Myanmar: The New Hotbed for Satellite
After a turbulent recent past, Myanmar is emerging as an exciting and dynamic economy. Decades of military rule has left the country with run-down general infrastructure and a population that has gone through years of oppression, hungry for knowledge of the outside world. Today, Myanmar is demanding connectivity and information — and satellite is playing a crucial role in providing these services.
The stunning landscape of Myanmar hides a tempestuous past that features its struggle for independence and eventual democracy. In 2010, the country sat on the cusp of massive change when the military junta handed over power. After 48 years of oppressive rule, a metamorphosis is occurring across the country.
The daily lives of Myanmar’s 51.4 million-strong population are changing. Through the process of liberalization, there has come opportunity and economic development. Today, access to information once forbidden is becoming freer. International news websites and popular sites such as YouTube are now available to the general population. This is fueling demand for access to Information and Communications Technology (ICTs) as individuals and enterprises alike literally make up for lost time. Myanmar is realizing what it has been missing out on. The digital revolution is sweeping the land and, as a result, the telecoms market in Myanmar is entering a boom. New tech start-ups are attracting significant international investment and Myanmar, as the final underdeveloped telecoms market in Asia, is a land of opportunity with much potential for growth.
The Mobile Phone and Myanmar
By far the most significant technological phenomenon that has occurred across Myanmar over the past five years has been the rise in the ownership of the mobile phone. A similar thing has happened in countries across Africa where ownership has skyrocketed. According to LIRNEasia’s National Baseline Survey from March 2015, 40 percent of the Myanmar population aged 15 to 65 owned a mobile phone, and an additional 41 percent had plans to get connected in the future. Smartphones are regarded as a status symbol, and of those surveyed at the time for the report, approximately a third had used their phone to access a data application. With a quarter of the population of Myanmar living in poverty, this access to mobile connectivity has the power to change lives in a plethora of different ways: through mobile banking, access to education, e-health, and governmental services to name just a few.
The opening up of the telecoms market and the expansion of 2G and 3G networks has been a catalyst for the mobile phone. According to the Oxford Business Report: Myanmar 2017, the telecom sector in the country is the “biggest economic success since the military ceded power in 2011.” The expansion in network coverage has helped empower local businesses and connect remote villages.
In 2013, 91 international mobile operators bid for two licenses. Ooredoo and Telenor both won and entered the market. They have been very successful, and Telenor is currently running 4G trials. By 2016, there were four mobile operators in Myanmar, including the Myanmar Posts and Telecommunications (MPT) striving to deliver more extensive services to a population starved of connectivity, especially data. Due to the popularity of mobile broadband demand, fixed-line broadband penetration is way behind at less than 1 percent. The appetite for mobile broadband means that operators are not willing to invest in fixed line infrastructure. So, the primary means of access to broadband for the majority of consumers is through a mobile handset.
“The telecoms market has come a long way since the issuance of the MNO licenses to Telenor, Ooredoo, and of course MPT, who is partnering with KDDI to run their mobile network,” explains Daniel Michener, chief executive officer of Burst Myanmar. “However, broadband as strictly defined has lagged and will continue to lag until metro fiber, domestic backhaul and international IP transit capacity have improved. Most ‘broadband’ will be delivered over 4G with hand phones being the primary end user device.”
The Satellite Opportunity
Though the demand for mobile broadband in Myanmar is obvious, there are some critical challenges that mobile operators face. Cellular tower installation is very difficult due to a neglected road infrastructure, unclear land rights, adverse weather such as heavy monsoon rains, an unreliable power network and sheer difficulty in getting to hard-to-reach areas due to diverse terrain. Therefore, there is a clear opportunity for international satellite operators to engage in the country and begin delivery of connectivity to fill the significant gaps in communications.
Broadband connectivity is also highly sought after by enterprises that can reap the opportunities high speed internet can bring to their businesses. With fixed-line penetration so low, satellite is going to be integral as a broadband enabler via Very Small Aperture Terminal (VSAT) networks. “Broadband services are not widely available due to lack of international capacity, a lack of international gateway facilities, reliable domestic networks and the unwillingness of some potential customers to pay the price of reliable capacity,” says Michener.
The government of Myanmar is committed to the eventual achievement of a digitally inclusive society, as Matthew Oh, senior sales director at SES Asia-Pacific says: “The new government values the need to bring affordable telecommunications throughout the country to support social and economic developments in Myanmar, and definitely views satellite services as an important, fast and cost effective way in improving the standard of living for the people of Myanmar.”
As an international satellite operator, SES views Myanmar as a great potential, and has extensive capacity to cater to the country’s increasing requirements. “SES has ample satellite capacity and is well positioned to meet the exponential connectivity demands of a nation who wants to be online 24/7,” continues Oh.
SES will launch a hybrid Geosynchronous Earth Orbit (GEO) satellite, SES 12, in 2017 that will bring more high throughput capacity to the region. The effect of High-Throughout Satellites (HTS) could be particularly significant to a country like Myanmar where many live below the poverty line. “HTS capacity will enhance price competitiveness and make satellite communications more cost effective to telcos, enterprise and consumers,” concludes Oh.
Satellite operator and service provider Hughes has been involved in the country since 2015, when the Myanmar-based KBZ Group of Companies selected its Jupiter system for a high-availability satellite broadband network operating on C- and Ku-band.
The operator was initially expecting the entrance into the market to be quite challenging, but the government has moved quickly to make it easier for international operators.
“We initially envisioned that entering the Myanmar market would be challenging, given the lack of policy and licensing framework, but were pleasantly surprised by the government’s significant and rapid progress in defining a policy framework for VSAT licensing,” Dharmendra Singh, regional director, Asia Pacific for Hughes Network Systems, explains.
However, Singh also stresses that operators have to play their part in educating the market to the importance of VSAT as a solution. “Given the history of VSAT in the market, and its reputation as a high-cost, low-volume solution, Hughes has worked hard to make the market aware of how VSATs are used globally to enable networks with reasonable margins and high volumes that enable them to be more affordable,” he says.
Hughes sees solid demand for satellite, especially VSAT systems, in the coming years specifically in the banking and finance sectors, including connectivity for ATMs and remote branches, as well as cellular backhaul, for extending 3G and 4G to areas beyond the reach of terrestrial infrastructure. Additionally, Hughes envisages opportunities for extending education, healthcare and internet access to rural communities through government-sponsored initiatives.
“A significant number of VSAT licenses have been made available, but [are] primarily limited to opening the market to investors and local players,” says Singh. “The government’s push for subsidy-based initiatives to promote rural connectivity for inclusive growth is still to be seen. Encouragingly, however, the government is looking at utilizing United Service Organization (USO) funds for rural connectivity growth, and we hope to see government-supported project for social and economic development in near future.”
The government has already taken significant steps forward in terms of leveraging satellite. In mid-2016, it signed an agreement with Intelsat for C- and Ku-band capacity on the company’s 902 and 906 satellites. This broadens Myanmar’s wireless network, enabling provision of more affordable communications to local communities through cellular backhaul and VSAT services.
The government of Myanmar perhaps has the advantage of being a latecomer to the communications market as a whole, and can take note from the past experiences of other countries in the region. However, as Michener explains, there is still a lot to learn. “They just need help and guidance to figure out how to do this … they lack experience. The International Gateway (IGW) regulations that are ongoing now are a good example of this conundrum. They opened the application process without knowing the specs required or the Quality of Service (QoS) requirements. They have to rely on vendors, which obviously guides toward their solution,” he says.
Deregulation, New Competition
Deregulation in Myanmar has led to an increase in new telecommunications operators who see the opportunity to connect both people and businesses. One of those is Burst Myanmar, a broadband and data center services provider that will build the country’s first Tier 4 data center in the Thilawa Special Economic Zone (SEZ) located just outside Yangon.
Burst is completely focused on building an internet exchange and teleport that accommodates everyone. To this end, the company is carrier-neutral. Once the facility is commissioned, Burst will have the ability to terminate and host third-party cable termination and satellite facilities and direct IP transit from Myanmar Posts and Telecommunications (MPT) and Campana Group that will make the Burst Connectivity Hub the most connected facility in the country.
“We have designed a Wi-Fi mesh network concept that is based on a VSAT remote solution in rural Myanmar so that we can provide an access network to our customers — for example, mobile money providers — and provide access in rural Myanmar to help reduce the digital divide,” says Michener.
For Burst, the satellite portion of the company is a complement to its primary business of becoming the country’s first and only internet exchange and the vision of the company is to be as future-proof as possible. The satellite part of the business is crucial and will be important should Myanmar eventually build and launch its own space assets.
“Our secret sauce, if you will, as it relates to our satellite strategy is threefold: Firstly, to support the delivery of third-party services to rural Myanmar and to address the digital divide; secondly, to ensure carrier neutrality in fiber and satellite facilities so that we are seen as an enabler of connectivity in the country; and thirdly, to position ourselves to become a major player in Myanmar’s attempts to launch and operate satellite services on the Ministry of Transport and Communications (MOTC) national satellite, currently a condo-sat with Intelsat, but eventually their own satellite,” Michener continues.
Satellite’s Future in Myanmar
It might sound corny, but the future for satellite in Myanmar really is bright. There is an immediate need to fill the communications gap in terms of mobile and enterprise networks and, whilst work is completed on the terrestrial infrastructure, satellite will in many cases be the go-to solution for ready and reliable connectivity.
“Satellite services will flourish in Myanmar in the coming years,” remarks Oh. “The lack of a well-connected terrestrial infrastructure today means that it will take more than three to four years before the networks are ready for service. And even when they are ready, there will always be difficult terrains of Myanmar where it is not cost-effective to roll out cable or fiber networks.”
There are, however, challenges that lie ahead for satellite operators and service providers in the region. One of the main hurdles will be the cost of services. A quarter of the population live below the national poverty line and companies across the country are not used to paying the price required to support these facilities, especially bandwidth costs.
That said, the people of Myanmar have had their first real taste of connectivity and are sure to want more. Oh believes that the rollout of terrestrial connectivity will only result in more demand. “Connectivity is a sort of addiction. At first you are happy you can make phone calls, then you start wanting to go online. And then you start demanding for faster connectivity speed and more bandwidth because you want to be able to stream video, upload photos and game online. All these would only be possible with satellites playing a key role in developing Myanmar’s infrastructure in the coming years,” he says. VS