06 Oct Telecom and Automobiles have big growth potential
The telecommunications sectors provides opportunities for future growth with 114% of the population (60.4 million) having mobile phones but only 39% (15 million) with subscription, and only 39% (15 million) using the internet. Social media usage too is yet to take off: the country is a mobile-first market set to leapfrog from a telephone penetration of only 7% in 2012. The local telecommunication market, though growing by 15%, is highly competitive. There are over 140 licensed internet providers struggling to secure market share, and therefore driving profit margins down. Amongst them are three foreign providers, namely Telenor Myanmar from Norway and Ooredoo from Qatar, both entering the market in 2014. Most recently in 2018, Vietnam’s MyTel – a joint venture between the Vietnamese Viettel and the Myanmar Economic Corporation – became the third foreign operator. These three operators invested a combined amount of US$ 3 BN in infrastructure projects.
Assembling cars in Myanmar is becoming increasingly important, since the government has high import tariffs to stimulate local manufacturing. Ford, Suzuki, Nissan, Hyundai and Kia already have assembly lines in Myanmar, while Toyota is planning to open an assembly line in 2021. It is expected that car part supplier companies will follow their customers to Myanmar, and start operations in local SEZs. The foreign interest in Myanmar’s manufacturing sector is apparent from the data on the number of FDI approvals by the Myanmar Investment Commission.