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Myanmar unlocks one of Asia's last untapped cellular markets

Myanmar awards cell phone contracts to Norwegian Telenor and Qatari Ooredoo.

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Jacquelyn Martin/AP
President Barack Obama listens as Myanmar's President Thein Sein speaks during their meeting in the Oval Office of the White House in May 2013. Thein Sein is the first Myanmar president to be welcomed to the White House in almost 47 years.

Myanmar, also known as Burma, announced the two winners of a bidding contents for its nationwide cellphone contracts. The move will give Norwegian Telenor and Qatari Ooredoo access to one of Asia鈥檚 last untapped cellular markets.

The Myanmar聽government鈥檚 Thursday announcement is part of its effort to raise the country鈥檚 cellphone penetration rate to 50 percent by 2016. Currently, an estimated 9 percent of Myanmar's聽nearly 60 million people have access to mobile devices.

The 15-year wireless license begins in September.

According to a report by consulting firm聽, making technology readily available in Myanmar聽is the first step toward building an environment that can attract strong international investment.聽

The rapid introduction of consumer cellphones that the government has planned will signal a great change for Myanmar. Filmmaker Robert Lieberman remembers the difficulties of getting a cellphone in Burma five years ago, when he began working on his documentary,

鈥淚 would call somebody and hang up, and then they would call me back,鈥 he says. As a foreigner in 2008, Mr. Lieberman could spend $20 to buy a SIM card (the chip that allows most cellphones to connect to a company's cellular network), but then the number stopped working after the $20 ran out. Texting wasn鈥檛 even an option, he says. Back then, it was about $1,500 to get a cellphone if you were Burmese.

By 2012, the price had dropped to $250, and as of April, government issued SIM cards are sold for $1.60. But the cards can only be obtained through a lottery system, and the average daily wage is about $2, he says, meaning that SIM cards are still a rare luxury item.聽

鈥淭he country is so poor, people can barely feed their families,鈥 Lieberman says. The idea that more than 50 percent of the population would have a cellphone by 2016, as the government has promised, strikes Lieberman as 鈥渦nrealistic unless the economy changes.鈥

The introduction of foreign cellphone companies to Myanmar聽鈥渞eflects the commercial opening of Burma to outside investors,鈥 says Bob Dietz, the Asia Coordinator for the .

鈥淢ore technology could mean more openness and freedom in Burma, but it doesn鈥檛 have to,鈥 Mr. Dietz says.

Reforms have been underway in Myanmar聽since November 2010, when a nominally聽civilian government replaced the military junta that had been in power since 1962. The government of聽Thein Sein聽has tried to smooth over relations with the West. He has granted amnesty to over 200 political prisoners, moved away from economic ties with China, and allowed parliamentary elections 鈥撀爓idely perceived as free and fair 鈥撀爐o take place in April 2012.

And thus far, Mr. Thein Sein鈥檚 actions have been well received. The European Union has suspended most of its sanctions against Myanmar.聽For the first time in 30 years, the Asian Development Bank resumed giving loans to Myanmar. And in May, Thein聽Sein became the first Burmese president to visit the White House since 1966.

But the country's government has received criticism from human rights groups for making moves toward democracy that lack the legal clout to make them permanent or even meaningful. Signing cellphone contracts with foreign companies is one such instance.

鈥淏urma lacks an electronic privacy law to prevent arbitrary and over-broad surveillance practices, and the courts have no history of independence from the government,鈥 according to a Human Rights Watch聽 released on Thursday in response to the announcement of the telecom finalists.

The licenses were awarded despite efforts by lawmakers in the lower parliament to delay licensing until the passage of a new telecommunications law goes into effect. But their efforts were blocked, according to a by Radio Free Asia.

鈥淐ellphone penetration and democratization are not necessarily correlated,鈥 says Salil Tripathi, director of policy for the . 鈥淏ut cellphone penetration can help democratization, because it will enable people to realize many rights 鈥撀爊ot only civil and political, but also economic rights."聽

The two telecom companies were chosen from 12 finalists based on their plans for bringing increasing technology into the country, though many analyst commented on the possible significance of choosing Middle Eastern and Norwegian companies. Latent religious tensions between Muslims and Buddhists have聽erupted聽in Myanmar, and "here are complaints from Buddhist leaders that one of the companies awarded a contract was Middle Eastern supplier," says Dietz.聽

And Norwegian? Norway leads the , supporting cease-fires, though Telenor is unaffiliated.聽

[Editor's note: The original headline of this聽article聽mischaracterized聽the current state of Asia's cellular rollout. Myanmar is one of the last聽untapped cellular markets.]

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