world have struggled to succeed despite heavy investment.

“They nearly fell off their seats,” he laughed.

Perkins encourages aid agencies to use Wing services to get cash where it is needed.

He said mobile money is widely used around the globe as a means to distribute aid money.

“If large aid agencies can do it in Africa, they can do it in Cambodia, We’re ready” he said.

Perkins also responded to a request from Google to help them with advice on how to get mobile money up and running quickly to distribute financial aid following the earthquake disaster in Haiti in 2010.

Wing helps prevent skimming in places like garment factories, Perkins said, by enabling the payments directly to the employees. Perkins said the average Wing transfer is about $70 and the current maximum is $2,000.

Wing headquarters is located at No. 30, Street 432 and their website is www.wingmoney.com

By Stuart Alan Becker│10 May 2013│The Phnom Penh Post

Smart moves to number 2

Now with more than five million customers, the merger of Smart and Hello has positioned the mobile operator in the number two spot in Cambodia’s telecommunications market – but the new goal is to be number one according to Smart CEO Thomas Hundt.

“One day we want to become the number one mobile operator in Cambodia. We are number two, so if we don’t set the target now, when would we?” Hundt said in an interview Tuesday.

The merger puts Smart still behind Metfone which has an estimated seven million subscribers and ahead of Cellcard which has nearly four million subscribers.

Hundt and his team had been distressed two weeks ago when the government announced Prakas 232 which sought to prevent Smart-to-Smart phone call rates at less than 4.5 cents per minute.

Speaking in his office Tuesday, in the aftermath of the announcement by the Ministry of Posts and Telecommunications (MPTC) to abandon the enforcement of the Prakas, Hundt said he was happy with the decision.

“We welcome the decision by the MPTC to suspend the implementation and enforcement of the regulation that would have prohibited the promotions that we have had in the past. We understand that these announcements mean that the minimum price floor is de facto abandoned,” he said.

It had been a tense two weeks as the MPTC Prakas caused discomfort at Smart as the telecommunications company began to accelerate a range of post-merger systems integration projects.

Hundt expressed his gratitude and relief that Smart had been enabled by the MPTC to continue to offer low-cost service between Smart customers.

“We are happy being able again to offer the tariffs that are most affordable and attractive to our consumers and we would like to express our sincerest thanks to our customers for their continued support during that time,” Hundt said.

“We are in favour of a free-market economy, and we are here to serve the people of Cambodia, and we are aiming to offer the most affordable telecom services,” he said.

Hundt, who spend his childhood years in the former East Germany, has brought a set of standards of attitude and work ethic with him to the Cambodian telecom scene.

“I’m a pretty accurate and demanding person, and this is spreading into the organisation. In our business, likewise in all things, there is no such thing as fast enough. We are in a very dynamic industry and situations can change within hours and we need to be able to react on that. Now we are not a small organisation anymore. We are a pretty big company,” he said.

On December 19, 2012 Hundt and Simon Perkins of Hello announced a strategic merger of Smart Mobile and Hello Axiata, which became part of the Axiata group.

By February 22 this year, the new Smart brand was introduced, using the Smart logo with the Axiata prism above it.

In the deal, the shareholders of Smart Mobile sold their shares to Axiata, Hundt said. Despite the logo changes and the integration of the two systems, he looks at it as the same game, with the new shareholders having the same set of expectations.

“What matters is that the ambitions and the expectations have not changed. We still work for our shareholders and stakeholders including and in particular our customers, and we want to grow by enlarging our market share.”

“Now the two companies have been operationally and functionally merged and are one company. The product offerings are largely harmonised already and the networks are in the process of being harmonised,” he said.

Any old Smart Mobile or Hello SIM cards or scratch cards may continue to be used, he said.

“The clear commitment is they will be available continuously at any time and they can be used to top up any of the Smart numbers, so it is not limited to your former Hello or Smart Mobile number.”

Smart has a process now under way to harmonise and extend the two radio networks “and a massive rollout of further capacity and coverage in both 2G and 3G,” he said.

At the time of the merger Smart had more than three million and Hello had just under two million customers.

The radio transmitting devices of both Smart Mobile and Hello had come from the same supplier and were generally compatible, Hundt said.

Both the Smart and Hello base stations, which are located on the transmitting towers, had their own core networks connecting all the base stations and towers.

Those are now in the process of being combined into a single network.

The billing system and Value Added Services are in the process of being merged into a single entity as well.

Smart now has about 750 employees.

“The cultures of the two companies were not that largely different from each other,” Hundt said of the post-merger environment. “Both companies were performance oriented, with integrity as one of the big values, along with team play, teamwork and open communication”.

Hundt said the core values of Axiata as a performance oriented environment and Smart Mobile culture as a dynamic, energetic and largely youthful environment was evolving into a homogeneous team, based on achievements.

“The way the people are working together and enjoying their time together is remarkable in terms of their team play. They are more than just colleagues.The vast majority are Cambodians and they behave with friendliness and openness. In a company this results in not just collegial relationship. Respect plays a big part in this.”

He said the new Smart organisation was driven to efficiency and quality and was above average in Cambodia.

“There is evidence for this in the appearance of our brand, the brand in context, in our shop and our website. These things are superior to those of our peers,” he said.

Hundt said he’s optimistic about Cambodia’s future.

“During my five years here, Cambodia has changed tremendously,” he said. “The development has changed not only in urban centres, but in rural areas, with new paved roads, electricity and upgraded school systems. Phnom Penh is becoming a bustling metropolis. The situation is definitely improving and more and more people are benefiting from the development; there are still challenges but the direction is improving.”

He says the post-merger activities have made tremendous progress in systems integration.

“We are creating a combined spirit and value and we are well engaged on it,” he said. “We cover all 24 provinces with 2G and 3.75G. We have 95 per cent of population coverage and we will cover 98 per cent in next couple of months.”

Hundt said about 37 per cent of phones sold in Cambodia were smart phones and the figure was 50 per cent worldwide.

“You can get smart phones now for less than $100 and people are using them to connect to the internet.”

“For the vast majority of people, the mobile phone is the primary device to go into the internet. We see tablets and increasing numbers of people with two devices, both connected to the internet over mobile. There is exponentially growing data consumption right now and that won’t change.

“The challenge of all the industry players is to cope with that demand. On this point Smart is investing massively in its data network with 4G LTE probably coming,” he said.

Hundt serves as a board member in Eurocham, as vice president of the German Business Club, is an AIESEC partner and supporter and a supporter of Junior Chamber International.

By Stuart Alan Becker│10 May 2013│The Phnom Penh Post

Largest ISP expects to double data growth

Cambodia’s largest internet service provider, with 180 employees and 8,500 kilometres of fibre nationwide, intends to become a regional player, eventually connecting to Myanmar.

Ezecom group CEO Paul Blanche-Horgan says he intends to get a submarine cable during the next two years to expand Cambodia’s internet data capacity.

“My intention is to get a submarine cable in here because of data and hand held devices – it is all back haul and international connectivity” he said.

He said this year Cambodia’s data load would double and would triple in 2014.

Blanche-Horgan says Ezecom will turn into a regional player for Indochina and Thailand “and we hopefully will be connecting to Myanmar,” he said.

“We have agreements with some of the major operators in this region for transit for traffic from Thailand to Hong Kong, Singapore and vice versa. We are expanding our fibre network in Cambodia by another 2,000 kilometres,” he said.

“I do believe that Cambodia data services are certainly are as good as any other services in the region.”

The major mobile operators in Cambodia are Ezecom’s customers.

“All the operators we supply are growing at the same sort of rate, which is expanding all the time and that is due to devices becoming cheaper, as well as dependence on internet.”

Blanche-Horgan first arrived in Cambodia as country manager for Australian telecom company Telstra.

Staying on in Cambodia, he became the first to introduce DSL into the market place in 1999, the first serious broadband services in Cambodia.

Ezecom was started five years ago and a key component has been the construction of an underground fibre network. Relatively small and light weight, fibre is capable of carrying vast amounts of data.

While primarily a backbone provider to other carriers, Ezecom also has retail and business packages starting at $39 per month for home fibre.

“Most of our retail customers are in the $80 or $90 per month range,” he said.

Blanche-Horgan said Ezecom made the decision to be a wholesale internet service provider more than four years ago.

“There are so many players trying to take market share, which is the same in the mobile market,” he said. “We are wholesale but we also have a retail customer base. Some of our corporate customers can have from 100 to 200 megabytes.”

As far as developments in the regulatory sector, Blanche-Horgan welcomed the presence of the Ministry of Posts and Telecommunications’ new regulator.

“It is a good thing that MPTC has a regulator now because in the past we didn’t have one. They will hopefully steer the industry for the best for Cambodia rather than individual short term gain.”

A key to Ezecom’s success, he said, was investing everything they’ve made back into the network.

“We’ve invested a lot of money back into our network and we are opening two new offices, one at the Thai border in Poi Pet and one at the Vietnam border in Bavet,” he said.

Ezecom, which employs 180 people, is experiencing rapid growth in Cambodia’s provinces.

“We are seeing the provincial market is becoming more and more important. We also back haul for mobile operators, and they are expanding out to the provinces,” he said.

People can go to the company’s website at http://www.ezecom.com.kh, click on “traffic cameras” and monitor live traffic situations around the city.

“You can look on our website and find out what’s going on.”

The traffic cameras are one of many community services provided by Ezecom. Another is an ongoing commitment to education.

“The Ministry of Education picks the schools and the connection goes back to the ministry,” Blanche-Horgan said.

“The idea is for e-learning, and there’s a shortage of teachers, and we think it certainly helps.”

He said he would like to go to major donors and connect five hundred Cambodian schools in the next two years.

“We’ve got fibre everywhere, and in some ways we’re ahead of other countries in the region. We will be doing something with the major agencies in the next month or two, to show them what we’ve done and ask them if they want to help.”

Blanche-Horgan said it didn’t cost much to connect schools with 1.5 to two megabytes, and the return on education for young Cambodians was well worth it.

Ezecom will be looking for donors of equipment in the coming months to support education programs aimed at equipping and training teachers for an initial 50 schools.

“We really need partners,” said Ezecom’s Marketing Manager Inge Olde Rikkert. “It is so large already and we can’t fund it all alone.”

Ezecom is a shareholder in the Kuala Lumpur based American Asian Gateway, which moves internet traffic, throughout the world.

“Our idea when we started five years ago was that owning your own network was the way to go,” he said.

By Stuart Alan Becker│10 May 2013│The Phnom Penh Post