SIM cards will be sold at a dramatically reduced price of 1,500 kyats (US$2) in Burma, making mobile phones affordable for the general population for the very first time

After much anticipation, state-owned television announced on April 3 that new SIM cards for CDMA and WCDMA networks will be sold for 1,500 kyats (US$2) starting from April 24, 2013. Details on SIM cards for GSM networks will be announced next month, Myanma Post and Telecommunications (MPT) said.

This represents a dramatic change for Burma (which is officially known as Myanmar). Five years ago it cost US$2,000 to buy a postpaid SIM card. Since the early days of country’s transition towards democracy, the cost of using mobile phones has been a controversial topic. Earlier this year in January, the minister of MPT was forced to resign following an alleged disagreement on whether to reduce the existing SIM card price of 100,000 kyats (US$125). Several staff from MPT and private companies involved were investigated for corruption.

A temple-goer catches the Chinese New Year festivities in Yangon earlier this year. Pic: Shutterstock.com.

350,000 SIM cards will be divided among states and divisions on a monthly basis. In order to prevent the common practice of transferring SIM card ownership, the cards will be disabled if they are not used in the first 15 days after purchase.

Certain rules apply to the new SIM cards, which come with 300 kyats (about US$0.40) talk time value. A 5,000 kyats (about US$6) top-up card must be bought within the first 15 days and at least 2,500 kyats (about US$3) must be spent on outgoing calls every month after that. Incoming calls will be free of charge.

There are additional problems for public since many smartphones do not provide facilities for CDMA networks. Despite fulfilling their demands for low-cost SIM cards, cheaper and substandard China-made handsets ready for CDMA networks will apparently be the only choice for new SIM card users.

As China, infamous for its web and mobile censorship, remains the largest investor in the country, Chinese mobile operators have great potential to step into Burma’s telecommunication market. Government has not confirmed any foreign private company for the country’s mobile operation yet.

Internet and mobile penetration rate has always been weak in Burma, so much so that it has hampered the country’s development. The government is aiming for a 50% penetration rate by 2015.

Online, mobile or cashless payment and purchases is also rare in Burma, with an extremely low penetration rate. The situation started to change in late 2012, when MasterCard and Visa became more active in the country. ATMs were launched and Visa unveiled its interest in bringing in a mobile payment system which they believe could bring the rural population into 21st century. Local start-ups and entrepreneurs have already been calling for an online payment infrastructure, including e-commerce and m-commerce.

Individual web and mobile developers are calling for a virtual payment system for their applications. Google Play was unblocked last month after Google Chairman Eric Schmidt’s visit to Burma but no one in country can buy apps directly. PayPal still blocks Burma from registering.

However, this weeks announcement can probably pave the way for a much sought-after mobile payment system – either for urban population hungry for fully operated virtual payment or for underprivileged people in rural areas who are in need of better infrastructure.

Image: 1000 Words / Shutterstock.com