control of Vietnam’s Ministry of National Defense, obtained a 49% equity stake in Mytel, a joint
venture with Myanmar National Telecom Holding Public Limited (MNTH) and Star High Public
Company Limited. The latter is a subsidiary of Myanmar Economic Corporations (MEC), one of
the two most important military conglomerates, now sanctioned by the USA, UK, and EU. MPT
signed a joint operations agreement with Japanese corporations KDDI and Sumitomo.
According to our field research, those combined investments drove the price of SIM cards
down to between 300 MMK and 1,500 MMK by 2013. Chinese-made smartphones entered the
market costing between 80,000 and 1,000,000 MMK. A citizen interviewed in a polling station
during the 2015 general elections explained how he reorganized his whole life thanks to this
digital transformation: "Now I have a smartphone, several Facebook accounts and three SIM
cards: one for my wife and family, one for work and one for my girlfriends..." In the space of a
few years, mobile phone penetration rose to more than 100 per cent as many Myanmar users
bought more than one SIM card, partly because of cautious privacy concerns after decades of
living under brutal and intrusive state surveillance.
The additional introduction of mobile-money services lifted the whole economy by facilitating
inter-state trade for small entrepreneurs, as explained in the report “Myanmar’s Banking Crisis”
which was circulated to media and researchers in August 2021 by the anonymous group
Independent Economists of Myanmar (IEM):
"Those services grew at a phenomenal rate and greatly expanded formal banking
services. Each of those, such as Wave Money, Easy Pay, OK Dollar, M-Pitesan, MytelPay
and MPT Money, is associated with at least one major bank and allows users to transfer
money and, in some cases, top up airtime, pay utility bills and repay loans. Wave Money,
for instance, doubled its business from USD 4.3 billion worth of transactions in 2019 to
USD 8.7 billion in 2020."
But this development remained uneven across the country. In 2019, only 26% of the
population had an account with a financial institution or mobile-money service provider and
less than a third of the population actually enjoyed regular access to the Internet, according to
the IEM report. In rural areas, only a handful of households owned and were able to use a
computer. Access to Internet connectivity was far more restricted than in the main cities.
In early 2018, the National League for Democracy (NLD) government, which had taken power in
April 2016, revealed plans to impose a 2% tax on the income of four mobile operators through
the establishment of a Universal Service Fund (USF). The NLD government expected to use the
funds to provide telecoms services to communities that remained underserved due to
logistical challenges and sporadic conflicts, such as in Shan, Kayin, Kachin and Rakhine States.
"While the USF aimed to reach 99% of the population by 2022, instability in ethnic states
delayed network deployment. As of the fourth quarter of 2018, more than half of the
uncovered population – around 1.8m people – lived in areas challenged by these disputes"
noted the Oxford Business Group. In 2020/21, license fees from telecom operators were
expected to generate USD 420 million, per the report provided by IEM, of mostly foreign
currency.
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