Licensing of equipment for use is the responsibility of the MPT with fees quoted in US dollars and Foreign Exchange Certificates (FECs),24 and a licence is also required to obtain a fixed or mobile telephone line, with priority given to regime ‘insiders’.25 So the licensing mechanism has been used not so much to promote market entry, although in 2002 Bagan Cybertech and SkyLink were new entrants, but rather to control telecommunications access and usage. Interconnection The only way in which interconnection arises as an issue in a state-run monopoly is through what impediments exist to Internet access. Connection rather than interconnection is the country’s primary problem. Tariffs The cost of obtaining either a fixed line or a mobile connection is kyat 500,000. At the official exchange rate at the end of 2003 of US$1:K6.42, this is close to US$80,000. At the United Nations 2003 exchange rate of US$1:K830, this is US$600. At the prevailing black market rate in 2003, this is US$450. Only the powerful and the rich have access to US dollars, and the prices in kyat already put telephony way beyond the means of the average Burmese.26 The black market thrives under these circumstances, including smuggled handsets from China and Thailand for the equivalent of US$80. For example, under the CDMA and AMPS systems that were then operating in tandem, only 15,500 handsets were in circulation and they exchanged hands for up to 3 million kyats, or around US$3,500 at the black market rate. In March 2002, with the opening of Myanmar’s first GSM mobile telephone services in Yangon and Mandalay, around 100,000 GSM handsets were available at a cost of more than US$4,000 per handset. At the time mobile tariff rates were 2 kyat per minute for incoming calls and 4 kyat a minute for outgoing calls. With limited access to finance and a wildly over-valued official exchange rate, the MPT has been forced to raise tariffs and charge for IDD calls in US dollars, so in 2003 the MPT raised the fixed phone tariff from 3 to 15 kyats per minute and the mobile phone tariff from 4 to 25 kyats per minute. Calls to other public phones rose by 400 per cent to 20 kyat, while domestic long-distance calls were charged at 25 kyat per minute. In 1999 international calls were permitted from all telephones, but costs were raised sharply and since all calls are operator connected, preference is given to calls paid for in US dollars.27 According to the BBC Monitoring Asia Pacific, 9 24 For details see http://www.mcpt.gov.mm/ptd/index.htm. 1 FEC = 1 US$ and officially 6 kyat, but the black market rate is closer to 1,000 kyat. 25 ‘In January 2001, MPT sold 3,000 CDMA handsets after applications were invited through the state media. MPT was obliged to set up two more stations to receive the flood of thousands of applications. None, however, were sold to the general public as they were sold on a “priority” basis. The going rate then to sign on was 600,000 kyat.’ itmatters.com.ph/news/news_03262002e.html 26 The lowest monthly salary of Myanmar government employees is rated at 3,000 kyats which is the equivalent to 3 US dollars according to market exchange rate, with the average government salary coming out to 12,000 kyat a month or US$15. 27 When the system was first introduced, calls to Bangkok were to be charged at US$1.40 per minute, compared to kyat 17 (five U.S. cents) per minute previously charged by operators. However, subscribers with existing direct dial telephones got a rate cut. They previously had to pay US$2.69 per minute for calls to Bangkok. Reuters, 5 August 1999.