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Myanmar (Burma) is a country of many ironies and contradictions. Some fundamental ones are manifested in the current vibrancy of the telecommunications and information technology (IT) sector, in an otherwise stagnant economy and under a repressive military dictatorship fearful of freedom of information and communication. The telecommunications sector grew by nine per cent in the fiscal year 1996-97. The high rate of growth - never less than five per cent annually since the early 1990s - is partly due to the low base. Much of Myanmar's internal and external telecommunications services remain rudimentary and unreliable. Telecommunications were introduced into Myanmar in 1979, when a satellite communications (SATCOM) ground station was commissioned in Thanlyn, across the Bago River from Yangon (Rangoon), and microwave systems were installed in Yangon and Mandalay. Since 1989, the telecommunications system has been extensively upgraded, with additional SATCOM ground stations, microwave connections, and digital exchanges provided by China, Singapore, Israel, Japan, Germany and Australia. Myanmar has not purchased its own communications satellite, but leases transponders aboard several regional satellites, such as AsiaSats and the Indonesian Palapa-C satellite. In March, Myanmar Posts and Telecommunications reached agreement to use ThaiCom-3 satellite transponders in its internal SATCOM services. More than a dozen SATCOM ground stations have been constructed throughout the country. The number of towns connected by digital automatic exchanges has more than doubled since 1989. The number of telephones in Myanmar had reached 168,399 at the end of 1996, as compared with 73,545 in the early 1990s. More than 2,000 cellular phones have been issued in Yangon within the past four years, and another 1000 have been contracted for Mandalay. A new digital cordless telecommunications system is being installed in five cities (Yangon, Mandalay, Pakokku, Monywa and Twanlay). Myanmar set up its first international data communications link in 1997, allowing companies to transfer data and email to some 110 destinations in more than 90 countries and 200 data networks worldwide. A fibre optic manufacturing plant has been established, to provide fibre for cable television, cellular networks and fixed line telecommunications projects. The telecommunications and IT sector promises good business opportunities for foreign companies, especially those which can provide some sort of financial package. The Myanmar Government has given high priority to the development of this sector. It recognises that a modern telecommunications and IT capability is essential for economic and technological modernisation. On the other hand, foreign companies have experienced problems in dealing with the unwieldy and corrupt bureaucracy in Yangon. The telecommunications and IT sector is subject to numerous legal constraints. For example, the Computer Science Development Law of 27 September 1996 makes the unauthorised import, possession and use of certain types of computer equipment (e.g., computers with networking capability) punishable with sentences of 7 to 15 years in prison. This punishment is also prescribed for anyone setting up links with a computer network without prior permission or who uses computer networks or information technology for "undermining State security, law and order, national unity, the national economy or national culture". Companies interested in tapping the commercial opportunities offered by the bullish market for telecommunications and IT services in Myanmar should also be aware that these systems are also used by the military regime to maintain surveillance over the Burmese populace.
WATCHPOINT: Will foreign companies take on the risk of investing in the telecommunications and IT sector in Myanmar?
About our company:
AFG Venture Group is an Asia and Australia based corporate advisory and consulting firm with over 20 years experience in creating alliances, relationships and transactions in Australia, South East Asia and India; including a 15 year history of corporate and equities advisory in Australia, undertaking merger, acquisition, divestment, fund raising and consulting for private and public companies.
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