Myanmar: Internet conundrum

Having kept a tight lid on access to information for many years, Myanmar is now opening its doors to new technologies, bringing a tidal wave of social empowerment. However, quality control both in terms of technology and content is likely to be the main challenge going forward.

According to the World Bank, Myanmar citizens have the second-worst access to internet in the world; the internet penetration rate is 1%. Unlike some other large infrastructure requirements, information and communications technology (ICT) requires little initial capital and yet its effects can spread at an astonishing speed, with overwhelming effects on other industries.

To this end, the Ministry of Communications and Information Technology (MCIT) has plans to auction two licences in 2013 that will allow international firms to enter the internet service provider (ISP) market. However, they will first be subject to the draft telecoms law, which is expected to be released in the coming months.

ADSL is currently available to customers, though speeds have been throttled due to congestion. Fibre-to-the-home connections have also been made available, though costs are somewhat prohibitive. Installation is free for the first 300 metres of fibre cabling and $1 per metre thereafter. Once installed, the service costs consumers about $50 per month. As international players enter the market, however, these prices will drop considerably.

“In the next few years, the most profitable business in Myanmar will be the telecommunications industry," Eric Schmidt, executive chairman of Google, said in a speech in Yangon on March 22, the same week Google rolled out its Myanmar search portal. Google now supports seven local languages in the country: Burmese, Mon, Karen, Kayah, Pali, Rumai Palaung and Shan.

Joining Google was a number of other US businesses, including Cisco Systems, which is due to establish its Networking Academy at the University of Computer Studies in both Yangon and Mandalay, the two largest cities. The new academies will form part of a programme, supported by the US Agency for International Development, which aims to create the “world’s largest classroom”, bringing together educational institutions, non-profit organisations, governments and other international and local agencies to provide ICT training.

Some local businesses have been preparing for the entrance of large international firms, and smaller ICT services companies are beginning to emerge with locally focused products. “People did not appreciate the back-end processes involved with web development,” said Wai Phyo Thu, executive director of Creative Web Studio (CWS), a local firm that offers several online products, including EasyPay, a PayPal equivalent for Myanmar. “This year people are beginning to come round a lot more to the idea of doing business on a website, but infrastructure is still badly needed,” he added.

CWS’s joint venture partner for EasyPay is Yadanabon Teleport, the state-run ISP. Thu believes that by positioning CWS with strong partners in the months to come, the firm will be first to benefit from the influx of online consumer product gateways as companies move to online payments.

However, increased connectivity brings with it very real dangers for Myanmar and the government. Recent violent unrest between Muslim and Buddhist groups across the country were said to be inflamed by photos and rhetoric spread through the internet.

“We are entering a dangerous period for the internet in Myanmar,” Schmidt reported on his blog. “What happens when a religious group falsely claims damages from others? Will the Army be sent in? The country cannot even agree on a press freedoms law for the newspapers, and freedom of political speech is a one-year old concept.”

His words perhaps echo the government’s fears in opening up the information gateways. The ongoing information and technological reforms will enable citizens to share information and opinions on a much larger platform, which will have benefits and drawbacks, as any emerging economy is aware. Until effective regulation and laws can be enforced, information can be a volatile tool. Despite these concerns, however, new technologies should enable local and international firms to enter an era of commerce and business on a scale not previously seen in the country.