Myanmar's Digital Revolution Brightens Future of Internet Startups

By AsiaToday reporter Kim Eun-young - Powered by the digital revolution, internet startups are emerging in Myanmar.

CNBC reported on March 16 that technology has developed rapidly in Myanmar over the past several years and more than 80% of the population Is digitally connected through smartphones, citing data by social media management platform Hootsuite.

Honey Mya Win, a 26-year-old former telecom engineer at Huawei, jumped into the internet business after discovering the tech potential in Myanmar a few years ago when mobile penetration was less than 10%.

"In two or three years, I've seen a huge improvement," Win told CNBC. "Before, it was one mobile operator. Now, we have like three or four. That's led to a huge boom in tech-related opportunities for us."

Myanmar's digital transformation began in 2011 when the military regime gave power to a civilian government. Internet penetration in Myanmar was less than 1 percent during the military dictatorship, but things changed when the government granted telecom licenses to Qatar's Ooreedo and Norwey's Telenor. The price of data usage have been cut dramatically, and the cost of SIM cards dropped from $200 to $1.50.

"When they launched, everybody went straight to 3G," said Genevieve Heng, Director at Anthem Asia, a Myanmar-based investment group. "Suddenly everybody was on Facebook. Everybody was connected to the rest of the world."

The percentage of mobile phone users in Myanmar skyrocketed from around 10% to almost 100% in three years. Approxinately 70% of mobile users are using smartphoness. Myanmar now has 14 million social media users, a quarter of the population. It is a remarkable growth considering the fact that by 2012, there were few people in the country who knew about Facebook.

In addition, internet startups are expected to have a bright future. Japan's Nikkei Asian Review reported on March 13 that internet startups are attracting many consumers in Myanmar, and that the sector is expected to develop further with a smartphone boom and improving infrastructure.

The media reported that taxis with "Oway Ride" logo are becoming more and more visible in Myanmar's largest city of Yangon, where traffic is increasing rapidly. Oway, a Myanmar version of Uber, is a service that allows users to call the closest vehicle among 4,000 taxis in the city via a smartphone app.

Originally started as a travel reservation service mainly targeting foreigners, Oway has grown as a major industry player dealing with nearly 700 hotels and 50 airlines. It is now focusing on the domestic market through the car-hailing service. With the lack of parking spaces and taxis becoming an essential means of transportation, cumulative downloads of Oway app have exceeded 150,000, according to the media.

As Oway received international attention, it was offered last year $3 million loan from the World Bank group. "We plan to have more than 25,000 drivers within two years and create synergies with travel services," said Oway CEO Nay Aung.

Investors are growing more and more interested. Over 200 people including foreign venture capitalists showed up at the country's first Demo Day, hosted by startup accelerator Phandeeyar, to listen to the presentations of startups.

The presentations came at the end of a six-month training program to help young entrepreneurs materialize their ideas. Phandeeyar is setting up the next step in the Myanmar digital revolution by fostering domestic startups.

"80 startups applied for the program last fall," said Phandeeyar Director Jes Kaliebe Petersen. "There is definitely a sense of hunger to get access to data and technology, and data and information - maybe precisely because the country was so closed off before."

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