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Burma Spotlight FINAL

Burma Spotlight FINAL

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Published by Dan Tree Swinhoe

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Published by: Dan Tree Swinhoe on Sep 02, 2012
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02/20/2014

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 Asia
MYANMAR
[BURMA]
: SPTLIGHT
 The recent political change in Myanmar has seen it turn a corner. The opening of the country and the relaxing of 
international sanctions have resulted in a urry of excitement from potential investors. IDC called it an ‘unpolishedgem’ and promised high levels of growth within the IT industry this year. Several companies have already entered themarket, including Coca-Cola, but many are wary and unsure about entering the market so soon. To test opinion onMyanmar, we interviewed 54 IT and business professionals, asking if they thought the country’s IT market had great
potential.
Findings
 As Myanmar is barely a year into its newfound freedom, creating a wide-ranging sample from the country itself proveddifcult. We did however, get a decent response from professionals further aeld, many of whom have rst-handexperience of the country. This provides valuable insight, and helps illustrate the situation. The general consensus is that Myanmar does indeed hold great potential within its IT sector, with a total of 66.7%agreeing with the statement. People within the country itself are overwhelmingly positive- 90% think their countryholds potential for the future. When looking only at respondents outside of Myanmar, the levels of negativity rise, with38% disagreeing with the statement. But overall the results point to a positive future for the country.
 Inside Myanmar Outside Myanmar 
90%
10%
59.1%
38%
2.3%
 YesNo
Don’t Know
66.7%
31.4%
1.9%
Introduction
“Do you think there is great potential for IT in Myanmar [Burma]?” 
 
[
source: IDG Connect]
“Country Breakdown: Inside/Outside Myanmar [Burma]” 
 
source: IDG Connect
 
 Asia
Reasoning
When asked for their reasons, both sides agreed that the country offers what is essentially a clean slate; thereis a lack of infrastructure, industry and skills. But it seems how this void is viewed affects the answer. Theinterviewees who feel positively about the opening up of the country think a workforce willing to learn, the abilityto enter a competition-free market and growth in other sectors that will inevitably require IT presents a greatopportunity. One interviewee explained, “Burmese companies are just at the nascent stage of their developmentand most of them don’t even have access to the World Wide Web. Think about how much IT it would need to just bring them so that they can compete at the world stage.”One response from within the country said, “IT is very popular within
Myanmar as a commodity. However, there is poor infrastructure and
grounding in the basics to be able to understand and develop thenew and novel applications Myanmar needs to address its problems.
Much is needed in the areas of education, training and development of 
standards.”
On the other hand, the negative responses cite skills shortages, poor infrastructure and a lack of industry as
barriers for investment. Several respondents also commented how they didn’t feel the country was ready yetbecause there was so little on the ground, but possibly would be in the future around 10 years from now. Thegovernment was the most dividing subject among interviewees. Some cited a fresh government and a waveof new legislation as a boon, however it seems some are distrustful of the government and reluctant to believe
things will change. One interviewee explained, “This is one of the most repressive regimes on the planet. Until
democracy comes to Myanmar I plan on boycotting any business involved there.”
Background
Despite Myanmar’s checkered past, in the last 12 months the countryhas turned a corner. The release of the pro-democracy party leader AungSan Suu Kyi after nearly 20 years of house arrest, free elections and the
easing of international sanctions on the country have seen the nation take
a U-turn.
 As well as greater freedom and the hope of improving the lives of thepeople, companies around the world are seeing real potential for the
country to become the next major emerging market. Companies such as Coca-Cola and ad agency WPP are alreadystarting to build a presence, and executives are ying out on a regular basis to scope out the landscape.
“Most Burmese companiesdon’t even have access to theWorld Wide Web. Think abouthow much is needed in IT sothat they can compete at theworld stage.”IDC has called Myanmar an‘unpolished gem; virtuallyone of the last untappedICT markets in the APACregion’
20112013201215%
“15% expected growth in Myanmar’s IT sector in 2012 reaching $268.45 million in 2016”,
[source: IDC]
2016
$268.45m
 
 Asia
 An Unpolished Gem
One of the big areas opening up is IT. IDC recently released a report into the country’s IT sector, calling its greeneldmarket an ‘unpolished gem’. “Myanmar is virtually one of the last untapped ICT markets in the Asia/Pacic regionwith fast rising potential. For IT spend alone, IDC is expecting 15% year-on-year growth in 2012, and the marketis expected to reach US$268.45 million by 2016.” That represents a massive annual growth rate of 14% overve years. IDC predicts Yangon and Mandalay will be the two leading IT hubs for foreign market-entry and IT consumption, with telecoms, government, utility and energy, nancial services, hospitality, and media sectors allmajor areas for growth. The government has taken steps towards the future, with both a long-term plan looking to 2030 set up in 2005 anda more near-term one that addresses the plans for the next few years. These kind of goals help focus initiatives andfunds, and with so much change on the table coming all at once, focus will denitely be needed. The telecoms areamay be the rst to take the leap, with Myanmar’s Post & Telecommunications Department Director General, KhinMaung Thet, saying a new communications law is being studied to create four new telecommunications licenses inthe country that are open to both local and foreign investors. Previously foreign investors were barred from holding a
license.
Blind Spots, Stumbling Points and Dangers
Despite the buzz and talk of potential, Myanmar has been an information black spot for IT, and the information thatis available is usually either outdated or comprised of sketchy estimates. World Bank data shows there were around100,000 internet users as of 2009, a number which had stayed level for the previous few years, while broadband isvirtually non-existent. Mobile subscriptions stand at around 550,000, which equates to a penetration gure of around1%. Socialbaker, a site providing regular Facebook gures, doesn’t haveany Myanmar gures, although as the things open up this is bound tochange. According to StatCounter, mobile access to the internet hasrisen sharply from practically nothing at the start of the year to just under9%, with Android being the most popular user choice. For desktops,Windows is king, and web browser choice is split 50/50 between IE and
Firefox.
Piracy levels in the area remain murky; neighbours such as Vietnam havesoftware piracy levels around 80%, meaning some companies, suchas Microsoft, are nervy about entering the market. Introducing an IP system, trademark registry and correspondingintellectual property law may help to alleviate fears, but that in itself could bring more problems. The governmentwants to triple the size of the economy in the next ve years, and to facilitate that has been passing dozens of newbills. Things are moving so quickly that according to Reuters, the country ‘risks overloading its rickety institutions.’
The government wants to triplethe size of the economy in the
next fve years, but things are
moving so quickly that thecountry risks overloading itsrickety institutions.
550,000
mobile subcriptionsmobile penetration
 
[source: World Bank]
1%

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