In 2012, Myanmar’s mobile phone penetration rate was less than 10 per cent, on a par with North Korea, but targets have been set for most of the population to have phone and internet access within the next five years.
This is creating opportunities and choices for consumers who are looking to the digital age to support activities previously carried out using traditional methods, if at all.
From Cambodia to Kenya to Haiti, mobile money – a payment method via mobile phones – has had positive effects on economies and the lives of consumers.
In Kenya, mobile money services are used by almost 40 percent of the population; it is estimated that incomes have increased almost 30 percent in some households using the service, mainly because of international remittances.
Myanmar Mobile Money (MMM), part of the state-run Myanmar Economic Corporation, introduced its services this year and hopes to eventually have a similar economic impact.
The platform offers five services: cash in, cash out, person-to-person transfers, salary payments and mobile phone top-ups. MMM says it has 40,000 registered customers and 400 agents nationwide for its service, which is currently only available to those with MPT or MECTel SIM cards.
“It saves people time and money,” said U Aung Aung Cho, general manager of MMM’s planning department. “People do not need physical cash, they just use their mobile phone and they put their loans onto their phones by giving cash to our agents,” he said.
“If they want to buy something, say a pig or a tractor, they will go to the company and pay using their phone. Then the company collects the cash from us, so it is a quicker and more secure process.”
MMM’s model is based on practices in other countries, but U Aung Aung Cho acknowledges there a challenges unique to Myanmar.
“We cannot copy everything from other countries as there are things different for us and we have to customise what we do,” he said.
“Kenya has been successful because of its send-money-home program, but at the moment we cannot do that,” U Aung Aung Cho said, adding that the Central Bank of Myanmar was yet to grant licences for international remittance. MMM is working with other companies to be ready to offer international remittances when they are allowed.
U Aung Aung Cho says MMM’s relationship with the government is to the company’s advantage.
“We are working with two semi-government banks, Rural Development Bank and Myanma Economic Bank. People believe in semi-government banks because they are linked to the government and more resilient. Maybe their services are lousy, but people can have trust in them,” he said.
The company will also rely on word-of-mouth advertising to grow its business.
“People might not trust in Myanmar Mobile Money, but they will trust their friends if they say it is good,” U Aung Aung Cho said. “So it is something that will take time, it is not a boom industry. I think that in two or three years, we will have an important role in helping our country’s development.”
Increased mobile and internet access also has the advantage of providing information that was not freely available previously and one area where this can provide important benefits to consumers is health care.
“We realised that health information was something in serious need,” said Mr Michael Lwin, managing director of Koe Koe Tech (KKT), which is working to improve Myanmar’s health information software. “Everything we looked at, doctors and patients would say that we could really use improved health technology here,” Mr Lwin said.
Among other projects, KKT has worked with Ooredoo and the international non-government organisation, Population Services International, to develop a mobile app and SMS service called maymay, which provides health advice to women during pregnancy and for the first three years of the child’s life. The service has 6,000 subscribers and will soon introduce phayphay, an information service for fathers.
World Bank figures show that Myanmar’s infant mortality rate was the third highest in Southeast Asia in 2013. Mr Lwin said research shows that informational messaging can have a positive impact in alleviating child and maternal health problems.
In common with mobile money, health technology is a field in which Myanmar can learn from the successes and failures of other country’s models. KKT has studied a similar system in Bangladesh called Aponjon, which has upwards of 1 million subscribers.
“In Bangladesh, there has been a significant increase in the percentage of subscribers who went to a health facility to deliver their baby,” Mr Lwin said.
“There has also been a significant increase in exclusive breast feeding for those who used the messages, as well as an increase in antenatal clinic visits. So it shows that information can contribute to people making more informed decisions,” he said.
“The Myanmar context is obviously different because every context is different, but we will draw on existing evidence from other countries and the Bangladesh case is the most salient for us.”
With the telecoms industry still in its infancy, challenges remain to get these services to most of the population.
“We’re aware of the limitations,” said Mr Lwin. “The network right now is in urban areas, so our focus is on waiting for the networks to reach rural areas.”
This is also true for Myanmar Mobile Money, whose customers tend to be in and around cities, where access is less of an issue than in rural areas.
Tech companies also face challenges building sustainable business models in such a youthful market. As MMM is part of the government, U Aung Aung Cho said its main motivation is to provide a service rather than make a profit.
Mr Lwin said achieving a sustainable business model was a challenge that KKT had expected.
“For us, at the moment it’s about figuring out how people can access [the product], so we’re willing to take a backseat and figure out how we can get the information to people,” he said.
“That’s the model for a tech start-up, you build the user base first, then the business aspect comes later.”
This Article first appeared in the November 06, 2014 edition of Mizzima Business Weekly.
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